Unfortunately, it’s sometimes the best crony that wins when it comes to government favors, and it may be the public that loses out.
In a brief report by Reason Foundation, researchers Victor Nava and Julian Morris highlight the crony tendencies of the Department of Energy’s Section 1705 Loan Guarantee Program for handing out green energy loans. Many of the program’s $16 billion dollars have been awarded to “failed enterprises,” like Solyndra, and other poor investments that have not gotten off the ground.
“We found that many recipients had close ties to those in charge of approving the loan guarantees. Moroever, we found that the DOE allocated funds broadly in proportion to applicants’ lobbying expenditures. In other words, it is likely that loan guarantees were allocated not on the merits of the projects but, rather, according to the degree to which the applicants were able to use political connections.”
Nava and Morris infer that this system may have counteracted the professed intention of even helping the environment by wasting money on riskier projects instead of more sustainable ones that might have actually worked better.
The authors say,
“To protect taxpayers from further waste and to increase the sustainability of investments in technologies that result in environmental protection, the government should stop guaranteeing loans for ‘green’ energy projects immediately.”
What would that mean for projects like Kemper?
>>Source: Nava, Victor and Julian Morris. “Lobbying, Cronyism and Section 1706 Loan Guarantees.” Reason Foundation. 3 Dec. 2013.