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.
58 thoughts on “White House Warned in 2009 That Solyndra Was Poor Investment”
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The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default,
So when Anonymous Yours suggests, It all depends if the technology was secured by the loan….Lets say this…the US as a creditor will generally have Super Priority especially over other claims in the same status…. and that would certainly seem to be a sound policy, it may not be what actually occurred.
Under terms of the February loan restructuring, two private investors — Argonaut Ventures I LLC and Madrone Partners LP — stand to be repaid before the U.S. government if the solar company is liquidated. The two firms gave the company a total of $69 million in emergency loans. The loans are the only portion of their investments that have repayment priority above the U.S. government.
Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. The foundation is headed by billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama’s 2008 campaign, federal election records show. Kaiser has made at least 16 visits to the president’s aides since 2009, according to White House visitor logs.
Madrone Partners is affiliated with the Walton family, descendants of Wal-Mart founder Sam Walton. Rob Walton, the eldest son of Sam Walton, contributed $2,500 last year to the National Republican Congressional Committee.
Oops wrong link in my comment above, correct link here
Here are five myths about the situation.
I had a friend that I went college with that did underwater welding…He made 75 an hour that was back in the 80s…..Sure, you can get good pay…when there is work…
Now exactly what do you do?
Since China is going to corner the market on solar and since it is going to corner the market on rare earth metals because of environmental regulations, maybe we need to drill for more oil.
Oil does provide good, high paying jobs. A roustabout [a low skilled laborer makes around 48,000 per year. That is on land, I would assume offshore is at least the same and maybe even more.
They are digging deep for this one:
A group with ties to the oil industry has launched a campaign to play up the Solyndra story as a way to discredit the concept of “green jobs” and renewable energy in general.
The group behind the new effort is the Congress of Racial Equality (CORE), which was once a key player in the civil rights movement but in recent decades has become known for embracing right-wing politics and operating at the behest of big corporate funders. Among those is ExxonMobil, which has given money to CORE through its foundation.
The bottom feeders to say the least.
I caught that Ford commercial yesterday,the man wants a company that didn’t seek a government loan to buy a car from,that was an interesting reason for buying a car from Ford.
Wow, 8 postings by Dabuh in 45 minutes regarding alternative energy and global warming. What is it with surf forecasts that make them so distrustful of global warming and alternate energy? 😉
Emails obtained by The Associated Press show that a White House official dismissed reports about Solyndra’s gloomy future. An email from Greg Nelson, a White House official who had been involved in the planning of Obama’s May 2010 trip to Solyndra’s headquarters, to a Solyndra executive downplayed a July 2010 news story in a trade publication that criticized the company’s financial health. “Seems B.S.,” Nelson wrote.
A 2009 report by the Energy Department’s inspector general warned that the DOE lacked the necessary quality control for the loan guarantee program, which was created in 2005 to support clean-energy projects that could not obtain conventional bank loans due to high risks. In July 2010, the Government Accountability Office said the Energy Department had bypassed required steps for funding awards to five of 10 applicants that received conditional loan guarantees.
Emails released Thursday night show that Obama administration privately worried about the effect of a default by Solyndra Inc. on the president’s re-election campaign. “The optics of a Solyndra default will be bad,” an official from the Office of Management and Budget wrote in a Jan. 31 email to a senior OMB official. “The timing will likely coincide with the 2012 campaign season heating up.” The email, released by the House Energy and Commerce Committee as part of its investigation into the Solyndra loan, showed that Obama administration officials were concerned about Solyndra’s financial health even as they publicly declared the solar panel maker in good shape.
“a major outstanding issue” — namely, that Solyndra’s numbers showed it would run out of cash in September 2011.
Obama hoping to cash in on JOBS…decided to go with it anyway
Dem Guys from HAAVAd are some smart people
The results of the Congressional probe shared Tuesday with ABC News show that less than two weeks before President Bush left office, on January 9, 2009, the Energy Department’s credit committee had voted against offering a loan commitment to Solyndra.
Even after Obama took office on Jan. 20, 2009, analysts in the Energy Department and in the Office of Management and Budget were repeatedly questioning the wisdom of the loan. In one exchange, an Energy official wrote of “a major outstanding issue” — namely, that Solyndra’s numbers showed it would run out of cash in September 2011.
So let me get this straight….This was started under Bush….The ball got rolling…Obama hoping to cash in on JOBS…decided to go with it anyway….Seems like….this required Bi-Partisan support to get out the door….But since the events have turned sour…its now Obama’s fault…Sorry can’t buy that…. How many crappy things did Obama get stuck with….Hmmmmm
The Bomb Shell is coming.
Solyndra’s SEC filing contains a surprise
A close look by LA Observed at the company’s SEC filings shows that it also was seeking additional DOE loan guarantees of $469 million for Phase II of its so-called Fab 2 solar power manufacturing facility in Fremont. And, get this, DOE – according to Solyndra’s Dec. 18, 2009 application for SEC approval to sell common stock – tentatively gave this 2nd loan application its approval. Here’s the story right from Solyndra’s own S-1:
“On September 11, 2009, we submitted Part 1 of an application for an approximately $469 million guaranteed loan to be utilized to finance the construction of Phase II. As with the financing facility for Phase I, the loan would be made by the Federal Financing Bank and guaranteed by the DOE. On November 4, 2009, we were notified by the DOE that our Part 1 application was complete and that Phase II was determined to be a Section 1703 eligible project and to have the credit subsidy cost for the project paid out of funds allocated under Section 1705. We submitted Part 2 of our loan guarantee application on November 17, 2009.”
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