Today’s lesson: How to squander taxpayer money. Start with a cause that looks good. Use public money to pick winners and losers. Add in questionable oversight. And wait.
Oregon’s Department of Energy helped create a textbook case, highlighted recently by a new state audit and an article in The Oregonian.
Legislators created a small-scale energy loan program to “finance fixed-rate, secured loans for the development of energy conservation, renewable energy and recycling projects within Oregon.”
There’s your good cause.
Enter SoloPower. It was going to make better solar panels. They were lighter and thinner. It was going to create some 450 good-paying jobs in Oregon in north Portland.
The state of Oregon backed the concept.
The state Energy Department loaned the company $10 million in 2011. Business Oregon gave it $20 million in tax credits. There were another $197 million in federal tax credits. Portland chipped in too, agreeing to cover half the debt to the state if SoloPower created the jobs.
There were reasons to think it would all come together. The company had access to millions to invest in a factory and did so.
There’s the picking of the winner.
What could possibly go wrong?
The product was untested. It was not a proven market.
There’s some questionable oversight.
It all came crashing down. The panels turned out to be more expensive than other panels. They did not sell well enough. The company shut down the factory in 2013. Soon after, all the government entities were scrambling to get their money back. Multnomah County was looking to seize SoloPower’s equipment for delinquent taxes. Portland was on the hook for its $5 million to the state. It will be paying that off until October 2020.
Then in July 2017, the state Department of Energy heaped on some more financial misery. SoloPower asked the department for money to cover its rent for a couple months. The department had already declared SoloPower in default. It gave SoloPower $641,835 for rent, anyway.
It was not a quick or casual decision. It took months of discussion. But a new state audit shows the state department got no collateral. It chose to believe verbal assurances that some injection of capital would revive SoloPower. Go ahead and call that stupid.
There’s some more questionable oversight.
SoloPower now appears to be dead. Squandering complete.