Solyndra 2.0: Abound Solar Bankruptcy Should Not Be Seen As a GOP Victory
Solyndra received some company late last week when Abound Solar filed for bankruptcy and announced that it was shutting down operations. Abound, which received $70 million from taxpayers, is the third company backed by a Department of Energy loan program to go belly up.
According to Politico, Abound’s failure is an opportunity for Republicans to score some political points:
Thursday’s news is likely to rally Republican critics of the DOE loan program, who, citing the collapse of Solyndra, have argued that the administration is putting billions of taxpayer dollars on the line by investing in risky renewable-energy companies.
There are three reasons why Republicans would be hypocrites if they try to:
1) In 2010, Indiana Republican Gov. Mitch Daniels pledged $12 million in tax incentives for a new Abound facility in Tipton, IN. From the Indy Star:
“Abound Solar showed a lot of promise,” said Indiana Economic Development Corp. spokeswoman Katelyn Hancock, “and it is unfortunate for Hoosiers that the company’s plans in Tipton have not come to fruition.”
In Tipton, the news was disappointing, although, at this point, not so unexpected — and, unfortunately, not the first time this town about 35 miles north of Indianapolis has been dealt such a blow. The German auto parts maker Getrag also rolled into town with promises of plans to employ 1,400 people in the same $530 million manufacturing plant, about four miles west of downtown Tipton.
But after a financial dispute with Chrysler, Getrag backed out. So in the summer of 2010, state officials announced Abound’s impending arrival as a way to make good use of what had been a bad situation.
“While the loss of Getrag was disappointing after so much work, the region will now add 850 new jobs,” Gov. Mitch Daniels said in a statement on July 3, 2010. “What a great way to celebrate Independence Day.” (Daniels’ office on Thursday deferred comment to the IEDC, where he is chairman of the board.)
2) Four Republican members of Congress from Indiana pestered the Department of Energy to give Abound a federal handout. From the New York Times:
The Energy Department released letters it received in 2009 from members of Congress from Colorado and Indiana urging it to grant the loan guarantee. Four Indiana Republicans — Senator Richard G. Lugar and Representatives Dan Burton, Mike Pence and Mark Souder — were among the signers, as were Indiana’s Democratic senator, Evan Bayh, and several Colorado Democrats.
3) The Republican-controlled House of Representatives recently had a chance to shut down the Department of Energy loan program that subsidized Solyndra and Abound. The majority of House Republicans voted to keep it alive.
This article originally appeared on the Cato Institute's Cato@Liberty blog.