DENVER (MarketWatch) — The retiring venture capitalist saw one last chance to change the world.
By Al Lewis
John Hill, now 71 years old, came across some promising solar-energy technology in 2006 and became the founding chairman of Loveland, Colo.-based Abound Solar. His company now lies in the ruins of a Chapter 7 bankruptcy liquidation, its plant shuttered, its 125 employees dismissed.
“I didn’t do it because I needed another win,” said Mr. Hill, who was 65 when he helped put together the start-up in 2006. “This was the most noble mission of my entire life. We literally could have changed world energy markets with this technology.”
Election-year politics put an end to this dream, Hill said. Abound Solar was swiftly mislabeled “another Solyndra,” and the U.S. Department of Energy subsequently withdrew a $400 million loan guarantee, Hill claimed.
Energy Department spokesman Damien LaVera wrote in a recent blog post that Abound lost its funding because the company failed to meet agreed-upon milestones. When Chinese manufacturers started dumping solar panels on the global market below cost, Abound could no longer compete, he wrote.
Solyndra was a victim of this trend, too. It failed last year, despite a $535 million loan guarantee.
Just months before Solyndra’s collapse, President Barack Obama made the mistake of doing a press conference at its shiny California headquarters and saying this: “The true engine of economic growth will always be companies like Solyndra.”
This gave Republicans ammunition to blast the president’s green-energy policies. Never mind that the Energy Department has made bad loan guarantees under Republican administrations, too. Solyndra was a blatant boondoggle, a start-up that blew $300 million on a brand-new plant it never will use.
In May, Mitt Romney had his own press conference in front of the vacant plant and called it a symbol of how little the president knows about business. “It’s also a symbol of a serious conflict of interest,” Romney said, piling on to the claim that Solyndra was a company built on cronyism.
Last week, in a congressional hearing probing Abound’s collapse, Republican lawmakers seemed more interested in whether someone greased the skids for Abound’s loan guarantee than the progress of its technology. Rep. Jim Jordan, (R-Ohio), asked an Energy Department official if he knew Pat Stryker, a Fort Collins, Colo., investor with money in Abound and a noted Obama supporter. The answer was no.
“I sat in on hundreds of meetings during the process of applying for the loan,” Hill told me. “Not once did it come up that, ‘Gee, we should get Pat Stryker to do some backdoor stuff.’ That is nothing more than cheap politics.”
Former Abound Chief Executive Craig Witsoe told lawmakers his company failed because Chinese manufacturers were indeed dumping solar panels. China has pumped tens of billions of dollars into money-losing solar companies in a bid for global market share. But that is only part of the story, Hill said.
“After Solyndra, the Department of Energy was balking and not releasing any more money under the loan guarantee because they didn’t want to be embarrassed in an election year,” he said.
It had nothing to do with milestones, he claimed. The Energy Department put so many conditions on the loan guarantee it was impossible all milestones would be met, Hill explained. They were put there as an out clause, and typically waived, until Solyndra failed, Hill said. MORE …