The Wisdom of Private Enterprise - Part 2

In Part 1, Cogport provided an overview of why the Government should not be involved in Private Enterprise.  You are encouraged to read Part 1 to understand why government investment in private companies is bad policy.

The recent taking of a 10% Government stake in Intel by the Trump Administration has brought this issue to the forefront.

The purpose of this Article is to show how Government investment goes badly.

We start with previous history of government experience in Private Investment.

Solar Technolgy

The Obama Administration had a policy that alternative energy in solar and wind would resolve climate change by going “Green.”

Was this a good policy?  That is a whole different debate that Cogport will address in the future.

The 3 largest recipients of loans under this program were:

1.    Solyndra

2.    Abound Solar

3.    Crescent Dunes / Tonopah Solar Energy

Loans From Government (Taxpayer) Funds

Total Loan Amount………………………………………….   $ 3.01 Billion

Total Losses From Bankruptcy and Early Closure……….  $ 2.17 Billion

Percentage Loss on Investment…………………………    72%

Compare this 72% loss to the record of Major Private Banks on commercial loans for business investment:

According to the FDIC’s Quarterly Banking Profile for Q4 2024, the net charge-off ratio for commercial and industrial loans stood at 0.72 %.

The Government’s record on the Solar program is 100 Times worse than Private Sector Banking Management in terms of losses.

This is the book on Government Policy that engages in Private Enterprise.

Politicians and Bureaucrats have little expertise in this arena, and it results in massive losses of taxpayer dollars.  But what do the politicians care – it’s not their money.

There are other issues that need to be addressed:

1.    The Conflict of Interest when the Government controls the law and regulations affecting the companies in which it invests. Favoritism towards these companies is an inherent danger.

2.    Money in Politics can influence Government decisions.

Please refer to the previous 8 Part Series of posts about Money in Politics, which started August 29, 2024 on Cogport.com for a deep background look.  Money has a significant influence on political action.

In the case of Solyndra, here are some facts:

Steve Spinner

A prominent Obama-era fundraiser, Spinner raised at least $500,000 for the campaign.

He later served as an adviser at the Department of Energy during the time Solyndra received its $535 million federal loan guarantee.

George Kaiser

Another major Obama fundraiser, Kaiser bundled between $50,000 and $100,000 for Obama during the 2008 campaign.

His family foundation was a significant investor in Solyndra.

There is no proof of anything here, but the connections do raise suspicions.

In the case of Abound Solar, here are some facts:

Pat Stryker, a primary investor in Abound via Bohemian Companies, was a major Democratic donor—having contributed millions to Democratic campaigns, including Barack Obama and Colorado politicians like Betsy Markey.

Abound received strong bipartisan support, including state incentives (e.g., from Republican Governor Mitch Daniels of Indiana) and backing from both Republican and Democratic members of Congress pushing for its federal $400 million DOE loan. 

In the case of Crescent Dunes / Tonopah Solar Energy:

FactCheck.org highlighted a connection to Ron Pelosi (Nancy Pelosi's brother-in-law), who was on the board of Pacific Corporate Group, an investment partner in the project.

SUMMARY

Poor judgment by Government officials in private investment seems obvious.

The picture is complicated by money and political connections to these companies.  

This is a mix that takes taxpayer dollars without benefit to the People.

As usual, I found the subject has become much bigger than expected after the research started.  And let me say, you can check out the data yourself, but it has been extremely difficult to find and interpret the facts.  There is no “go-to” source.

So, this Series will be more extended than planned.

Future Topics are the CHIPS Act and the SBA.

David Hollaender                                             September 9, 2025

Cogport.com                                                    Copyright