Wednesday, January 23, 2013

"It's A Business We Can Live On" - Fraud, Cronyism & The Green Energy Scam

From WaPo:

Inside a midnight-blue BMW, a Sicilian entrepreneur delivered his pitch to the accused mafia boss. A new business was blowing into Italy that could spin wind and sunlight into gold, ensuring the future of the Earth as well as the Cosa Nostra: renewable energy.

“Uncle Vincenzo,” implored the businessman, Angelo Salvatore, using a term of affection for the alleged head of Sicily’s Gimbellina crime family, 79-year-old Vincenzo Funari. According to a transcript of their wiretapped conversation, Salvatore continued, “for the love of our sons, renewable energy is important. . . . it’s a business we can live on.”

And for quite awhile, Italian prosecutors say, they did. In an unfolding plot that is part “The Sopranos,” part “An Inconvenient Truth,” authorities swept across Sicily last month in the latest wave of sting operations revealing years of deep infiltration into the renewable energy sector by Italy’s rapidly modernizing crime families.

The still-emerging links of the mafia to the once-booming wind and solar sector here are raising fresh questions about the use of government subsidies to fuel a shift toward cleaner energies, with critics claiming huge state incentives created excessive profits for companies and a market bubble ripe for fraud. China-based Suntech, the world’s largest solar panel maker, last month said it would need to restate more than two years of financial results because of allegedly fake capital put up to finance new plants in Italy. The discoveries here also follow so-called “eco-corruption” cases in Spain, where a number of companies stand accused of illegally tapping state aid.

This story is not unique to Europe of today. It is merely an example of a universal, historical truth - combine government mandates with government subsidies and what you get is a prescription for the worst of fraud, crony capitalism and abuse, all at taxpayer expense.

Solyndra, now almost forgotten by the public, was a poster child for such abuses under Obama. It combined an untenable decision to fund an investment a business that could not survive in the free market, at least some of the private owners had ties to the Obama administration, and the administration violated the law when they renegotiated the contract to provide that any private investors would stand ahead of the government in the event of a bankruptcy. Solyndra was the very small tip of the iceberg.

Earlier in the month, Powerline posted a complaint, filed in Federal Court, that gives a birds eye view of cronyism, corruption and fraud in a government program to provide subsidized loans to corporations involved in green energy:

The lawsuit was filed on behalf of XP Vehicles, Inc. and Limnia, Inc., companies that competed for Department of Energy loans under a Congressionally-authorized program. The owners of XP eventually realized that there was no real competition, and that the whole Department of Energy program was a scam intended to funnel money to Obama and Democratic Party campaign contributors and political allies. They allege in addition that DOE misappropriated proprietary technology that they submitted in connection with their loan applications, and gave that technology to Obama administration cronies.

Go to Powerline and read the highlighted portions of the Complaint. It makes for a fascinating read.

No comments: