The Hope-a-Nomics Disaster: One Company's Horror Story
November 9, 2012 - 5:31 AM
Colorado Distribution Group is a privately held storage and shipping company based in Denver. Thanks to hope-a-nomics, its warehouse is saddled with nearly 7,000 pallets of federally subsidized solar panels (one-third of which are completely spoiled and unsalable), along with related detritus such as broken glass and stray module parts.
While $22,000/month in storage costs go unpaid, the panels consume up to a third of the company's warehouse space. Legal costs have forced CDG to slash payroll and lay off at least three employees. A source with knowledge of CDG's woes told me this week the company is facing pressure by the Department of Energy to drop its petition to recoup those costs. The feds want CDG to swallow a $1.4 million tab to dispose of the bum solar panels.
In July, according to Dow Jones, CDG asked a Delaware bankruptcy court "for permission either to sell or collect rent on the property Abound Solar Inc. has at its facility, saying the situation is threatening its ability to stay in business." Like many private enterprises in the Age of Obama's Brass-Knuckled Politics of Revenge, fear of retribution holds back many from coming forward publicly about such attempted shakedowns.
CDG serves industries ranging from automotive to food and beverage, electronic, medical, furniture, clothing, sporting goods and telecommunications. Founded in 2005, CDG handles distribution, fulfillment, transportation, logistics and inventory management using a high-tech data system. For the past three years, the company warehoused solar panels manufactured by Fort Collins-based Abound Solar.
Yes, Abound Solar. Also known as: Colorado's own Solyndra.
In June, less than a year after fellow Obama green boondoggle Solyndra went belly up, Abound filed for bankruptcy. As I reported in March, the financial outlook of the $400 million DOE loan guarantee recipient was based on false hope and imaginary change.
Obama's envirocrats ignored bright red flags from Fitch Ratings about Abound's substandard technology and failures to meet basic efficiency targets.
Abound borrowed $70 million against its $400 million Obama DOE loan guarantee; taxpayers will lose up to $60 million on the loan after the bankruptcy proceedings are complete. Nearly 125 Abound Solar employees lost their jobs. Screwed-over companies like CDG that did business with Abound are not alone. At least one other warehouse in Colorado is storing the costly panels. And an untold number of related contractors and businesses have been stiffed. "I did a lot of machining for Abound," one business owner told me this summer, "and they went under owing me a fair amount."
Recently released internal documents show that customers demanded replacements for the panels after experiencing "low performance," "under performance" and "catastrophic failures." Credit and technical advisers at DOE complained about having "major issues" with the Abound Solar deal and expressed concern over the "transaction pressure under which we are all now operating." The documents fly in the face of Obama's denial — just days before Election Day — that his White House played any role in this fiscal disaster.
The investigative work of Colorado's Todd Shepherd at CompleteColorado.com, Amy Oliver at the Independence Institute and Michael Sandoval now of the Heritage Foundation exposed Abound's crony ties to the Obama administration.
Like Solyndra, Abound had a deep-pocketed bundler with ties to the White House. Progressive activist and billionaire heiress Pat Stryker, a repeat visitor to the Obama White House, owns an investment firm that invested considerably in Abound and donated nearly $500 million to the Democrats between 2008 and 2012.
Criminal and civil probes into Abound Solar's alleged malfeasance — there are reports that the firm knowingly sold faulty goods — have been launched in both Colorado and on Capitol Hill. The stench of pay-for-play abounds. While Obama giddily promises his cronies and sycophants that "the best is yet to come," small-business owners are fighting for their lives. Where's their "fair share"?