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Unfortunately for American taxpayers, the Department of Energy's loan guarantee program is even worse than the Journal thinks. Running a bank is outside the DOE's core competencies to begin with, but a recent report by the Government Accountability Office suggests that the DOE is rash, too. According to the July report, the DOE issued half its conditional loan guarantees before full reviews had been conducted.
Perhaps this explains why the DOE's first loan guarantee is proving such a monumental bust. A year ago, California-based solar power manufacturer Solyndra received a $535 million loan backed by stimulus funds. In June, it pulled back on a planned public offering after a PricewaterhouseCooper's audit found that the company's finances "raise substantial doubt about its ability to continue as a going concern." Last week, the company announced that it would shutter a plant and lay off 170 employees.