Next Enron Scandal? White House Pushed Loan for Solar Company Lobbyists
Using records reported by Opensecrets.org, The Christian Post calculates that bankrupt solar manufacturer Solyndra spent nearly $1.1 million on Washington lobbying since 2008. That includes 2009, when critics say the White House pressured the Office of Management and Budget (OMB) to cut short due diligence on a federal loan guarantee of more than $500 million for the Calif.-based company.
The White House may even have known about repeated predictions that the company would go bankrupt.
The bulk of the lobbying money was spent in 2010. In May of last year, President Obama visited the Solyndra plant after it opened and touted it as a model for how government and private sector collaboration can bring about "green energy" jobs. Just two months earlier, however, auditors from PricewaterhouseCoopers LLP had warned that the company was in jeopardy and could go bankrupt.
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Emails obtained by The Washington Post show that the White House wanted Solyndra's loan guarantee to be approved before its September 2009 groundbreaking so that Vice President Joe Biden could attend the ceremony and announce the loan guarantee. The administration wanted to tout the taxpayer-backed loan guarantee as part of its effort to create more "green energy jobs."
The House Energy and Commerce Subcommittee on Oversight and Investigations on Wednesday held a hearing today on the matter. Solyndra executives were initially scheduled to appear, but have now rescheduled due to an FBI investigation and will appear next Monday. Instead, the subcommittee heard from officials from the OMB and DOE.
One of Solyndra's largest private investors was Oklahoma billionaire and top-tier Obama fundraiser George Kaiser, who has been a frequent White House visitor. Kaiser denies playing any role in securing the loan.
President Obama was in North Carolina today promoting his "Americans Jobs Act," which is similar to the 2009 stimulus bill, but conspicuously missing mention of "green energy" jobs or government stimulus for them.
The loan guarantee program is housed in the Department of Energy and is part of the 2009 stimulus bill, or the American Recovery and Investment Act, which was intended to help the United States' economy avoid a recession. OMB had the responsibility to review the loan applications and make recommendations to the DOE.
In response to White House requests in August 2009, OMB officials expressed concern that they were being rushed and did not have enough time to assess the loan risks.
"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," a senior OMB staffer wrote to Terrell P. McSweeny, Biden's domestic policy adviser, on Aug. 31, 2009, according to The Washington Post.
One of the emails shows an OMB staffer raising concerns about the model being used to assess the loan's risk. In response to the concerns, another OMB staffer said that there was not enough time to change the model due to the "time pressure" they were under to sign off on the loan.
In another email, a Department of Energy staffer informed the White House that a credit rating agency predicted that Solyndra would go bankrupt by September 2011. Solyndra went bankrupt on Aug. 31 of this year. Depending on the outcome of the bankruptcy proceedings, the DOE - and, by extension, American taxpayers - may get some of the loan money back.
The OMB gave its approval for the $535 million loan on Sept. 1, 2009. Just a few days later, on Sept. 4, Secretary of Energy Steven Chu and former Calif. Gov. Arnold Schwarzenegger appeared at the Solyndra groundbreaking ceremony and announced the loan. Biden appeared at the event via satellite.
"Solyndra estimates the new plant will initially create 3,000 construction jobs, and lead to as many as 1,000 jobs once the facility opens," Chu posted to his Facebook wall, along with a photo of him and Schwarzenegger the day of the ceremony.
In a press release from the Office of the Vice President on the same day, Biden said that Chu was committed to "accelerating" and "expediting" loan guarantees to alternative energy companies.
On Thursday, the FBI conducted a surprise raid on Solyndra offices and the home of Solyndra CEO Brian Harrison. FBI agents confiscated documents to investigate the company. The investigation is sealed and the FBI will not say whether or not the loan guarantee is part of the investigation.
Administration officials initially said that no one in the White House was involved in the loan decision. After The Washington Post obtained the emails showing otherwise, White House spokesman Eric Schultz told the paper, "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."
