US Green Stimulus Waste
The US Department of Energy handed out USD 90 billion worth of loans for ”shovel-ready” projects in 2009 and 2010, designed to restart the stuttering economy. Now, a new report by Gregory H. Friedman, the Energy Department’s inspector general, says out of 519 contracts awarded, in more than a hundred it did not check out if the contractors had a successful track record in the industry.
The report says the department was simply overwhelmed by administering a stimulus package that was bigger than its own budget, leading to hasty and ill-considered decisions. In some cases even the basic paperwork evaluating risks was never completed. Friedman claims the political pressure to dole out the money as fast as possible overshadowed the economic reality.
As for the widely-trumpeted “shovel-ready” projects – expected to bring immediate employment and profitability –for the most part, those simply didn’t exist. Instead, Friedman says the majority of projects required “extensive advance planning, organisational enhancements, and additional staffing and training” before they could start.
The most conspicuous failure of the energy stimulus has been the bankruptcy of the solar-panel producer Solyndra. Once touted by President Barack Obama as the future leader in a new economy powered by green energy, the company was given a loan of USD 535 million. Up went a gleaming headquarters and a brand-new factory, but the demand for Solyndra’s products never materialised, and the company went bankrupt before some of the new hi-tech manufacturing equipment was even unwrapped. Former company engineer Lindsey Eastburn, said at the time of the bankruptcy in September that the government-backed infusion of money“made people sloppy.”
Another fiasco is the USD 490 million dollar programme to retrain unemployed staff for green energy jobs. Although tens of thousands have undergone the training, only 8000 have been able to actually find green jobs.
In total, more than a hundred separate investigations have been launched into how the stimulus money was distributed by the Department of Energy.
And with many of the indebted contractors still struggling to make their business profitable, this may be just the tip of the iceberg, and in the end, it will be the US taxpayer who will foot the bill.