Donald Trump was convicted of committing fraud in obtaining loans from banks. He was accused of overvaluing his real estate assets. He did the same thing that every other commercial borrower does with commercial banks. The banks did their own evaluation and terms were negotiated that were acceptable to both parties. Trump then paid back the loans as scheduled. What happens when a political insider and donor to high profile politicians does something similar? Crickets.
Plug Power is a major player in the hydrogen fuel cell industry. It is a company that I have talked about favorably as I am a proponent of hydrogen fuel cells. The technology is more advanced than wind and solar. There are no environmentally damaging byproducts as there are with electric vehicles. Plug power was on the cutting edge of this technology.
Plug power had received about $145 million from the Department of Energy in grant money to expand manufacturing operations in New York. They are in the final stages of having a $1.6 billion loan guaranteed by the Department of Energy. The money would be used to expand manufacturing and infrastructure facilities. Now however, investors have filed a civil suit against the company claiming fraud in overstating their financial condition. The same statements were used in applying for the DOE loan guarantees.
The group of investors began looking more closely at the company's financials after CEO Andrew Marsh announced in November that the company could run out of cash by the middle of 2024. Based upon the previously released documents, investors found it hard to believe that the company was in financial trouble. According to the attorneys for the group of investors who have reviewed financial statements, it's quite likely the company overstated its financial position.
Of course, the Department of Justice is not making any moves to charge the companies executives with crimes similar to what Donald Trump was charged with. Could it be that the director of the DOE loan office, Jigar Shah, is biased towards Plug Power? Maybe. He did loan Plug Power $100 million through his investment firm, Generate Capital prior to taking the position at the DOE.
Overstating their financial position, which would allow them to obtain the loan seems to be an act of fraud. According to several articles, CEO Andrew marsh and other members of the executive team have donated to quite a few high-level politicians, mostly on the democrat side of the aisle. But I'm sure that has nothing to do with the way his company is being favorably treated.
To be fair, Plug Power repaid the $100 million loan at a 9% interest rate three years early. However, this also appeared to be one of the reasons their cash flow problems worsened.
The double standard just highlights the failure of our government to fulfill one of their most important obligations. The equal treatment of all under the law. Even though most of us are not surprised, it's still disappointing.