The Solyndra scandal: Pre-empting plunder
For once, the Internal Revenue Service is taxpayers' best friend, urging that the owners of Solyndra — the Obama administration's signature crony-capitalist boondoggle — not be allowed to plunder their pockets in bankruptcy beyond the half-billion-dollars-plus the defunct solar-panel maker's federal loan guarantee already has cost them.
Solyndra's proposed reorganization plan sets aside just $7 million to $8 million for unsecured creditors and includes a shell corporation that would be able to use net operating losses estimated at $150 million to offset future tax liabilities, The Washington Times reports.
“The only reason for the shell corporation to exist ... is to enable its owners to exploit these tax attributes, which would be lost in liquidation,” IRS lawyers said in a filing in U.S. Bankruptcy Court in Delaware. They also said the reorganization plan's “principal purpose is tax avoidance.”
The stench intensifies when considering one of two big Solyndra investors that would own nearly all of the shell corporation is Argonaut Ventures — the investment vehicle of Oklahoma businessman and 2008 Obama fundraiser George Kaiser. And the IRS contends that Solyndra owners had “planned meticulously” as long ago as 2010 to use this tax-avoidance scheme.
The bankruptcy judge must heed the IRS and disallow the Solyndra owners' attempt to add the insult of further losses to the injury they and the Obama administration have already inflicted on taxpayers' bottom line.