Pollock: Another DOE Loan Scandal

Yet again, evidence of impropriety surrounds the issuance of federal Department of Energy “green” loan guarantees — in this instance, loans were granted to a foreign company with Democratic Party ties.

Over the last two years, DOE Secretary Steven Chu has awarded Spain-based Abengoa — a sprawling, multi-national industrial firm operating in 70 countries — loan guarantees worth a staggering $2.78 billion for solar and ethanol plants.

Abengoa is a Madrid-based conglomerate that operates throughout Europe, the Middle East, Latin America, and Asia. It is not starved for cash: according to its 2009 annual report, the firm was valued at $25.5 billion, enjoying a cash flow of $4 billion and a net profit of $288 million. It is traded on the Madrid and Barcelona stock exchanges and employs more than 25,000 workers.

At first glance, Abengoa does not appear to require U.S. government-backed loan guarantees. In 2010 it qualified for private bank loans in 11 countries worth $161 million. In July 2009 alone,  Abengoa issued convertible bonds in Europe worth $688 million.

Overall, the Energy Department has awarded Abengoa three separate loan guarantees.


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