Obama Admin Uses Secret Bank to Pour Cash into Green Pet Projects
September 30, 2011 - 11:41 am
The bank itself — the Federal Financing Bank — has been around since 1973. But according to Fox it was zeroed out in 2008. Since Obama’s inauguration, the FFB has been used to hand out massive loans on green projects, at rock bottom interest rates not available on the market. And one of the FFB’s biggest customers: Solyndra.
The bank is also funding the insolvent U.S. Postal Service; the White House’s expensive green car projects at Ford Motor, Nissan and Tesla Motors; a $485 million loan to an expensive solar project that’s lost $160 million over the last three years that’s backed by Google, BP and Chevron; plus the FFB is funding the teetering HOPE housing bailout program, which gives delinquent mortgage borrowers breaks on their loans.
And according to KPMG’s audit report of the bank, the FFB is losing billions of dollars in taxpayer money because it is forgoing collecting interest costs on already inexpensive loans that are financing projects at agencies like the Agriculture Department.
What’s scary for taxpayers is this: The FFB can borrow unlimited amounts of taxpayer money from the Treasury for these kinds of political pet projects. Under the 1973 “FFB Act, the bank may, with the approval of the Secretary, borrow without limit from the Treasury,” says the bank’s audited statements from KPMG.
That puts Turbo Tax Tim Geithner in charge of the FFB’s loans, and he has nearly a blank check. Congressional oversight has been minimal. The Obama era loans started with — wait for it — the 2009 stimulus.
The FFB then began giving green loans backed by the Department of Energy after the Obama Administration’s stimulus bill of 2009 was enacted. After stimulus was signed into law by President Barack Obama, the FFB then began funding clean energy programs, backed by $2.4 billion appropriated by Congress. Under this program, Solyndra got $528 million.
The FFB doesn’t just fund green energy projects. It also funds the Home Ownership Preservation Entity (HOPE) Fund, enacted under the Bush Administration to help distressed borrowers avoid foreclosure by reducing their mortgage payments.
The bank is going full bore in helping to fund the White House’s foreclosure bailouts via buying HOPE bonds, a program that could hit $300 billion in federal costs.