|The neutrality of this article is disputed. (June 2012)|
The Solyndra loan controversy is a political controversy involving U.S. President Barack Obama's administration's authorization of a $535 million loan guarantee to Solyndra Corporation in 2009 as part of a program to spur alternative energy growth. In early September 2011 the company ceased all business activity, filed for Chapter 11 bankruptcy, and laid off nearly all of its employees. The treasury is not expected to recover much of the money. 
Critics claimed that the Obama administration had unduly influenced awarding the loan guarantee. Others have noted that the Solyndra loan guarantee process was a multi-year process begun during the George W. Bush Administration.
Background before the loan approval
In May 2005, Chris Gronet founded Gronet Technologies and changed its name to Solyndra eight months later. It was founded to provide an alternative to silicon-based solar panels amidst a worldwide shortage. On July 29, 2005 the United States Congress passed the Energy Policy Act of 2005, a bill intended to address a variety of developing energy problems in the United States. The bill was signed into law by George W. Bush on August 8, 2005. Amongst other things, the bill authorized the Department of Energy to offer loan guarantees to help finance promising energy projects. Advertising of this program in August 2006 resulted in the Department of Energy receiving 134 preliminary applications for the program, including one from the Fremont, California-based Solyndra Corporation in order to build a new manufacturing facility "Fab 2" for its unique solar panel technology.
In October 2007, the Department of Energy had completed vetting of the applications and had narrowed the number it was still considering to 16, one of which was the application from Solyndra. The remaining 16 were invited to submit full applications for the program, and Solyndra did so in May 2008. On January 9, 2009, the Department of Energy's credit committee decided unanimously that although the project "appears to have merit, there are several areas where the information presented did not thoroughly support a finding that the project is ready to be approved at this time." The committee "without prejudice" remanded the project "for further development of information."
After President Obama took office, analysts in the Energy Department and in the Office of Management and Budget questioned the loan, as one Energy official wrote in an e-mail of "a major outstanding issue": cash flow predictions showed that the Fab 2 subsidiary (the entity receiving the loan guarantee) would be low on cash in September 2011, possibly needing help from the parent company until the cash flow recovered in subsequent months.
In March 2009, after a successful milestone in the approval process, the White House wanted to announce the loan guarantee. One White House budget analyst nixed the announcement in a March 10, 2009 e-mail, writing "This deal is NOT ready for prime time" and listing remaining milestones.
On March 20, 2009, the Department of Energy committee that had remanded the loan application in January made a "conditional commitment" to Solyndra's proposed $535 million loan guarantee, with final approval scheduled for September. The White House and Solyndra had estimated that the loan would help to create 4,000 new jobs.
In August 2009, an Energy Department stimulus adviser, Steve Spinner, pushed for a quicker final decision on the loan, though he had recused himself from the approval decision itself because his wife's law firm had done work for the company. According to the Washington Post, the Obama administration tried to rush federal reviewers to approve the loan so Vice President Joe Biden could announce it at a September 2009 groundbreaking for the company’s factory.
The White House scheduled a press event for September 4 and federal reviewers gave final approval on September 2. After securing the loan guarantee, the Federal Financing Bank, a part of the Department of the Treasury, loaned Solyndra the money on September 4, 2009. Solyndra used the loaned funds to build a new manufacturing facility, Fab 2, in Fremont, California. Construction began in September 2009 and was completed in June 2010. In May 2010, the company was promoted by President Obama in his visit as a model for government investment in green technology. It was also visited by Energy Secretary Steven Chu.
In February, 2011, Solyndra restructured its loans with government approval, in an attempt to keep the company afloat. Two funds (Argonaut Ventures LLP and Madrone Partners LP) invested an additional $69 million as part of the restructuring, and Solyndra's debt to the government was subordinated to this new investment. Assistant Treasury Secretary Mary Miller wrote emails at the time stating that this subordination might be illegal, and should be cleared with the Justice Department first, but Energy Department officials proceeded based on an internal legal opinion by the loan program's lawyers.
