No Solyndra ‘Smoking Gun’ But Loan Program Still Mired in Scandal

National Journal: “Most people have heard about the Solyndra program only in the context of scandal.”

“And yet no smoking gun or any real evidence of ‘crony capitalism’ ever emerged. Even the claim that the government was picking political losers was wrong in context. Solyndra represented just 1.3 percent of an otherwise strong portfolio, and now that message is coming home to roost. Last week, the department revealed its much-maligned loan program has started turning a profit and is on track to make taxpayers $5 billion or more, according a first-ever estimate of gains.”

In fact, the agency has a loss rate of roughly 2 percent and “collected $810 million in interest, putting the program $30 million in the black.”

“It also isn’t particularly surprising that the department didn’t have favorable numbers to tout early on. That the losers lose before the winners win is something of an adage within the investment community, a phenomenon known as the J curve.”

Jonathan Silver, former head of the program, enumerated his top complaints about media coverage: “One is reporters suggesting that because Solyndra failed, the larger loan program is a failure, ignoring the rest of the portfolio. Another is reporters saying that the $535 million in loan guarantees allocated to Solyndra were ‘lost’ when it went bankrupt. ‘It recirculated in the American economy,’ Silver said. ‘It may have been suboptimal, but the money’s not lost.’ Meanwhile, success stories, like DOE’s early investment in electric-car company Tesla Motors, have largely flown under the radar.”

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