Solyndra Said to Have Violated Terms of Loan") which included the following passage: "In a March 2011 report, [the Energy Department's inspector general, Gregory Friedman] said his office 'found that the Loan Guarantee Program could not always readily demonstrate, through systematically organized records, including contemporaneous notes, how it resolved or mitigated relevant risks prior to granting loan guarantees.'"
Interesting, isn't it, how the federal government, who readily criticized the investment industry's risk controls and management, was able to grant such a huge loan, shortly before the recipient declared bankruptcy? And while perhaps it may do our hearts good to see that "the shoe is on the other foot," or to feel better because "misery loves company," (sorry for the inclusion of overused cliches), the reality is that the millions of dollars given away belongs to the taxpayers, who lose in the end. And perhaps it's better to use this example as a way to reflect upon our own risk controls to ensure that they're sufficiently tight. While we may not all be in the business of granting loans (although anyone who buys bonds is, of course, doing just that), we all experience risks in our investments. Too many managers have no risk policies at all; surely something can be implemented to demonstrate an awareness of the risks being taken and the controls in place to minimize these risks.