Congressman says goal for $535 million was photo-op

Congressman says goal for $535 million was photo-op

‘I see no reason for the taxpayers to have any confidence funds could be  spent wisely’


Posted: September 14, 2011
8:35 pm Eastern

By Bob  Unruh
© 2011 WND

 

Solyndra  project in France

A member of Congress today essentially accused Barack Obama of rushing more  than half a billion dollars out the government’s door and into the account of a  private company that later collapsed into bankruptcy in order to set up a  favorable photo-op for the administration.

“The review process took a back seat to the need to set up a photo-op for the  vice president and other administration officials,” Rep.  Cliff Stearns, R-Fla., said today after a hearing into the more than half a  billion dollars in federal loan guarantees granted to the  California-based Solyndra, which had some major Obama supporters as private  investors.

His statement on the hearing found that the “Obama administration rushed to  get money out the door for political photo-ops.”

See  the nation’s new state of affairs, in “Gangster Government: Barack Obama and the  New Washington Thugocracy.

That’s even though witnesses today from the administration all claimed that  due diligence was applied to the decision-making process that addressed the $535  million, and they are stumped as to what eventually went wrong.

Stearns, the chairman of the House Energy and Commerce Committee’s  subcommittee on Oversight and Investigations, made clear the issue is far from  over.

(Story continues below)

“Solyndra was the first loan guarantee issued by the Obama administration  using stimulus dollars and administration officials held out the company as a  glowing example of how stimulus dollars were creating jobs – now 1,100 Solyndra  workers are out of work, the firm is bankrupt and raided by the FBI, and  taxpayers are likely out $535 million,” he said.

“I look forward to hearing from the Solyndra executives at our hearing next  week,” he said.

The company, which made “innovative cylindrical solar systems for commercial  rooftops,” announced at the end of August that it was suspending operations and  firing 1,100 fulltime and temporary employees.

It said it could not achieve “full-scale operations rapidly enough to compete  in the near term with the resources of larger foreign manufacturers. This  competitive challenge was exacerbated by a global oversupply of solar panels and  a severe compression of prices that in part resulted from uncertainty in  governmental incentive programs in Europe and the decline in credit markets that  finance solar systems.”

CEO Brian Harrison was quoted in the company announcement at the time saying,  “We are incredibly proud of our employees, and we would like to thank our  investors, channel partners, customers and suppliers, for the years of support  that allowed us to bring our innovative technology to market. Distributed  rooftop solar power makes sense, and our customers clearly recognize the  advantages of Solyndra systems.”

However, the half a billion dollars lost by taxpayers wasn’t mentioned.  Stearns’ spokesman said that’s where the investigation has to begin, with just  exactly what was paid to or on behalf of the company, by whom, and for what  purpose, officials said.

At today’s hearing, Jeffrey Zients, deputy director of the Office of  Management and Budget, and Jonathan Silver, a manager in the Department of  Energy Loans Program Office, claimed “all due diligence” was used in approving  the loan, even though some analysts were warning about the company’s future  already at that point in 2009.

Then the administration restructured the loan and put the security of private  investors ahead of taxpayers – an apparent violation of federal law as well as  the intent of Congress – in order to attract more outside investors, the report  from Stearns office confirmed.

According to Zients, “DOE ultimately provided information and analysis to OMB  to show that the loan was in imminent default, and that the restructuring  proposal was expected to be less costly to taxpayers than other options,  including liquidation.”

But another attempt to restructure in just the past few weeks was rejected,  and the company turned itself into a vacant warehouse, after apparently “burning  through” the $535 million in about two years.

“It is clear that in a rush to spend $8 billion in stimulus funds for this  loan guarantee program, this administration failed to review properly Solyndra’s  viability in the global market, which is very disconcerting given that $10  billion remains to be spent by the administration before the end of this month,”  said Stearns.

“I see no reason for the taxpayers to have any confidence that these funds  could be spent wisely and it should be returned to the [U.S.] Treasury to reduce  our debt,” he said.

During the hearing, members of Congress pointed to internal emails suggesting  that there was a strategy in place to rush the loan approval in order to meet  the schedule timeframe for a photo-op for the administration.

One such note said, “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). … We would prefer to have sufficient time to do our due diligence  reviews and have the approval set the date for the announcement rather than the  other way around.”

However, White House spokesman Jay Carney dismissed such concerns, explaining  the request for an approval date was only for “scheduling.”

Solyndra had been hailed by Obama as an innovative company that would use  taxpayer money to hire workers. Instead, it fired most of its 1,100 employees  Aug. 31 when it shut down.

Just days later, agents with the FBI and Energy Department’s inspector  general inspected the company headquarters for records that might provide the  basis for further investigation or charges.

Stearns had pointed out that the record reveals “numerous red flags”

A  commentary from Bruce Krasting at Business Insider said it was of special  interest that no witnesses so far have been scheduled for the main owner of the  company, Argonaut Ventures, a family investment vehicle for George Kaiser, a  major Obama supporter.

“George Kaiser could step up in a bankruptcy court and offer to put $300  [million] into S. The proceeds would be used to substantially pay down the  government IOU. The balance of the debt would be converted into common stock. If  S were around in 5-7 years, the government might get the rest of its money  back,” he suggested. “That’s my challenge to George Kaiser. Step up and fix this  problem.”

A commentary  that appeared in the Salt Lake Tribune noted that when Obama was promoting  renewable energy projects, and working to grant money for the work, he visited  the California company and stated, “The future is here.”

But the commentary noted that by now, FBI agents have visited the company’s  offices, and have taken what they want. They also have visited officials’ homes  for related reasons.

“Obviously, everyone should reserve judgment as to whether there has been any  wrongdoing, criminal or otherwise. But it’s not too early to draw some policy  lessons from Solyndra’s ignominious downfall,” the commentary said. “The first  is that government is no better than the private sector at picking industrial  winners – and usually worse. Solyndra’s novel solar-panel design was supposed to  produce electricity more efficiently than more traditional panels, offsetting  its higher production costs. Many private analysts questioned that business  model, especially given modest global demand for solar power and competition  from China’s heavily subsidized producers. But the Energy Department swiftly  approved Solyndra’s loan guarantee anyway. The department has also placed large  financial bets on electric vehicles and related battery technology, despite  private forecasts that the market for that technology is not ripe.”

In response to a request from from  the Wall Street Journal, FBI spokeswoman Julianne H. Sohn declined to  comment on much of what is going on.

But the report said two of the company’s founders were taken off the payroll  just last year because the company “was burning through cash and had to rein in  costs.”

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