The Unknown Gov't Bank that is Giving Away many Billions of Your Money
It has also come to light that an essentially unknown government bank is holding $61 billion in loans (of course, they have obviously given out much more than that). So the Post Office is getting a direct government subsidy. The Postal Workers' Union has been claiming in ads that they haven't been getting money. Elizabeth MacDonald has this excellent article at Fox News (it is much longer than the excerpt and should be read):
Sitting at the center of the Solyndra scandal is an off-balance-sheet bank at the Treasury Department that dates back to 1973.
This little-known government bank, the Federal Financing Bank [FFB], had a zero balance in 2008 for green energy projects, but now, with little Congressional oversight, it is giving out billions of dollars in loans to White House pet projects often at dirt-cheap interest rates below 1%.
In July alone, the government bank, which had $61 billion in assets, lent nearly three quarters of a billion dollars in taxpayer funds with no Congressional checks and balances.
Plus the bank is funding the insolvent U.S. Post Office; the White House’s expensive green car projects at Ford Motor, Nissan and Tesla Motors; a $485 million loan to an expensive solar project that’s lost $160 million over the last three years that’s backed by Google . . . ; plus the FFB is funding the teetering HOPE housing bailout program, which gives delinquent mortgage borrowers breaks on their loans.
And according to KPMG’s audit report of the bank, the FFB is losing billions of dollars in taxpayer money because it is forgoing collecting interest costs on already inexpensive loans that are financing projects at agencies like the Agriculture Dept.
What’s scary for taxpayers is this: The FFB can borrow unlimited amounts of taxpayer money from the Treasury for these kinds of political pet projects. Under the 1973 “FFB Act, the bank may, with the approval of the Secretary, borrow without limit from the Treasury,” says the bank’s audited statements from KPMG.
The Treasury Department’s inspector general is now investigating the bank over its $528 million loan to Solyndra. FFB’s chairman of the board is Treasury Secretary Tim Geithner, and the bank’s board executives are Treasury officials.
Who is getting the FFB’s green energy money? . . .
. . . Solyndra was still getting loans from the FFB up until it filed for bankruptcy. It got $3 million in loans at a 0.89% rate just a month and a half before it filed for bankruptcy protection.
The FFB is also giving loans to risky solar companies as well as to a money-losing solar energy outfit backed by companies such as Google . . . that has spilled $160 million in red ink for the last three years.
In the month of July alone, the FFB gave a $12.5 million loan to Abound Solar; 60% of Abound's balance sheet will come from federal taxpayers, or $400 million in guaranteed federal loans.
FFB also gave a $117,330 loan to the struggling Kahuku Wind Power and more than $77 million to the Solar Partners companies, which are due $485 million in White House approved loans.
The Solar Partners companies are units of BrightSource Energy, which is building a massive solar-powered energy plant near the Mojave Desert in San Bernardino, California.
BrightSource lost $45 million in 2008, $44 million in 2009, and $72 million in 2010, even though it has rich backers that include Google . . . .
Besides the green energy projects, the FFB provides a backdoor government bailout of the US Post Office, which has been spilling red ink. The FFB has lent the US Post Office so far $12.6 billion. The Post Office faces an estimated $10 billion shortfall this year . . .
And the government bank gave loans to car and car parts manufacturers to retrofit their plants to make green cars. The FFB lent Ford Motor $163 million for its green car programs. The FFB is now financing projects at Fisker Automotive, Nissan North America and Tesla Motors, with $528.6 million, $1.4 billion and $465 million in federal loans, respectively. . . .
For Tesla, "It lost $55.7 million in 2009, $154.3 million in 2010, and $108 million for the first six months of 2011." The weaknesses behind pushing electric cars is discussed here.