For about a week, I have been hesitant to post on the Solyndra scandal. There seemed to be a bit of too much of a pile on due to this being a green tech company. However, it is now serious and new evidence suggests that the White House was not just cavalier with such stimulus funds but willfully blind that this company (run by a major Democratic donor who visited the White House repeatedly before the public support by the President) was likely to fail. At best it was a remarkably moronic move by the President and his staff.
Evidence disclosed by the House shows that the bankrupt solar company was well-known to be poorly structured and unlikely to survive. Indeed, one government review predicted that the company would run out of cash in September 2011. The company failed on Sept. 6th.
That was long before the company was made the President’s poster child for federal support in September 2009. After receiving $527 million in federal funds over two years, the company filed for bankruptcy.
While the Bush administration set the loan guarantee program in motion, it was the Obama Administration that ignored various warnings and selected the company for a massive media campaign by both Obama and Biden — the latter praising the “permanent jobs” created by the loan.
A DOE staff on August 20, 2009, obtained noted “The issue of working capital remains unresolved… the issue is cash balances, not cost. [Solyndra] seems to agree that the model runs out of cash in Sept. 2011 even in the base case without any stress.”
One email disclosed today warned:
“The optics of a Solyndra default will be bad,” the Office of Management and Budget staff member wrote Jan. 31 in an e-mail to a co-worker. “If Solyndra defaults down the road, the optics will be arguably worse later than they would be today. . . . In addition, the timing will likely coincide with the 2012 campaign season heating up.”
Another e-mail warned that “this deal is NOT ready for prime time.”
That did not stop the Obama White House from going primetime with both the President and Vice President. It is the type of calculation that made Las Vegas what it is today. Faced with warnings of a losing hand, the Obama Administration doubled down.
It is not the sheer waste of hundreds of millions in federal funds but the sheer stupidity of this move that has shocked many folks. The fact that a campaign donor was pushing these loans and repeatedly meeting with top staffers does not help the optics — particularly during a month when the White House has been accused by a general of pressuring him to support the business project of another major donor.
The fact is that the Republicans are justified in pursuing this controversy — an opportunity, if not a gift, given to the GOP by this White House.