Solyndra's woes worried White House, emails show

[XtremeJibber2001]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

[Coydog]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

Ok, now you're reaching.

[madhatter]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

didn;t the bush administration choose to not grant this loan citing solyndra's financial position?

Didn't the obozo administration restructure the loan so that taypayers were no longer teh first to paid off in the event of default?

From the data I've seen, it seems the Obama administration may have been way too eager to extend loans to Solyndra in order to make a big show of the green jobs opportunity.

Ah so being "way too eager to make a big show" of a pet project is jsut fine? Seems that is the problem. making a show vs doing something of value ( or just getting the f*** outta the way.)

yeah nothing to see here just the usual corruption, nothing new. Time for the clown, his cronies and ALL crooked pols to walk the plank.

[JerseyGuy]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

Ok, now you're reaching.

Ah, but that's the whole point, isn't it? A legion of GOPers desperately trying to make this Obama's Watergate?

Since there's (ahem) some deliberate confusion here as to what happened when and why, here's a nice little timeline of actual events, courtesy of Climate Progress, verified by the DoE:

May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics, Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.

July 2005: The Bush administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.

February 2006 - October 2006: In February, Solyndra raises its first round of venture financing, worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.

December 2006: Solyndra applies for a loan guarantee under the 1703 program.

Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush administration DOE moves forward to develop a conditional commitment.

October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the "company's second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location."

November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra's very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.

January 2009: In an effort to show it has done something to support renewable energy, the Bush administration tries to take Solyndra before a DOE credit review committee just one day before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE because it wasn't ready for conditional commitment.

March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE's credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.

June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50 percent.

September 2009: Solyndra raises an additional $219 million. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1703 program. From application to closing, the process took three years -- not the 41 days that is sometimes reported.

January - June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra's ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from investors.

November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month -- on time and on budget -- employing around 3,000 construction workers during the build-out, just as the DOE projected.

February 2011: Due to a liquidity crisis, investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company -- which was a going concern -- for market value, which would have guaranteed significant losses.

March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.): "Despite the administration's urgency and haste to pass the [American Recovery and Reinvestment Act] ... billions of dollars have yet to be spent."

And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Fla.): "The whole point of the Democrats' stimulus bill was to spend billions of dollars ... most of the money still hasn't been spent."

June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50 percent, but analysts worry how the company will compete with the dramatic changes in conventional PV.

August 2011: DOE refuses to restructure the loan a second time.

September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers, and files for bankruptcy. The news is touted as a failure of the Obama administration and the loan guarantee office. However, as of Sept. 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3 percent of DOE's loan portfolio. To date, Solyndra is the only loan that's known to be troubled.

[XtremeJibber2001]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

Ok, now you're reaching.

The old "it's already bleeding so lets just watch it die" mentality?

Since there's (ahem) some deliberate confusion here as to what happened when and why, here's a nice little timeline of actual events, courtesy of Climate Progress, verified by the DoE:

I like it - short and to the point. Four months after the loan is approved the company starts having problems so the DoE starts throwing money at the problem since they're already pot committed. Meanwhile Obama has a visit of the plant in May of 2010 and acts is if all is well and the company is taking off after it's help from the Fed.

And then there's more:

Obama on Solyndra: 'Hindsight Is Always 20/20'

By MATTHEW MOSK and RONNIE GREENE
ABC NEWS and iWATCH NEWS
Oct. 3, 2011

President Obama told ABC News Monday that he does not regret touting the solar company Solyndra as a model of his jobs program, or loaning $535 million in taxpayer money to the company before it declared bankruptcy.

"Hindsight is always 20/20," Obama told ABC Good Morning America anchor George Stephanopoulos in an interview broadcast online Monday. "It went through the regular review process and people felt that it was a good bet."

ABC News asked the president about the Solyndra loan as Congress released White House emails that show a top donor to Obama was in direct contact with one of the president's closest advisers about the federal energy loan program. Steve Westly, a California venture capitalist who raised more than $500,000 for Obama's campaign, exchanged emails with Valerie Jarrett, one of Obama's closest advisers, to warn her about political fallout that could ensue if the president visited the factory being built by Solyndra.

"Could you perhaps check with [the Energy Department] to make sure they're comfortable with the company? I just want to help protect the president from anything that could result in negative or unfair press," Westly said. "If it's too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy."

In May 2010, White House officials began to organize a trip for President Obama to visit the Solyndra factory that ultimately occurred on May 25, 2010.

The emails were released by Democrats on the House Energy and Commerce Committee Monday to emphasize that no government decisions relating to Solyndra were influenced by considerations relating to campaign donations. However, the emails also show for the first time that a major donor had access to top presidential advisers on matters concerning the loan program.

