I'm not sure if I'm ready to say business and politics shouldn't mix -- I can't see how to avoid it. But the skirmish over Solyndra LLC's bankruptcy is all about politics. If it had been more about business, the whole mess could have been avoided.
For those of you not following the story, the Obama administration backed a $535 million loan guarantee for the California solar panel maker. The move was part of an overall government initiative to spur development in solar power and other clean energies. The problem, other than this week's bankruptcy filing, is that the government's due diligence indicated Solyndra was in trouble as early as 2009. Two independent audits raised red flags about its long-term viability.
Either due diligence was ignored, or the government rushed to back the loan as part of its political agenda.
Now the deal is under investigation, and the responses have broken straight down party lines. Republicans accuse the White House of pushing its agenda to the detriment of fiscal responsibility. The Obama administration insists it granted the loan on the company's merits. Some in the GOP say global warming is a scare tactic embraced by the left. Most Democrats say the environment is in grave danger.
Politics aside, let's look at the business case. If I were a potential investor in a company, would I conduct due diligence? Would I require independent assessments of its business plans? Would I expect regular reports on its progress? Would I go over every report with a fine-toothed comb? Yes to all of the above.
Here's my problem. I consider that $535 million my money. A portion of it came from my taxes. Independent research indicated Solyndra was headed for trouble. The loan was granted anyway. It's bad business.
I can't even begin to list all the ways the government (under all administrations) uses my tax money in ways I do not support. But for the most part, I recognize when my objections are political and when they are not. As complicated as business is, some things are pretty cut and dried -- look at the numbers, measure your risk, and ask a lot of questions. Make a decision based on business, not politics.
Even though I am an avid supporter of alternative technologies, this is one investment I don't think I would have made.