A financially-troubled Canadian alternative energy company with ties to Senate Majority Leader Harry Reid paid a director the lion's share of $758,828 (CAD) in reported consulting fees, according to an analysis of the filings made by the company. The fee was a part of a consulting agreement in order to successfully arrange a loan guarantee by the Department of Energy.
The loan, made by insurance powerhouse John Hancock, could put taxpayers at risk for 80 percent of both interest and principal due to the insurance company under the terms of the agreement amidst signs that the energy company may be bankrupt by the end of the year.
In the June filings for Canadian-based Nevada Geothermal, which according to the New York Times employs only 22 people in Nevada, the company’s auditors issued “going-concern” warnings that without additional investment or revenues, the company could cease operations.
At stake is about $135 million in financing by the federal government including loan guarantees and grants, says the Times.
The note from auditors Deloitte & Touche LLP’s Canadian office notes that “the Company has incurred net losses over the past several years, has an accumulated deficit of $44.0 million and an anticipated inability to retire its long-term liabilities. These conditions, along with other matters as set forth in Note 1, indicate the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.”
Note 1 states that the company is “not able to service its loan with EIG Global Energy Partners (“EIG”) for the full loan term,” and that company did not have sufficient “power production” to meet the terms of the loan. The EIG loan is in addition to the government guaranteed loan made by John Hancock.
No wonder they gave the director a big, fat bonus. They were able to get a loan guarantee from Obama even though they couldn’t service their existing loan.
It gives a whole new meaning to the phrase: “Occupy Wall Street.”
The fee was detailed in the Consolidated Financial Statements for the 4th Quarter ending June 30th, 2011.
What do you call a loan that’s sub-sub-sub-prime? Guaranteed by Obama, that’s what.
At these negative rates of return, no wonder he wants to tax the rich.
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