Federal Funds Flow to Clean Energy Firms with Obama Administration Ties
February 20, 2012
When the Obama administration helped get a $787-billion stimulus package through Congress, it set aside $80 billion for investment in "clean technology." Left to the Department of Energy (DoE) to distribute, much of this funding went to companies whose fortunes directly benefitted Obama fundraisers and advisers, says the Washington Post.
- A Washington Post analysis found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.
- Sanjay Wagle, a venture capitalist and Barack Obama fundraiser in 2008, went to work at the DoE in 2009, and guided some $2.4 billion to companies in which Wagle's former firm, Vantage Point Venture, had invested.
- David Danielson, formerly of General Catalyst, joined a DoE mission to fund breakthrough technologies -- he managed to direct $105 million to three General Catalyst portfolio firms.
Administration officials have been keen to point out that in any case where a conflict of interest existed, the staffer in question was not allowed to have an influence on the proceedings that led to the funding decision. However, several insiders familiar with the process are quick to respond that unofficial pressure is present everywhere.
The case of Solyndra serves as an excellent example. Recent federal investigations into the reasons for funding the risky company have turned up several possibilities of insider influence from industry actors.
- Steven J. Spinner, a former department loan adviser, disclosed that his wife worked for Wilson Sonsini, a Silicon Valley law firm that handled funding applications for several clean-tech companies including Solyndra.
- Wilson Sonsini's clean-tech clients reaped $2.75 billion in DoE grants and financing, according to analysis by the Washington Post.
- Once hired, Spinner agreed not to discuss loan matters involving Wilson Sonsini clients, yet e-mails show he urged officials to resolve delays in the Solyndra loan, and also defended the financial prospects of Solyndra to a White House deputy before its federal loan was approved.
The case of Solyndra and numerous other companies demonstrates the opportunities for insiders to funnel money to corporate interests.
Source: Carol D. Leonnig and Joe Stephens, "Federal Funds Flow to Clean-Energy Firms with Obama Administration Ties," Washington Post, February 14, 2012.
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