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Busted: DOE Altered Loan Program Bulletins



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It appears as though the Obama administration has been caught red-handed trying to cover up evidence in relation to the “green” loans programs that helped finance Solyndra. CNBC reports that a number of press releases posted by the Department of Energy have been retroactively altered to remove the name a solar company thought by many to be the next “green” failure:

The changes occurred in two press releases from the Department of Energy’s loan guarantee program — the same program that has been the center of controversy surrounding the failed solar company Solyndra.

Both were changed to remove the name of a company that has received negative press attention in recent days, SunPower, and replace it with the name of another company, NRG Energy.

In the April case, the Department of Energy loan programs office announced in a press release on April 12 “conditional commitment” to a $1.187 billion loan guarantee to support the California Valley Solar Ranch project, which it said was “sponsored by SunPower Corporation.”

But that release was later changed on one website to say the project was “sponsored by NRG Energy.” The date on the release remained “April 12, 2011.”

The name substitution is not completely random. NRG recently finalized its acquisition of the California Valley Solar Ranch project from SunPower in September. However, at the time of the press release in April, SunPower still controlled the project.

Naturally, the DOE blames ‘outside contractors,’ who “inadvertently” altered the news bulletins while updating the loans program website.

Either way, what possible motivation could DOE have to making the changes? Well, here’s a possibility:

SunPower now carries $820 million in debt, an amount $20 million greater than its market capitalization. If SunPower was a bank, the feds would shut it down. Instead, it received a lifeline twice the size of the money sent down the Solyndra drain.

Indeed, SunPower received a $1.2 billion loan guarantee just days before the DOE’s Sept. 30 deadline to approve such agreements. The company, like Solyndra, is also extremely well-connected politically.

Rep. George Miller (D., Calif.), co-chairman of the Democratic Steering and Policy Committee and close confidant of House Minority Leader Nancy Pelosi (who has Solyndra connections of her own), was a strong advocate for SunPower, which according to PAC filings contributed $15,650 to House and Senate Candidates in 2010. Of that, $14,650 went to Democrats, including $4,000 to Senate Majority Leader Harry Reid (D., Nev.), $2,900 to Sen. Barbara Boxer (D., Calif.) and $500 to Miller himself. Oh, and the company also hired Miller’s son as a lobbyist.

SunPower is currently on track to become the second embarrassing failure in the DOE’s loan portfolio. It is deeply in debt, and company executives recently announced plans to lower its earnings projections for 2011 even further.

More:

In his Sept. 26 column for SeekingAlpha.com, Stoyan Elitzen lists SunPower as the ninth-most-shorted solar stock in either the New York Stock Exchange or NASDAQ markets.  Short sellers are betting that a stock price will go down, as opposed to those who buy long, who expect a stock price to up. 

According the Elitzen, the size of SunPower’s short position is equal to 15 days of its average daily volume of 725,000 shares per day.  By any measure, such pessimism is a banshee screaming in the night for a company’s stock price that has already lost 94% of value from its 2007 apex. 

Although its stock has recovered from its all-time low Oct. 4 of $6.60 per share to trade between $8 and $9 per share, it has been a steep slide from its all-time high Dec. 3, 2007 of $133.  Then, the company was worth $13 billion. 

Today, its market capitalization is $800 million, just short of its debt of $820 million, according to the company’s July filings for the second quarter.

It certainly doesn’t look good.

Video here.



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