Not only has failed solar panel manufacturer Solyndra benefited from a $535 million government loan guarantee, it’s now seeking a huge tax break as part of its bankruptcy reorganization.
“Perhaps you thought the Solyndra scandal amounted to a $535 million government loan that will never be repaid,” a
Wall Street Journal editorial states. “No such luck. In the latest twist, Solyndra's investors could be rewarded for their failure, thanks to a tax benefit the Administration handed out in a bid to evade political accountability.”
The Internal Revenue Service objected to Solyndra's Chapter 11 reorganization plan last week, saying its "principal purpose is tax avoidance."
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The only real assets Solyndra has left are what the IRS calls "tax attributes." That’s $875 million to $975 million in net operating losses that can reduce future taxable income by as much as $350 million.
Of course tax-loss carry-forwards are worthless if a company doesn’t have profits. “So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar,” Journal editors write.
A holding company would then come out of the bankruptcy. It wouldn’t make any products, but would receive the tax benefit. And who would own that shell corporation?
One owner would be Argonaut Ventures I, Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. “Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008,” the editorial states.
Energy policy has turned into a major point of conflict between President Barack Obama and Republican challenger Mitt Romney. “Energy has not been this big an issue in a presidential campaign since the tumultuous years of the 1970s,” energy historian Daniel Yergin tells National Journal.
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