Obama’s 'Crony-Gate' Scandal Widens — Billions Now Under Scrutiny

Friday, 16 Sep 2011 01:28 PM

By David A. Patten

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Allegations that White House aides attempted to pressure an Air Force general to alter his congressional testimony in order to aid a firm controlled by a prominent Democratic donor lent new momentum Friday to GOP complaints that “crony capitalism” contributed to the Obama stimulus programs’ failure to revive the economy.

Instead of the money being spent wisely, they suggest, billions were squandered by an administration that believed it could reward its political backers without impeding the economic recovery.

They point to the loss of over 1,100 jobs when the now-defunct solar-panel firm Solyndra, which received over half a billion dollars in federal stimulus dollars, closed its doors.

“Crony capitalism was responsible for the failure of the stimulus — about $90 billion went to clean energy,” Tom Borelli, a PhD and director of the National Center for Public Policy Research’s Free Enterprise Project, told Newsmax on Friday.

News that four-star Gen. William Shelton was urged to change his testimony to make it more favorable to a firm with close ties to the White House adds to the narrative of an administration singularly focused on helping its political friends.

Those allegations come in the same week as a congressional probe continued into loan guarantees given to Solyndra over the objections of Office and Management and Budget staff who warned the company had yet to demonstrate a viable business model.

President Barack Obama later hailed the Solyndra initiative as a model example of how green-energy jobs could help bail out the U.S. economy.

The Republican in charge of the Solyndra probe, Oversight and Investigations subcommittee chairman Rep. Cliff Stearns, told Newsmax Thursday that Solyndra’s “enormous amount of expenditures would mean there’s apt to be fraud, there’s apt to be shall we say, crony capitalism because a lot of people were moving too quickly and spending too much money and not carefully assessing its value and its importance to the development of the solar panel.”

Conservative think tanks and pundits are positioning Solyndra and the Shelton testimony as just the tip of a much larger problem: An administration all too eager to manipulate the levers of federal power and largess in order to reward its political supporters. Among the examples being cited:

• The dual role of GE CEO Jeffrey R. Immelt, whose corporation stood to benefit from the administration’s aggressive development of green energy at the same time he advised the administration on job growth and global competitiveness. Immelt, who has described GE’s energy-efficiency products as an $18 billion-a-year business, has been a heavy donor to both Republicans and Democrats. But Borelli says the green-energy endeavors, including GE’s, are “totally dependent” on federal support and subsidies. According to Recovery.gov, GE has received over $126 million in grants and contracts from various government departments, including $31 million from the Department of Energy.

• The Daily Caller has reported that firms associated with venture capitalist John Doerr have received over half a billion in grants and loans related to green technologies. It adds that Doerr and his wife have donated about $800,000 to Democrats since 2000, and his firm has donated a substantial amount as well. Democrats called on Doerr repeatedly to testify at congressional hearings about the economic benefits of green initiatives. In 2009, he went before Congress to call for “a bold, coordinated campaign of investment and incentives to accelerate green innovation” that he suggested would result in thousands of new jobs.

• Forbes.com columnist Larry Bell says ABC News and the nonprofit Center for Public Integrity has linked $510 million in stimulus loans and grants to green-tech companies in a portfolio owned by Steve Westly. Westly is a campaign money-bundler who reportedly raised over $500,000 for the president’s campaign. According to Bell, Westly was appointed to serve on a 12-member advisory board that would help set priorities that could impact his business interests. One firm Bell says Westly has an interested in, Tesla Motors, saw its stock jump 6% after the administration announced it would offer $7,500 federal buyer-rebates for electric-car purchases.

• Bell also cites “enigmatic circumstances” involving a $584,000 stimulus tax credit granted to Serious Materials, a small window manufacturing company. In his column Bell writes: “Robin Roy, a Serious executive, is married to Cathy Zoi, a former assistant secretary for the Energy Department’s office of Energy Efficiency and Renewable Energy (EERE) which was responsible for $16 billion in stimulus money. She was nominated for the position by the Obama administration, and Vice President Biden visited the Serious plant to praise its work.

• Bell also tells Newsmax that untold billions of stimulus funds actually went to benefit foreign companies. A new solar plant in Blythe, Calif., received a $2.1 billion stimulus grant, despite the fact that the project was awarded to a German firm, Solar Millennium and its U.S. subsidiary, Solar rust of America. Similarly, he reports the Energy Department gave out $1.45 billion in loan guarantees to Abendgoa Solar, a Spanish company building plants in California and Arizona.

On Friday, the National Center for Public Policy Research distributed an e-mail headlined: “Solyndra is only the tip of the crony capitalism iceberg.”
“Congress needs to determine if key advisors of President Obama were rewarded with stimulus money in return for political donations and support of the president’s energy policy,” says Borelli. “There is a clear relationship between recipients of economic stimulus funds and support for Obama’s clean energy agenda.”

The White House and the Energy Department have steadfastly denied any favoritism was involved in its grants and loan guarantees.

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