Oklahoman Linked to Solar Company Scandal
Kaiser, chairman of Tulsa-based BOK Financial Corp. and owner of Kaiser-Francis Oil Co., is Oklahoma's richest citizen and a major supporter for the state and national Democrat Party. With an estimated net worth of $10 billion, Kaiser was ranked as the 32nd richest person in th United States.
The Energy Department had previously rejected loans to the company during the Bush administration, but Solyndra became the first beneficiary of the renewable energy loan guarantee program, part of the "Green Jobs" initiative of the Obama stimulus bill. Vice President Joe Biden participated in the announcement of the federal loan and Solyndra's factory provided a media op for Obama who made an appearance at the company last year.
When Solyndra's financial troubles prompted auditors in March of 2010 to question the company's ability to continue, Energy Department officials refused further disbursement of federal funds unless the company obtained additional private capital. By December 2010, Solyndra had only about a month of cash on hand and faced bankruptcy without continued funding from the department.
The company and two investors, Argonaut Venture Capital and Madrone Capital Partners, negotiated a new agreement with the Energy Department. Under the agreement announced in January, the investors provided the company with $75 million that became senior debt ahead of all but $150 million of the federal government's stake. In the event that the company failed and was liquidated, $385 million owed to the federal government would be subordinate to the $75 million invested this year. At the time of the January refinancing, the government had already advanced $460 million in loan guarantees and decided to continue investing in the effort after the injection of the new private capital. Just before the bankruptcy petition, the administration was considering providing an additional $469 million in funds in an effort to keep the company afloat. That would have brought the total federal investment to over $1 billion.
Argonaut Venture Capital is part of the George Kaiser Family Foundation. The foundation holds a 36.7 percent interest in Solyndra, according to a Securities and Exchange Commission filing. Republicans on a congressional committee investigating the federal loan deal have pointed to connections between Solyndra and Kaiser, who was an Obama campaign fundraiser. George Kaiser hosted a fundraiser at his Tulsa home in March 2007. Kaiser raised, or bundled between $50,000 to $100,000 for Obama's 2008 campaign, according to a list that had been posted on Obama's 2008 campaign website.
After Obama became President, George Kaiser made 16 visits to the president's aides, according to White House visitor logs. But Kaiser has denied direct involvement in the Solyndra deal."George Kaiser is not an investor in Solyndra and did not participate in any discussions with the U.S. government regarding the loan," the foundation said in an email statement sent on September 1. But, it has been reported that Kaiser's White House visits coincided with 16 of the 20 times Solyndra officials and investors also visited.
Even as Congress investigates the Solyndra deal, state Rep. Mike Reynolds (R-Oklahoma City) is concerned that Oklahoma tax credits may have also benefitted the failed solar company, based on state records. Reynolds notes that Kaiser received nearly $30 million in state tax credits in 2007 and 2008 for venture capital investment. Unfortunately, lawmakers cannot learn what specific ventures benefitted from the state tax credits.
However, an examination of reports about venture capital tax credit usage from the Oklahoma Tax Commission reveals a business entity with a name similar to Argonaut Ventures. Reynolds said it is reasonable to question whether tax credits available to that entity were involved in the transactions with Solyndra.
"There is very little transparency in the oversight of state tax credit programs and, as a result, we cannot learn all specific investments supported by those tax credits; we can only learn who received the tax credit," said Reynolds. "However, since Argonaut Ventures has been identified as a major investor in Solyndra, it is fair to ask if any Oklahoma tax credits were used to support Solyndra either directly or indirectly. Oklahoma taxpayers have the right to know if their money was used to support an out-of-state business that is now the center of legal and ethical concerns."
Members of the state legislative Task Force on State Tax Credits and Economic Incentives have been reviewing Oklahoma's tax credit programs this summer to determine if they need to be revised or even abolished. The group recently learned that millions of dollars in investments supported by Oklahoma tax credits have benefitted out-of-state companies in spite of the fact that the programs were meant to fund job creation in Oklahoma. It has been reported that Kaiser was pushing for Solyndra to open a factory in Tulsa as sales of solar panels expanded.
Task force members have been troubled by the lack of transparency in many programs, noting companies receiving millions in tax credits do not have to provide significant information on those transactions to the taxpayers who fund them.
The congressional investigation continues and there are reports that other federal "green jobs" stimulus investments are also being scrutinized. One such company is SunPower Corp. which received $1.2 billion in loans and is rumored to be headed to bankruptcy.
Latest Commentary
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024
Tuesday 30th of July 2024