The emails also show deep reservations from analysts at the Office of Management and Budget about the decision to loan $535 million to Solyndra -- reservations that have since been justified. Last month, the California solar power company filed for bankruptcy, and their offices were raided by the FBI. The new documents also show there was vigorous debate inside the White House about the wisdom of making risky investments in clean energy with taxpayer dollars.

The most pointed example of that came during an email exchange between top White House economic advisor Larry Summers and Solyndra investor Brad Jones, of Redpoint Ventures. In December 2009, Summers sought advice from Jones about the administration's economic policy.

Jones reply included a harsh assessment of the Energy Department's loan program.

"The allocation of spending to clean energy is haphazard," he wrote. "The government is just not well equipped to decide which companies should get the money and how much. … One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million; while that is good for us, I can't imagine it's a good way for the government to use taxpayer money."

Summers accepted the critique, saying, "I relate well to your view that [government] is a crappy vc [venture capitalist]…"

The White House was asked about the emails Monday and has not provided comment. Energy Department officials said the emails simply prove that the department engaged in healthy debate about the loan decision before freeing up taxpayer money for Solyndra's use.

"This program was established by Congress to support innovative, cutting-edge projects that by their nature carry a degree of risk," said Damien LaVera, an Energy Department spokesman. "These emails show that the Administration was aware of those risks, and that decisions were based on more than two years of rigorous analysis and due diligence by career officials spanning two administrations. As we have consistently said, there was a thoughtful and appropriate debate within the Administration and decisions were made solely on the merits of the project."

In releasing the emails, House Democrats said they saw a healthy internal debate about the wisdom of investing in the clean energy sector. Obama had embraced the idea, dedicating hundreds of millions of dollars in an effort to help jump start the fledgling "green energy" industry, create jobs, and improve the environment.

A statement from Rep. Henry Waxman, D-Calif., ranking member of the House Energy and Commerce Committee, said the emails show there was "internal disagreement within the Administration about Solyndra's viability and the effectiveness of the loan guarantee program throughout the process."

At the Office of Management and Budget -- where analysts were tasked with assessing the financial risks -- internal emails show deep reservations about lending money to Solyndra.

"Bad days are coming," one email warned in April 2010. OMB officials also seemed concerned with the Department of Energy's apparent failure to monitor the progress at companies that were heavily backed by government loans.

One OMB official wrote: "DOE's 'system' for monitoring loans is quite problematic (barely any review of materials submitted, no synthesis for program management, inherent conflicts in origination team members monitoring the deals they structured, etc) and does not seem to be a program priority."

The emails surrounding the Obama's plans to visit the Solyndra plant offer a rare look behind the scenes at how every move by the president is carefully measured in advance for political benefits and risks. And they show top donors, such as Westly, have the connections and the ability to weigh in on such decisions.

In March, ABC News and The Center for Public Integrity's iWatch News documented how Westly straddled the worlds of big time bundler, venture capitalist for green energy firms -- and White House insider.

In August 2010, Westly was appointed to a high-powered advisory board to Energy Secretary Steven Chu. Before that appointment, four companies in the Westly Group portfolio secured more than a half billion dollars in DOE support. Last month -- as Westly continued to raise money for Obama and advise Chu -- a fifth firm secured DOE backing. Energy Department officials said the loans and grants were awarded on merit.

In the emails, Westly's warnings about the political risks of visiting Solyndra are countered by other considerations.

One White House staffer writes: "POTUS [the President] could meet with workers/make remarks at the new building site, which is very construction/new jobs heavy. 400+ union labor workers in hard hats using heavy machinery both indoors and outdoors."

At the same time, a July 21 e-mail from Solyndra's representatives at the Glover Park Group to staff at the White House Office of Communications pushes a positive message about the company, under the heading "Solyndra Messages," touting the company's "strong future," "growth market," and emphasizing the benefits of solar panels being "Made in the USA."

An unnamed Energy Department official throws in support for the visit, telling the White House, "the company should be strong going into the fall with their new facilities on line."Another Department of Energy official wrote: "Bottom line is that we believe the company is okay in the medium term, but will need some help of one kind or another down the road."

But OMB analysts remained skeptical. One official wrote darkly of the president's plans to appear before Solyndra workers on the factory floor in California: "Hope doesn't default before then."

[Coydog]

I don't care what some magazine says ... an independent accounting firm said the company was in trouble and it was.

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

Ok, now you're reaching.

The old "it's already bleeding so lets just watch it die" mentality?

The loan was restructured as a condition to secure more private investment and the restructuring was approved by the DOE and the OMB. If it makes you feel better, the DOE rejected Solyndra's second request to restructure the load.

But keep digging, something is bound to turn up.

[Coydog]

didn;t the bush administration choose to not grant this loan citing solyndra's financial position?

Hardly, the Bush folks actually pushed to get the load approved just before Obama's inauguration. The DOE remanded it "without prejudice" and conditionally approved the loan in March 2009.

