Washington, D.C. - Responding to public outrage following an ABC News report that a $529 million loan from the Energy Department was used to back an electric car company Fisker Automotive -- which is creating jobs in Finland -- policy experts at the National Center for Public Policy Research are calling attention to the crony capitalism surrounding clean loans and grants.
"The Energy Department's loan to Fisker Automotive underscores the problem of the government acting as a venture capital company. In reality, the real green is not in the manufacturing of an electric car but in the green dollars that the politically- connected are seeking by leveraging taxpayer money. It's a financial lose-lose for taxpayers; if the project fails taxpayers take a hit, if new autos are a success billionaires such as Doerr cash in and taxpayers don't financially benefit," said Tom Borelli, Ph.D., director of the National Center for Public Policy Research's Free Enterprise Project.
The Fisker Automotive loan provides a perfect example of the cronyism surrounding President Obama's clean energy push. The Department of Energy loan to Fisker announced in 2009 financially benefits Al Gore and his venture capital business partner John Doerr, who are partners in the venture capital company Kleiner Perkins Caufield & Byers. Kleiner Perkins Caufield & Byers has invested in at least two companies that have benefited from taxpayer support and the firm and Doerr are also big donors to Democrats.
In addition to the $529 million loan to Fisker Automotive, Silver Spring Networks, a company developing a smart electricity grid, will also benefit from the clean energy stimulus grants. According to the New York Times, about $560 million of smart grid grants awarded by the Energy Department "went to utilities with which Silver Spring has contracts." Gore and Doerr, the latter of whom is a member of President Obama's jobs panel, have close political connections with the Administration.
"Obama's clean energy push is resulting in a significant amount of tax dollars backing risky investments that are normally reserved for the very wealthy and the revelation that some of key investors in these startup companies are politically-connected raises serious questions. The fact that taxpayer funds are stimulating jobs in other countries only exacerbates the frustration by many Americans, especially those who are unemployed," said Tom Borelli.
"Given the failure of Solyndra we simply can't afford to gamble with taxpayer money to enrich the business elite. Congress needs to stop authorizing clean energy stimulus funds and the Department of Energy Advanced Technology Vehicle Manufacturing loan program - the source of the Fisker Automotive loan. The use of government funds to support private entities whose investors have political connection is crony capitalism, which distorts the free-market system," said said Deneen Borelli, who serves as a full-time fellow of the National Center-sponsored African-American leadership group Project 21.
"Obama's economic stimulus plan invested billions in clean energy and this strategy failed to generate meaningful job growth. Immelt's recommendations are really a bailout for the jobs panel members who made bad bets on clean energy. Now is the time to stop the crony capitalism madness. Our country can't afford to waste any more money on the next Solyndra's," added Deneen Borelli.
"The Occupy Wall Street protesters need to recognize that crony capitalism and not capitalism is the problem," said Deneen Borelli.
The National Center For Public Policy Research is a conservative, free-market non-profit think-tank established in 1982. It is supported by the voluntary gifts of over 100,000 individual recent supporters. Its 2010 revenue was over $12 million. It receives about one percent of its revenue from corporate sources. Contributions are welcome and appreciated.