On October 14, 2011 two senior Treasury officials said that they had never seen a loan restructuring like Solyndra, stating the half-billion dollar loan to Solyndra Inc. was restructured so that private investors moved ahead of taxpayers for repayment. Democrats criticized Republicans for not allowing the Energy Department to testify and for blocking the release of an Energy Department memo that outlined the legal basis for its decision to restructure the loan to Solyndra.
On August 31, 2011 Solyndra announced it was filing for Chapter 11 bankruptcy protection, laying off approximately 1100 employees, and shutting down all operations and manufacturing. Approximately 100 employees were kept on, for periods ranging from a week or two to several months or more. These employees were involved in filing the bankruptcy paperwork, continuing to ship product to fulfill existing orders, plant security, and related winding-up tasks.
After the bankruptcy, the New York Times reported that government auditors and industry analysts had faulted the Obama administration for failing to properly evaluate the company's business proposals, as well as for failing to take note of troubling signs which were already evident. In addition, Frank Rusco, a program director at the Government Accountability Office, had found that the preliminary loan approval had been granted before officials had completed the legally mandated evaluations of the company.
In addition, according to the Washington Post, the Obama administration continued to allow Solyndra to receive taxpayer money even after it had defaulted on its $535 million loan. Department of Energy spokesman Damien LaVera said, “Ultimately, the choice was between imminent liquidation or giving the company and its workers a fighting chance to succeed.”
The House Energy and Commerce Committee has been investigating the Solyndra loan. A law enforcement official confirmed that the criminal probe of Solyndra is focused on whether the company and its officers misrepresented the firm’s finances to the government in seeking the loan.
The Energy Department's chief lending officer testifed before the Energy and Commerce Committee: "[b]y the time the Obama administration took office in late January 2009, the loan programs' staff had already established a goal of, and timeline for, issuing the company a conditional loan guarantee commitment in March 2009." However Republicans on the panel dispute that version of events, citing Energy Dept. e-mails saying that two weeks before Obama took office a panel had decided to postpone the loan.
The Washington Post reported that Solyndra had used some of the loan money to purchase new equipment which it never used, and then sold that new equipment, still in its plastic wrap, for pennies on the dollar. Former Solyndra engineer Lindsey Eastburn told the Washington Post, "After we got the loan guarantee, they were just spending money left and right... Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy."
Relationships with the Obama administration
The New York Times quoted Shyam Mehta, a senior analyst at GTM Research, as saying "There was just too much misplaced zeal at the Department of Energy for this company." Among 143 companies that had expressed an interest in getting a loan guarantee, Solyndra was the first one to get approval and received the largest loan.
The company reportedly spent nearly $1.8 million on lobbying during the period the loan guarantee was under review. Tim Harris, the CEO of Solopower, a different solar panel company which had obtained a $197 million loan guarantee, told the New York Times that his company had never considered spending any money on lobbying, and that "It was made clear to us early in the process that that was clearly verboten... We were told that it was not only not helpful but it was not acceptable."
George Kaiser was a $50,000 - $100,000 contribution bundler for the Obama campaign in 2008. The George Kaiser Family Foundation, held about 36.7 percent of Solyndra. Kaiser’s focus on Solyndra was striking, because he had no official role at the company and had no personal investment in the corporation. Kaiser made 16 visits to the president’s aides since 2009, according to White House visitor logs but denies having lobbied for Solyndra. E-mails showed that a year after the loan was granted, in October 2010, Kaiser expressed his concern to the president about China's subsidies for its solar panel companies, but avoided lobbying directly for the company. The emails also offered no evidence that would support Republican allegations that politics influenced the Department of Energy's decision to give Solyndra a $535 million loan guarantee.
