For the private investors, Fisker was about getting rich while feeling virtuous. For the Obama administration, it was about doing something for green jobs.
The former will be held accountable financially; the latter, politically.
That doesn't make the Fisker debacle a victimless episode or a disaster only in the sense of opportunity cost. State university endowments and charitable foundations had exposure through KPCB investment funds.
The College Illinois fund, a state-run prepaid tuition plan used by 30,000 families, sank $10 million into Fisker. It did so at the urging of Advanced Equities Inc., a Chicago-based firm that Fisker paid to raise private capital after the Energy Department loan.
AEI did not enjoy a sterling reputation. A 2008 Forbes article portrayed it as an oft-sued operation, notorious for foisting dubious venture capital deals on its clientele. An anonymous ex-employee called it "a bucket shop."
Advanced Equities Inc. eventually raised more than half of Fisker's private capital.
"They are good at what they do," Fisker board member (and KPCB partner) Ray Lane, no relation, told the Wall Street Journal. (Through a spokeswoman, Lane declined a request for an interview.)
San Diego businessman Daniel Wray typifies the investors the equities firm pulled in. He spent $210,000 on preferred shares prior to January 2012 — when AEI told him that his stake would be downgraded to common stock unless he ponied up $84,000 more within a week.
Wray is suing, claiming that AEI took him by surprise —- though it must be said that such "pay to play" gambits are not unprecedented in the venture capital biz, especially in "late-stage" start-ups desperate for cash, as Fisker was in early 2012.
Last September, Advanced Equities paid the Securities and Exchange Commission $1 million to settle fraud charges related to its fundraising for another KPCB-backed green start-up, Bloom Energy.
Allegedly, one of AEI's top officials told would-be investors that the CIA had ordered $2 billion of its fuel cells, which it hadn't. Advanced Equities shut down last year.
Government can efficiently affect energy usage through fuel taxes and basic research. When it intervenes on behalf of specific technologies and specific companies, however, bad things happen — resource misallocation, windfall-seeking — even, sometimes, corruption.
The Fisker debacle proves once again that, in the immortal words of former White House economist Larry Summers, "government is a crappy VC."
Charles Lane is a member of The Washington Post's editorial board.