Billionaires tapped Energy Department loans

By Laurie Bennett

November 17, 2011 at 6:46am

Much has been made of George Kaiser’s role in the Energy Department loan to now-bankrupt Solyndra.

Kaiser is one of the Obama bundlers whose investments benefitted from DOE loans or loan guarantees.

But he also belongs to another exclusive club: billionaires who received DOE backing.

The Muckety map above shows four other such loans:

1. Agua Caliente Solar

The DOE provided a $967 million loan guarantee to this Arizona solar project in August. Members of the Walton family, heirs to the Wal-Mart fortune, are major investors in First Solar, the project contractor.

2. Kahuku Wind Power

The DOE approved a $117 million loan guarantee for this project in Hawaii. Kahuku Wind Power LLC is a subsidiary of First Wind, in which billionaire David E. Shaw is an investor. Shaw is also a fundraiser for Obama’s re-election bid.

3. Severstal Dearborn

In July, the department announced a $730 million conditional loan commitment to modernize a steel plant in Dearborn, MI. The site is owned by a subsidiary of OAO Severstal, whose CEO and controlling owner is Russian billionaire Alexei Mordashov.

4. Ford Motor Co.

The automaker borrowed $5.9 billion from DOE to introduce new technologies upgrade factories in five states. We should note that the Ford family, led by billionaire patriarch William Clay Ford Sr., holds less than 2 percent of the company shares.

Other links between billionaires and DOE loans:

  • Sergey Brin and Larry Page, founders of Google, which is a co-owner Caithness Shepherds Flat. The Oregon wind project received a partial guarantee of a $1.3 billion loan.
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    • #1.   Cynical but Realistic 11.17.2011

      I do not understand why this is so surprising. Multi-million dolar projects require Billion dollar companies to build them. Who do we suppose owns of Billion dollar companies? Billionaires!

    • #2.   Ellie Kesselman 10.24.2012

      This is rather distressing (understatement).

      Let’s start with the not-so-distressing part, all of which was well documented by whomever wrote this post. The largest sum, of $5.9 billion, went to Ford Motor Company. Based on the stated share ownership, it did not serve to enrich any individual Ford family member. This is where I like to see U.S. government funds going: To renovate manufacturing facilities in U.S.A.! Similarly, even though Severstal is a Russian-owned and domiciled company, they have invested widely in a large variety of heavy industries in the U.S.A., in some not-so-desirable areas of the country where no one else was hiring or doing new business e.g. West Virginia. Severstal has had a committed and (as far as I know) beneficial presence in U.S. domestic manufacturing, mining etc. So $730 million to improve a plant in Dearborn, Michigan (as opposed to mining of U.S. natural resources like uranium or coal, which has been a concern of mine) seemed like another good thing to me.

      The distressing items are the huge $1.3 billion (although it is only partial) loan guarantee in Google’s wind energy investment. Google, or rather, the two co-founder’s whose project it is personally, don’t need any help from the DOE.

      Second is the $117 million loan guarantee to a wind energy project that is directly owned by a subsidiary of hedge fund D.E. Shaw. True, it is “only” $117 million, not a billion dollars. But there is no reason to give scarce funds to someone who already has so much money, and spends enormous amounts on his own personal projects in computational biology. David Shaw can spend whatever he wants on protein folding, but the U.S. gov’t, the Dept of Energy, shouldn’t need to help him with his other investments. I’ve never heard of any wind energy projects in Hawaii. Is there precedent? Were there ANY entrepreneurs that weren’t already one of the 100 wealthiest people on earth (David Shaw’s rank among those 100 is documented by Forbes or Bloomberg’s ridiculous daily billionaire’s index) that had a wind energy proposal that the DoE could have given that $117 million to instead? Not even ONE?

      Finally, there’s something problematic with First Solar in Arizona, the Walton family project (I don’t recall the details though). It is the recipient of nearly one billion from the DoE. Why? I live in Arizona. Why doesn’t the DoE help local Arizona entrepreneurs with $967 million, instead of the Walton family of WALMART?!

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