In December 2011, The Washington Post published an in-depth examination of Solyndra and the Obama green technology program. The Post concluded that though politics was much discussed, it did not play a key role in the decision making process. The Post concluded that officials sometimes disregarded warnings that the financial concerns of the companies in question could damage the credibility of the program. It also showed that administration officials were quite concerned about potential political repercussions of Solyndra's financial difficulties and influenced Solyndra to delay layoffs until after the 2010 election. However, neither the Post report nor a batch of e-mails released by the Energy and Commerce Committee in November, 2011, document that politics influenced the original decision to grant Solyndra a loan.
In September 2011, the U.S. Treasury Department and the FBI launched investigations, searching the computers and files of the company's founder Chris Gronet and CEO Brian Harrison   On October 13, 2011, Harrison resigned and Solyndra asked a Federal court to allow a bankruptcy expert to take control of the company.
In May 2012, the Obama Department of Commerce imposed steep tariffs on Chinese made solar panels, claiming their manufactures received massive amounts of help from the Chinese government and dumped large quantities of cheap panels on US markets, crippling US manufactures.
- ↑ 1.0 1.1 Solar Energy Company Touted By Obama Goes Bankrupt, ABC News, August 31, 2011
- ↑ Obama's Crony Capitalism, Reason, September 9, 2011
- ↑ McGrew, Scott (September 2, 2011). "Solyndra to Declare Bankruptcy". NBC News. http://www.nbcbayarea.com/news/local/Solyndra-Shutting-Down-128802718.html.
- ↑ Solyndra files for bankruptcy, looks for buyer. Bloomberg Businessweek. Retrieved: September 20, 2011.
- ↑ title=Chu: Taxpayers Unlikely to Recover Much From Solyndra Loan
- ↑ 6.0 6.1 Obama fundraiser linked to loan program that aided Solyndra, Los Angeles Times, September 16, 2011
- ↑ 7.0 7.1 Solyndra Spent Liberally to Woo Lawmakers Until the End, Records Show, New York Times, September 16, 2011
- ↑ Exclusive Timeline: Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story. Think Progress (September 9, 2011).
- ↑ "The Solyndra Scandal: Full Of Sound And Fury, Signifying Nothing". The Huffington Post. September 21, 2011. http://www.huffingtonpost.com/tom-zeller-jr/solyndra-scandal_b_973990.html.
- ↑ David R., Baker; Carolyn Said (2011-09-18). "Solyndra: Energy superstar's rapid rise and fall". The San Francisco Chronicle. http://articles.sfgate.com/2011-09-18/business/30171097_1_solyndra-loan-guarantee-chris-gronet. Retrieved 2011-10-09.
- ↑ Solyndra Fab 2, LLC: Credit Committee Recommendation.
- ↑ United States House of Representatives Committee on Energy and Commerce (September 12, 2011). Background Memo.
- ↑ Solyndra Facts vs. Fiction: Cash Flow Modeling. Key Facts: Solyndra Solar. Department of Energy. Retrieved on November 15, 2011.
- ↑ Documents Entered into Record. US House of Representatives, Committee on Energy and Commerce. Retrieved on 2011-11-15. “DOE is trying to deliver the first loan guarantee within 60 days from inauguration (the prior administration could not get it done in four years). This deal is NOT ready for prime time. This loan guarantee will NOT be delivered or approved by any of these actions by March 19.”
- ↑ Mosk, Matthew; Brian Ross & Ronnie Greene (2011-09-13). Emails: Obama White House Monitored Huge Loan to 'Connected' Firm. ABC News. Retrieved on 2011-10-16.
- ↑ Obama Administration Offers $535 Million Loan Guarantee to Solyndra, Inc. Energy.gov (2009-03-20). Retrieved on 2011-09-02.
- ↑ What The Press Is Getting Wrong About Solyndra, Media Matters, September 19, 2011.
