The Solyndra company was a designer, manufacturer, and sold commercial grade solar systems and solar panels designed for business rooftops. In 2009, the Department of Energy provided Solyndra a $535 million dollar loan guarantee supported by President Obama’s American Recovery and Reinvestment Act, which provided billions of dollars in loan guarantees to green energy companies (factcheck.org). Supporting clean energy businesses was supposed to create jobs and cut America’s reliance on foreign oil. However, Solyndra was a failing company Solyndra ended up declaring bankruptcy two and a half years after receiving the loan guarantee from the Department of Energy. Ultimately, Solyndra failed as a company because they could not compete with
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During the investigation, documents surfaced showing senior officials rushed to push the approval on the load so Vice President Biden could announce it during a trip to California. The records do not show anyone was pressured by the Energy Department to approve the Solyndra loan to benefit political contributors, but documents do show the Obama Administration had a clear focus on promoting Solyndra and its clean energy policies (washingtonpost.com). The biggest scandal occurred in Febrauary 2011 when the Energy Department helped Solyndra restructure its loan. The Energy Department agreed that $75 million in new funds from private investors became senior debt that ensured it would be paid back ahead of the $385 million in federal loans. This made it possible for investors to recover $75 million before an federal loans were repaid. During congressional hearings, Republican representatives highlighted a paragraph in the Energy Policy Act of 2005 that states obligations, or loan guarantees, shall not be subordinated to other financing …show more content…
The Solyndra employees claim the company failed to provide them 60 days’ notice before dismissal as stated by the U.S. Fair Labor Standards Act. The company did not issue a Workers Adjustment and Retraining notification (WARN Act). The court ruled in favor of the employees but Solyndra did not have enough to cover all of its expenses. The class action lawsuit sought 60 days' pay, 401(k) contributions and health benefits for the more than 1,100 employees affected, who were let go without severance. Unfortunately, California’s WARN Act exempts companies that are seeking funding or a buyer (sfgate.com).
The ethical framework of the Solyndra scandal is the abuse of power within the Obama administration and Department of Energy as well as the government being used as a venture capitalist. The government backed loan was used to fund the company and not properly evaluated to make sure the company was profitable enough to be able to repay the federal government. Also, there was a breach of honesty with the Solyndra company because they did not inform the Department of Justice about its financial difficulties, which eventually led to federal government restructuring its
During the investigation, documents surfaced showing senior officials rushed to push the approval on the load so Vice President Biden could announce it during a trip to California. The records do not show anyone was pressured by the Energy Department to approve the Solyndra loan to benefit political contributors, but documents do show the Obama Administration had a clear focus on promoting Solyndra and its clean energy policies (washingtonpost.com). The biggest scandal occurred in Febrauary 2011 when the Energy Department helped Solyndra restructure its loan. The Energy Department agreed that $75 million in new funds from private investors became senior debt that ensured it would be paid back ahead of the $385 million in federal loans. This made it possible for investors to recover $75 million before an federal loans were repaid. During congressional hearings, Republican representatives highlighted a paragraph in the Energy Policy Act of 2005 that states obligations, or loan guarantees, shall not be subordinated to other financing …show more content…
The Solyndra employees claim the company failed to provide them 60 days’ notice before dismissal as stated by the U.S. Fair Labor Standards Act. The company did not issue a Workers Adjustment and Retraining notification (WARN Act). The court ruled in favor of the employees but Solyndra did not have enough to cover all of its expenses. The class action lawsuit sought 60 days' pay, 401(k) contributions and health benefits for the more than 1,100 employees affected, who were let go without severance. Unfortunately, California’s WARN Act exempts companies that are seeking funding or a buyer (sfgate.com).
The ethical framework of the Solyndra scandal is the abuse of power within the Obama administration and Department of Energy as well as the government being used as a venture capitalist. The government backed loan was used to fund the company and not properly evaluated to make sure the company was profitable enough to be able to repay the federal government. Also, there was a breach of honesty with the Solyndra company because they did not inform the Department of Justice about its financial difficulties, which eventually led to federal government restructuring its