Solyndra loan: White House pressed on review of solar company now under investigation

Solyndra loan: White House pressed on review of solar
company now under investigation

and Carol D. Leonnig, Published: September 13

EXCLUSIVE | The Obama White House tried to rush federal reviewers for a
decision on a nearly half-billion-dollar loan to the solar-panel manufacturer
Solyndra so Vice President Biden could announce the approval at a September 2009
groundbreaking for the company’s factory, newly obtained e-mails show.

The Silicon Valley company, a centerpiece in President Obama’s initiative to
develop clean energy technologies, had been tentatively approved for the loan by
the Energy Department but was awaiting a final financial review by the Office of
Management and Budget.

The August 2009 e-mails, released exclusively to The Washington Post,
show White House officials repeatedly asking OMB reviewers when they would be
able to decide on the federal loan and noting a looming press event at which
they planned to announce the deal. In response, OMB officials expressed concern
that they were being rushed to approve the company’s project without adequate
time to assess the risk to taxpayers, according to information provided by
Republican congressional investigators.

Solyndra collapsed
two weeks ago, leaving taxpayers liable for the $535 million loan.

One e-mail from an OMB official referred to “the time pressure we are under
to sign-off on Solyndra.” Another complained, “There isn’t time to negotiate.”

“We have ended up with a situation of having to do rushed approvals on a
couple of occasions (and we are worried about Solyndra at the end of the week),”
one official wrote. That Aug. 31, 2009, message, written by a senior OMB staffer
and sent to Terrell P. McSweeny, Biden’s domestic policy adviser, concluded, “We
would prefer to have sufficient time to do our due diligence reviews.”

White House officials said Tuesday that no one in the administration tried to
influence the OMB decision on the loan. They stressed that the e-mails show only
that the administration had a “quite active interest” in the timing of OMB’s

“There was interest in when a decision would be made because of its impact on
whether an event involving the vice president could be scheduled for a
particular date or not, but the loan guarantee decision was merit-based and made
by career staffers at DOE,” White House spokesman Eric Schultz said.

Solyndra spokesman David Miller said he was unaware of any direct involvement
of the White House in securing or accelerating the loan.

The e-mail exchanges could intensify questions about whether the
administration was playing favorites and made costly errors while choosing the
first recipient of a loan guarantee under its stimulus program. Solyndra’s
biggest investors were funds operated on behalf of the family foundation of
Tulsa billionaire and Obama fundraiser George Kaiser. Although he has been a
frequent White House visitor, Kaiser has said he did not use political influence
to win approval of the loan.

The White House has previously said that it had no involvement in the
Solyndra loan application and that all decisions were made by career officials
based on the merits of the company.

It is not clear from the e-mails whether the White House
influenced a final decision to approve the loan guarantee.

The Sept. 4, 2009, groundbreaking event went ahead as scheduled, with Energy
Secretary Steven Chu in attendance and Biden speaking to the gathering by
satellite feed.

Republican investigators for the House Energy and Commerce Committee, which
is holding a hearing about Solyndra on Wednesday, concluded that the White House
set a closing date for the OMB approval even before the OMB review had begun.

The White House pressure may have had a “tangible impact” on the OMB’s risk
assessment of the loan, the congressional investigators concluded.

In one e-mail, an OMB staff member questioned whether the review team was
using the best model for determining the financial risk to taxpayers in
evaluating the Solyndra deal.

“Given the time pressure we are under to sign-off on Solyndra, we don’t have
time to change the model,” the staffer wrote.

Solyndra was a favorite of the administration until two weeks ago, when the
company abruptly shuttered its factory and filed for bankruptcy court
protection, leaving 1,100 people out of work and taxpayers on the hook for the
loans. Last week, FBI agents searched the company’s Silicon Valley headquarters
in a raid
that Miller said appeared linked to the loan guarantee.

In one e-mail, an assistant to Rahm Emanuel, then White House chief of staff,
wrote on Aug. 31, 2009, to OMB about the upcoming Biden announcement on Solyndra
and asked whether “there is anything we can help speed along on OMB side.”

An OMB staff member responded: “I would prefer that this announcement be
postponed. . . . This is the first loan guarantee and we should
have full review with all hands on deck to make sure we get it right.”

In another message, a White House staff member wrote that officials were
“walking a fine line with Solyndra needing to begin notifying investors to fly
in” for the groundbreaking. It stressed that “this OMB piece” of the review was
not final and pointed out that if word of the groundbreaking leaked to the
public prematurely, that would “leave us in an awkward place.”

The e-mails also raise questions about whether the administration should have
foreseen financial trouble. In August 2009, e-mail exchanges between Energy
Department staff members pointed out that a credit-rating agency predicted that
the project would run out of cash in September 2011. Solyndra shut its doors on
the final day of August.

The House committee has been investigating Solyndra’s dealings with the
Energy Department for six months. In July , subcommittee members subpoenaed
White House documents related to the guarantee.

Questions about the selection process were first raised in a July 2010 audit
by the Government Accountability Office. It concluded that the Energy Department
“lacked appropriate tools for assessing the progress” of the loan program and
that the department treated applicants inconsistently, “favoring some applicants
and disadvantaging others.”

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep.
Cliff Stearns (R-Fla.), chairman of that panel’s oversight and investigations
subcommittee, said last week that the FBI raid confirmed their belief that the
“darling” of Obama’s green-jobs program was a “bad bet” from the beginning.

“Solyndra was the hallmark of the President’s green jobs program and widely
promoted by the administration as a stimulus success story, right up until its
bankruptcy and FBI raid,” Upton and Stearns said in a
on Tuesday. “Let’s learn the lessons of Solyndra before another
dollar goes out the door.”

Rep. Henry A. Waxman (Calif.) and Rep. Diana DeGette (Colo.) — Democrats on
the committee who had once defended the choice of Solyndra — last week also
questioned whether they had been misled. In a letter,
they wrote
that Solyndra chief executive Brian Harrison “did not convey to
us the perilous condition of the company, and the Committee should know why. ”

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: