Bloomberg News

Romney-Backed Solar Company Fails Days After He Faulted Solyndra

June 05, 2012

Romney Bashes Solyndra’s Loan as Solar Company He Backed Fails

Repubican presidential candidate Mitt Romney speaks in front of the shuttered Solyndra solar power company's manufacturing facility in Fremont, California. Photo: Justin Sullivan/Getty Images

Republican Mitt Romney, who criticized President Barack Obama last week for backing failed Solyndra LLC, supported as governor of Massachusetts a different solar-power company that has gone out of business.

Konarka Technologies Inc. filed to liquidate on June 1 after getting state and U.S. aid, a development that may muddy his attempts to use Solyndra to try to show Obama’s broader economic failures, a professor said.

“It demonstrates the ‘problem’ of having a record, in that obscure decisions and circumstances come to light, often far removed from their original frameworks,” Burdett Loomis, a University of Kansas political science professor, said in an e- mail yesterday.

Romney, who on May 29 claimed enough delegates to win the Republican presidential nomination, has sought to use Solyndra to underscore his argument that he understands how business works and Obama doesn’t. Romney cites Solyndra’s collapse two years after winning a $535 million loan guarantee as a symbol of Obama’s failure to create jobs with government spending, and the risks of using taxpayer money to fund private companies.

Thomas Pyle, president of the Washington-based Institute for Energy Research, said in an interview that both examples appeared to be an effort to pick “winners and losers.”

“This is clearly not the way we should be doing business,” he said yesterday.

State Financing

Romney, a co-founder of Boston-based private-equity firm Bain Capital LLC, promoted state aid during a January 2003 press conference in Lowell, according to a statement from Ameresco Inc. (AMRC:US), a Framingham, Massachusetts-based company that also won state help. Romney took over as governor that month.

Romney gave Konarka of Lowell, Massachusetts, a $1.5 million loan, part of $9 million in state financing to clean- energy companies. Romney also announced that a restructured green fund would provide $15 million in support for renewable energy in the state.

Andrea Saul, a spokeswoman for the Romney’s campaign, said on in an e-mail yesterday that the subsidies were approved by a Massachusetts board before Romney became governor.

Asked to respond to the candidate’s backing for Konarka, Saul said Obama has “a lot of questions to answer about why he used taxpayer dollars to reward wealthy campaign donors for bad ideas like Solyndra.”

Kaiser’s Foundation

A foundation run by George Kaiser, an Oklahoma billionaire and Obama fundraiser, was a leading investor in Solyndra. An investigation by Republicans in Congress hasn’t found evidence the administration gave Solyndra the loan to reward a political donor.

The administration has said the award was based on its merits and had been advanced during the Bush administration.

“Every day we see a new example of Mitt Romney’s hypocrisy,” said Lis Smith, a campaign spokeswoman. “Just one day after he pulled a political stunt outside Solyndra, we learned even more about his record of picking winners and losers in Massachusetts when one of the companies he gave a loan to went bankrupt.”

Supporters of clean-energy programs said Konarka’s collapse shows Romney is being hypocritical for criticizing Obama’s support for renewable-energy subsidies because some projects fail.

Similar Efforts

“Romney and allies are attacking the president for efforts similar to his when he was governor,” Dan Weiss, senior fellow and director of climate strategy at the Center for American Progress Action Fund, which says it promotes progressive policies, said in an e-mail.

As president, Obama sought to make clean-energy support a central feature of the 2009 economic stimulus. The loan program through which Solyndra received its award provided about $16 billion in guarantees before ending last year.

In a May 2010 visit to Solyndra, Obama said the factory being built with taxpayer help was proof that “the promise of clean energy isn’t just an article of faith.”

Last week, Romney stood outside Solyndra’s shuttered facilities in Fremont, California, saying the company was a symbol of Obama’s failure to create jobs.

In 2003, then-governor Romney said the Massachusetts fund could become a “major economic springboard” by focusing on job growth in the renewable-energy industry.

One major difference between Solyndra and Konarka is the size of support. Solyndra filed for bankruptcy in September, about two years after it won its $535 million U.S. loan guarantee. The company also collected about $1 billion in private investment.

Private Capital

Konarka attracted $170 million in private capital and $20 million in government research grants, according to its website.

Howard Berke, chief executive officer of the company, said June 1 Konarka had been unable to obtain financing and was unable to continue operations.

The company, which said it would lay off its 85 workers, listed $100,000 to $500,000 in assets and $10 million to $50 million in debt in its Chapter 7 filing in U.S. Bankruptcy Court in Worcester, Massachusetts.

At least four other U.S. solar-panel manufacturers filed for bankruptcy in the past year as the price of the products fell 50 percent on an oversupply and expanded production in China.

Pyle said Romney’s past support for state subsidies to clean-energy companies shouldn’t deter him from criticizing Obama’s more generous aid.

“It’s a little bit of a stretch to say, ‘He did it too, so let’s call it a draw,’” Pyle said.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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