Some Projects Not So Shovel Ready
Earlier this week, TPA posted a blog that discussed a new, nearly unprecedented effort on part of the Treasury Department to recoup taxpayer money that had been “awarded” to now-bankrupt green energy. While so far Treasury has only sought out one company to return its government funding, we should not downplay what a significant, noteworthy step the feds are making.
Not only does the request for funding to be returned signal an implicit acknowledgement that the government’s bet was a bad one, it also demonstrates a good faith effort to right the agency’s wrong. Treasury should continue to fight for the return of taxpayer money lost on green energy companies with faltering financial footing, but the feds shouldn’t stop there. Washington should look to other places where taxpayer dollars – distributed to companies in the form of the 2009 stimulus and through other programs – can be recovered. A good place to start is to request that money be returned from companies that have not used the federal stimulus money.
One of the chief selling points of the astronomically expensive so-called American Recovery and Reinvestment Act was that it would immediately create hundreds upon thousands of “shovel ready” jobs. Over three years from its date of enactment and with an unemployment rate that has remained well above 8 percent, there’s no question that, by and large, these supposedly shovel ready jobs never came. There are several reasons for this, but the one this blog will address is the fact that many of the companies who received government money have not used it. A recent article in the Boston Herald provides more information about two such companies.
Two green energy companies, SCS Energy and 1366 Technologies Inc., sit close to the top of the list of companies in Massachusetts that were recipients of stimulus funding. According to the Boston Herald article “more than 2,200 entities split nearly $8 billion doled out to Massachusetts since February 2009.” SCS Energy received $275 million and has spent $75 million. 1366 Technologies has used $4 million out of its $147 million. How does 1366 Technologies plan to use the remaining $143 million? Well for starters it is “unlikely to be spent until the end of next year — and then only if a demonstration plant now under construction in Bedford proves that the company’s process to manufacture silicon solar cells actually works.” (Emphasis added). That’s right, the technology and potential of this company remains to be seen. Translation: The government gave your money to a company that is still waiting to determine if their process “actually works.” And the company’s CEO Frank van Mierlo had no problem in acknowledging “That’s relatively late, but in all fairness, that is contingent on what we do at the demonstration plant.”
To state the obvious, companies like these have failed to provide shovel ready jobs, or for that matter any sort of jobs at all – thousands of jobs in Massachusetts were lost in the last month alone. At the same time, the government could turn this disaster partially around. The situation presents Washington with an opportunity that rarely occurs in life – a chance to right its wrong. The government can fix its mistake by insisting that 1366 Technologies Inc. and SCS Energy and other companies like them return unused stimulus funds immediately. These companies have had plenty of time to use this money to supposedly create jobs. The longer the government waits to insist that the money is returned the greater likelihood the company will wastefully, perhaps even fraudulently, use these funds. It doesn’t have to be this way. The federal government can act now to cut its losses and take a step in the right direction to protect taxpayers.