[XtremeJibber2001]

Yeah, 6 months after the loan received final approval.

And after the loan was approved - the Government's hands were effectively tied?

Ok, now you're reaching.

The old "it's already bleeding so lets just watch it die" mentality?

The loan was restructured as a condition to secure more private investment and the restructuring was approved by the DOE and the OMB. If it makes you feel better, the DOE rejected Solyndra's second request to restructure the load.

But keep digging, something is bound to turn up.

You didn't comment to what I posted. Were Obama's hands effectively tied? He did everything he could to stop the bleeding, but just couldn't get the job done? The fact that they declined the second request is after the fact.

I'm not digging - it's right there in the article.

[Coydog]

I'm not sure what you're talking about, but I'm pretty sure Obama was not elected to be the CEO of Solyndra.

[XtremeJibber2001]

I'm not sure what you're talking about, but I'm pretty sure Obama was not elected to be the CEO of Solyndra.

You're telling me a bank (in this case the DoE/Fed) can't change the terms of a loan under any conditions? I wasn't aware that a CEO can change the conditions of a bank loan? On one had it's okay for Obama and his DoE appointment to oversee and monitor the loan, but then neither can do anything when the bleeding starts? Not sure I understand your logic on this one.

[Coydog]

I'm not sure what you're talking about, but I'm pretty sure Obama was not elected to be the CEO of Solyndra.

You're telling me a bank (in this case the DoE/Fed) can't change the terms of a loan under any conditions? I wasn't aware that a CEO can change the conditions of a bank loan? On one had it's okay for Obama and his DoE appointment to oversee and monitor the loan, but then neither can do anything when the bleeding starts? Not sure I understand your logic on this one.

A loan is a contract and the terms are the terms, so no, the lender (or recipient) doesn't get to change terms of a loan downstream because they no longer like them. However, the lender can make a new loan or restructure an existing loan with new terms if accepted by the recipient or refuse to make additional loans to the recipient - precisely what the DOE did in Solyndra's case.

[XtremeJibber2001]

I'm not sure what you're talking about, but I'm pretty sure Obama was not elected to be the CEO of Solyndra.

You're telling me a bank (in this case the DoE/Fed) can't change the terms of a loan under any conditions? I wasn't aware that a CEO can change the conditions of a bank loan? On one had it's okay for Obama and his DoE appointment to oversee and monitor the loan, but then neither can do anything when the bleeding starts? Not sure I understand your logic on this one.

A loan is a contract and the terms are the terms, so no, the lender (or recipient) doesn't get to change terms of a loan downstream because they no longer like them. However, the lender can make a new loan or restructure an existing loan with new terms if accepted by the recipient or refuse to make additional loans to the recipient - precisely what the DOE did in Solyndra's case.

The DoE didn't refuse to make additional loans when the loan was restructured to benefit investors instead of tax payers. What bank would structure a loan which ensures they get burned in a bankruptcy?

I guess what I'm really asking is are you okay with everything that happened around Solyndra?

[Coydog]

In my view, it looks as if the Obama administration pushed the Solyndra loan to help sell the stimulus and promote the idea of home grown green energy jobs. The deal was already in the works and they wanted to take immediate advantage of it. They probably were sloppy in their zeal, though a lot of players were in the mix including very knowledgeable private sector investors.

Despite heated speculation of those on the right, fraud or malfeasance does not appear evident to me. However, I think the particulars surrounding the loan should be investigated impartially without the biased accusations and self serving rhetoric of the GOP. As taxpayers, we have a right to know if anything illegal occurred, but we shouldn’t blindly assume because the deal went south, government corruption necessarily played a role.

[XtremeJibber2001]

In my view, it looks as if the Obama administration pushed the Solyndra loan to help sell the stimulus and promote the idea of home grown green energy jobs. The deal was already in the works and they wanted to take immediate advantage of it. They probably were sloppy in their zeal, though a lot of players were in the mix including very knowledgeable private sector investors.

This is a fancy way of agreeing with me that Obama mislead the American people.

Despite heated speculation of those on the right, fraud or malfeasance does not appear evident to me. However, I think the particulars surrounding the loan should be investigated impartially without the biased accusations and self serving rhetoric of the GOP. As taxpayers, we have a right to know if anything illegal occurred, but we shouldn’t blindly assume because the deal went south, government corruption necessarily played a role.

I think some in the admin were more aware of others how bad Solyndra was, but we'll have to wait and see the final report.

[Coydog]

In my view, it looks as if the Obama administration pushed the Solyndra loan to help sell the stimulus and promote the idea of home grown green energy jobs. The deal was already in the works and they wanted to take immediate advantage of it. They probably were sloppy in their zeal, though a lot of players were in the mix including very knowledgeable private sector investors.

This is a fancy way of agreeing with me that Obama mislead the American people.

No, not at all - but that's what you seem to want to hear.