OPINION:
The White House’s half-billion-dollar loan to a now-bankrupt solar-energy firm is just the first act in an emerging scandal of insider political influence over a deeply flawed clean energy program.
What has come to light so far as part of a congressional investigation is the administration’s willful order to approve a bad loan, despite dire warnings from a number of federal officials that the Solyndra Corp., a California-based solar panel maker, was in deep financial trouble.
A steady stream of government emails released by a House Energy and Commerce subcommittee tells a sordid tale of a company that President Obama turned into an energy showcase for his $40 billion loan program - until it went bankrupt in August, putting 1,100 employees out of work.
One of the people who promoted Solyndra’s $535 million loan, which now will be paid by federal taxpayers, was Steven J. Spinner, a senior Energy Department adviser, a major fundraiser for Mr. Obama and a Silicon Valley investor who was given the job of guiding the government’s clean-technology investments.
He not only was the one of Solyndra’s unabashedly inside defenders, his wife worked for the California law firm that represented the solar company and helped it file for the government loan her husband was promoting.
While internal concerns were raised about Solyndra’s shaky finances as early as the summer of 2009, Mr. Spinner emailed a top aide to then-White House Chief of Staff Rahm Emanuel that Solyndra was a financially solvent company that fully deserved the administration’s support.
“I haven’t heard anything negative on my side,” he told Mr. Emanuel’s aide in an email about the warnings. “I … have no idea what they’re referring [to].”
As the loan deal stalled after internal criticism of the firm’s looming insolvency, Mr. Spinner grew more impatient. “How [expletive] hard is this?” he wrote to a career Energy Department staffer Aug. 28, 2009, about its delayed clearance from an Office of Management and Budget official. “What is he waiting for? Will we have it by the end of the day?”
But internal complaints from OMB and Treasury about Solyndra’s dubious finances as well as the favorable terms of its loan persisted. That sparked further internal debate about the legality of the loan’s revision, though to no avail.
Dismissing warnings that the government’s restructuring of the loan was illegal and should be reviewed by Justice Department attorneys, Energy officials moved ahead with changes in February that required Solyndra’s investors be repaid before taxpayers if the company defaulted on its debt.
Other emails released by the House panel last month reveal a politically pressured program that was heavily influenced by powerful special interests that had a stake in its outcome.
“In an administration that said it would curtail lobbyists’ influence, the documents show ardent lobbying by political appointees inside the agencies and significant White House access given to venture capitalists with a major stake in the $40 billion stimulus investment program for clean energy,” The Washington Post reported last month.
One of these venture investors was David Prend, whose company, Rockport Capital, was a Solyndra backer. He met with White House officials about the deal in March of 2009.
“It was great to meet you with [then-White House climate adviser] Carol Browner last week,” Mr. Prend wrote. “I look forward to working with you to get the message out and to effect real change in the Energy Industry. I will follow up shortly on 2 of the companies we discussed,” he said. One of them was Solyndra.
But emails from government officials to Energy officials, who were responsible for reviewing the deal, were growing increasingly critical of Solyndra’s rising debts and declining revenues.
“DOE … has one loan to monitor and they seem completely oblivious to this issue,” an OMB analyst wrote April 2, 2010.
“What’s terrifying is that after looking at some of the other [loan-guarantee projects] that came next, this one [Solyndra] started to look better,” a budget analyst email said.
“Bad days are coming,” another OMB analyst wrote, referring to other shaky companies the Department of Energy was prepared to invest in as part of Mr. Obama’s loan-guarantee program.
As news stories proliferated about Solyndra and the president’s job approval polls sank further last month, Rep. Fred Upton, Michigan Republican and chairman of the House Committee on Energy and Commerce, and Rep. Cliff Stearns, Florida Republican and chairman of its investigating subcommittee, accused the White House of “stonewalling” its demands for further documents about the West Wing’s role in the scandal.
“What is the White House trying to hide from the American public?” they said in a statement last week, warning they will be forced to subpoena the requested documents if they are not forthcoming.
Last week, in an effort to blunt the GOP’s demands, White House Chief of Staff Bill Daley ordered a 60-day review to evaluate the administration’s entire $35 billion loan portfolio. That may be too little, too late. Insiders say that future loans may be in trouble as well.
Meantime, other internal White House emails show there was a growing fear within the Obama administration that Solyndra’s finances were weak when it was given the green light. Indeed, one unusually blunt White House email suggests that the Energy Department was woefully “ill-equipped” to make these kinds of investment decisions.
So hang on to your wallet. Look for more failed loans in the months to come.
Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.
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