Five '1-Percenters' That Have Milked The Stimulus


The federal government's massive investment in green energy represents a dramatic shift in the role the government played in 20th century technology breakthroughs such as the PC, which powered astronomical gross domestic product (GDP) growth.

The PC boom began with Intel's development of the first microprocessor. Intel was founded in 1968 by engineers Gordon Moore and Robert Noyce, backed financially from legendary venture capitalist Arthur Rock with just $10,000 and $2.5 million in convertible debentures. Intel received no direct funding from the government. The Obama administration's green energy funding bonanza represents a move by the federal government to directly fund green energy technology businesses.

"A lot of the scientific support for technology in the past came either in the form of government research efforts or efforts that focused heavily on basic research," said Schweizer. "What you have now is the federal government essentially picking winners and losers. They are choosing to back certain types of solar projects rather than not back other solar projects. So they are deciding de facto where the money is going to flow."

Republican presidential candidate Mitt Romney attacked the Obama administration's aggressive renewable energy investments in solar and wind in the recent debate with President Obama. "You put $90 billion -- like 50 years worth of breaks -- into solar and wind, to -- to Solyndra and Fisker and Tesla and Ener1. I mean, I -- I had a friend who said, you don't just pick the winners and losers; you pick the losers."

A number of economists and researchers have pointed to the Obama administration's hard-charging drive to spend quickly on clean energy as a way to dig out of the economic crisis. That subject is addressed in a preliminary review of ARRA's Clean Energy Package by Joseph E. Aldy, assistant professor of public policy for Harvard's Kennedy School. As an economist on the Obama Transition Team's energy and environmental working group, Aldy said in a research paper that "as a reflection of how quickly the stimulus target moved during this time, in one meeting with the shadow OMB [Office of Management and Budget], I was informed that, 'we were not spending enough' on the clean energy package, which at that time was smaller than the final version in the Recovery Act."

The Energy Department ranks No. 6 on the list of the most funds paid out on the Recovery.gov website, with $27.70 billion in funds paid out so far, according to Recovery.gov. With data from the Recovery.gov database, lobbying expenditure and campaign contribution data from the Center for Responsive Politics, entries from the White House visitor's log, and interviews with economists and government watchdogs, CRN ranked the top five politically connected 1-percenters who benefited from ARRA funding.

Once again, they all refused to be interviewed for this story. But several sources close to them maintain that characterizing these individuals as benefiting from the stimulus is unfair given the need for government investment in clean energy, infrastructure and technology.

What's more, these sources said, there is a fine distinction between loan guarantees provided by the government and equity financing.

"The debt actually comes from the banks, but it is backed by the government so it is not actually an outlay of money on behalf of the government," said one source, who refused to go on the record with regard to the loan guarantees provided by the government. "We have not been involved in any of the loan guarantees for any of the projects we have invested in. We were not involved in the loan guarantee process. Those loan guarantees were already in place when we invested in these projects. We provided equity financing."

Here is part two of our three-part series on ARRA, looking at the top five individuals who benefited from the legislation.

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