Federico Pena, Obama surrogate, defends Abound Solar, federal loans

In Colorado, a state that will play an important role in today's presidential election, Barack Obama has battled negative press regarding Abound Solar, a Loveland solar-panel company that went bankrupt this summer despite federal support. It's become a talking point against the president, but Federico Peña, a top Obama surrogate in Colorado who also happens to be a former U.S. Secretary of Energy, calls the criticisms political noise.

The controversy around Abound Solar, which had received loan support from the Department of Energy, recently made headlines when 9News' Kyle Clark raised the issue in a satellite interview with Obama that ended up getting national attention. At the same time, a conservative website unearthed internal DOE documents they say prove that the White House's support of Abound was politically motivated, even though officials had warning signs that the technology could be unsuccessful.

The White House and the Obama campaign have repeatedly dismissed these accusations, but the controversy around Abound continues to conservative claims of reckless spending and investments under Obama.

(For a more scientific and economic perspective, we recently spoke with a former National Renewable Energy Lab manager who worked closely with Abound. He defended the company and its government support, noting that there was no way officials could have predicted the difficult global market forces that led to the firm's bankruptcy).

At a Joe Biden rally in Arvada on Saturday, we raised the subject with Peña, the ex-mayor of Denver and a former U.S. Secretary of Energy under Bill Clinton who's currently an Obama campaign co-chair.

Peña, who has been campaigning for Obama in Colorado for months, said the DOE program that provides loans like the ones that went to Abound, is a solid one with a great record of successes.

"The loan guarantee program run by the Department of Energy was run by a gentleman who came out of the private equity world. He knows exactly what he's doing. So over 95 percent of the loans are good. They're gonna be successful. They're doing well," he said. "Some of them did not work. But that's the same thing we've seen with bank loans. That's the same thing we've seen with [Mitt Romney's former company] Bain Capital. That's what's going to happen when you have a program that's trying to encourage new innovation, new energy companies. They're gonna be a few that don't work, but the overwhelming majority have been great successes and nobody talks about that."

Peña, like many in the solar energy field, explained that competition globally has challenged these innovations.

"It's unfortunate, but again, we were dealing with China reductions and the economy," he said in the context of noting that Romney doesn't support the Wind Production Tax Credit and would let it expire, thereby presumably reducing the number of alternative energy jobs.

"The bottom line is this: The loan guarantee program of the DOE has been a great success. And our failure as a country has been, we have not invested in helping not only create new technology but commercializing new technology. And that's what the president is trying to do with this loan guarantee program," he said.

Continue for more from our interview with Federico Peña. Is the negative coverage regarding Abound frustrating for Peña?

"What's frustrating to me is when I was in the Department of Energy, I didn't have that kind of money," he said. "I wish I would've had a loan guarantee program like that, because we could've done a lot more. But we were going through a crisis and trying to reduce the deficit and all that. The president is trying to get the economy going, create this new energy economy. It's absolutely the right thing to do."

In terms of accusations about political motivations in Abound's investments, Peña said, "I don't believe in [those reports]...because, look, all the documentation is public, so DOE will have to release all that information. And of course, what people forget is some of these investments were made when Bush was president.... He started the loan guarantee program, so if it was so bad, why did a Republican president start the program to begin with? So you have to sort of put it in context.

"But the most important point is that the overwhelming majority of the projects have been successful, are going to be successful. A few are not going to work, but that's why they call it a loan guarantee program."

Peña pointed out that risks are inherent in these kinds of investments in private business and in government-backed innovations.

"When a bank makes a loan, there's a certain level of risk. When a private equity fund makes an investment...there are no guarantees that 100 percent of the companies you invest in are going to succeed. But when over 95 percent of them do, that's a pretty good track record," he said.

In the larger picture, this kind of backlash is hostile to alternative energy, he added.

"Mr. Romney has been very clear. He doesn't believe in it. He thinks the private sector should do it all. Well, let me tell you something: The private sector is not going to invest in these programs by themselves. They need guarantees. They need government-backed guarantees.... They're not gonna do what the DOE is doing."

Plus, he said, the government has a history of supporting unsustainable energy industries.

"The other irony is that a lot of these conservatives and people who are supporting Romney and Ryan say that the clean energy industry ought to exist on its own," he noted. "Well. if that's true, then why did we give a hundred years of tax breaks and incentives to the oil and gas industry and the coal industry?"

More from our Environment archive: "Joe Biden in Arvada: Mitt Romney's a liar, doesn't believe in average Americans."

Follow Sam Levin on Twitter at @SamTLevin. E-mail the author at [email protected].

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