- ↑ 18.0 18.1  Solyndra loan deal: Warning about legality came from within Obama administration], Washington Post, October 7, 2011
- ↑ Solyndra loan: White House pressed on review of solar company now under investigation, Washington Post, September 13, 2011
- ↑ Carol D. Leonnig and Joe Stephens, Solyndra employees: Company suffered from mismanagement, heavy spending Washington Post September 22, 2011
- ↑ Vice President Biden Announces Finalized $535 Million Loan Guarantee for Solyndra. Energy.gov (2009-09-04). Retrieved on 2011-09-07.
- ↑ Rudolph & Sletten Construction. Solyndra Fab 2. Retrieved on October 7, 2011.
- ↑ "FBI raids solar firm Solyndra". The Oregonian. The Associated Press. September 8, 2011. http://www.oregonlive.com/business/index.ssf/2011/09/fbi_raids_solar_firm_solyndra.html.
- ↑ Solyndra files for bankruptcy, looks for buyer. Bloomberg Businessweek. Retrieved: September 16, 2011.
- ↑ Treasury officials: Never saw a loan like Solyndra
- ↑ McGrew, Scott. Solyndra to Declare Bankruptcy. NBC Bay Area. Retrieved on 2011-09-02.
- ↑ 27.0 27.1 27.2 In Rush to Assist a Solar Company, U.S. Missed Signs, New York Times, September 22, 2011
- ↑ Chu takes responsibility for a loan deal that put more taxpayer money at risk in Solyndra, Washington Post, September 29, 2011
- ↑ 29.0 29.1 MOSK, MATTHEW; ROSS, BRIAN. "Solyndra: Blame It On Bush, Say Obama Officials". ABC News. http://abcnews.go.com/Blotter/solyndra-blame-bush-obama-officials/story?id=14513389. Retrieved 2011-09-15.
- ↑ Solyndra employees: Company suffered from mismanagement, heavy spending, Washington Post, September 20, 2011
- ↑ Anburajan, Aswini (March 28, 2008). Fact check: Obama and oil. First Read on MSNBC.com.
- ↑ 32.0 32.1 Snyder, Jim (September 12, 2011). "Obama Team Backed $535 Million Solyndra Aid as Auditor Warned on Finances". Bloomberg. http://www.bloomberg.com/news/2011-09-12/obama-team-backed-535-million-solyndra-aid-as-auditor-warned-on-finances.html. Retrieved October 28, 2011.
- ↑ 33.0 33.1 33.2 Tracy, Ryan; Solomon, Deborah (November 10, 2011). "Solyndra Supporter Spoke to President". Wall Street Journal. http://online.wsj.com/article/SB10001424052970203537304577028432440510796.html. Retrieved November 15, 2011.
- ↑ 34.0 34.1 Stephens, Joe; Leonnig, Carol D. (December 25, 2011). "The Solyndra Scandal: Politics Infused Obama Energy Programs". The Washington Post. http://www.washingtonpost.com/solyndra-politics-infused-obama-energy-programs/2011/12/14/gIQA4HllHP_story.html?hpid=z1. Retrieved 2012-01-25.
- ↑ Feds Visit Homes of Solyndra CEO, Execs, ABC News, September 8, 2011
- ↑ Solyndra Loan: Now Treasury Dept. Is Launching Investigation, ABC News, September 8, 2011
- ↑ The Solyndra Scandal: The FBI raids a beneficiary of federal loan guarantees, The Wall Street Journal, September 9, 2011
- ↑ Tracy, Ryan (October 13, 2011). "Solyndra CEO Resigns". The Wall Street Journal. http://online.wsj.com/article/SB10001424052970204002304576629132349965402.html.
- ↑ US Slaps High Tariffs on Chinese Solar Panels, New York Times, May 17, 2012, by Keith Brandsher and Diane Cardwell
- Jon Stewart criticizes Obama White House On Solyndra, (with video from The Daily Show), NPR, September 16, 2011
- Obama's Solyndra scandal reeks of the Chicago Way, by John Kass, Chicago Tribune, September 18, 2011
- Remarks by the President on the Economy, Transcript of speech by President Obama at Solyndra on May 26, 2010, whitehouse.gov
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