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.”
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.
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“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.”