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”
Yes mame…I know….For a lot of folk…a thousand dollars is a lot of money….and 50 can make or break whether they eat or not…
I would like to have just the bank exchange rate on 500 million for 24 hours…presently I think it is 1.1%
I was joking you know… I too would be happy with the scenario you’ve described… $500 million is still a lot to “the little people”… , but the government… well, not so much…
anon 1, September 16, 2011 at 11:00 am
If it wasn’t for the man made global warming myth we wouldn’t be having this conversation.
Nobel Prize-Winning Physicist Resigns Over Global Warming
Dr. Ivar Giaever, a former professor with Rensselaer Polytechnic Institute and the 1973 winner of the Nobel Prize in physics, abruptly announced his resignation Tuesday, Sept. 13, from the premier physics society in disgust over its officially stated policy that “global warming is occurring.”
The official position of the American Physical Society (APS) supports the theory that man’s actions have inexorably led to the warming of the planet, through increased emissions of carbon dioxide.
Giaever does not agree — and put it bluntly and succinctly in the subject line of his email, reprinted at Climate Depot, a website devoted to debunking the theory of man-made climate change.
Nobel Prize-Winning Physicist Who Endorsed Obama Dissents! Resigns from American Physical Society Over Group’s Promotion of Man-Made Global
Good post Nal. Spin city is working overtime.
Does not matter a wit – China has massive subsidies for their solar manufacturers because they want to own this industry. No American company will be able to compete no matter what they do unless they can come up with a technological leap forward that can be patented and controlled.
Even that might not be enough, over the last decade the Chinese have so dominated the market for various raw materials and basic components that no companies outside China exist for many of the fundamental material needed. So, if this leap forward needs any of these components China can easily constrict the supply.
This is a real criminal enterprise & it has co-opted a lot of the industrialist from around the world with cheap labor & goods. Khrushchev once said “when the last capitalist is hing he will sell us the rope to do it.” He may be right yet.
I would like to have just the bank exchange rate on 500 million for 24 hours…presently I think it is 1.1%
I always want to like Kevin Drum, we have similar backgrounds. But to quote Ronald Reagan, there he goes again.
Read what Kevin Drum says, ” At this point we do know enough”…
Jeez, he’s always saying stupid shit like this.
Read what he says in that article about climategate. Well truth is for me, Kevin Drum’s writing is what turned me against cap and trade. Why? Because Drum kept advocating for cap and trade because he said Republicans would be too stupid to realize it was a tax scheme.
I do not think we now know enough.
I do not think we should be talking about how to spin Solyndra.
I do not think the presence of other investors somehow makes DOE’s investment proper. ESPECIALLY when the other investors are all VENTURE CAPITALISTS investors and in total amount to about half of the the DOE investment.
I do not think pressuring OMB to make their decision was benign or minimal.
I do not think DOE should have been picking winners. I do not think they should invest in specific technologies without getting ownership of those technologies.
I think Drum’s article is much too soon and is just typical partisan hackery.
I know nothing about martial arts, I do suspect that Drum’s approach and Dave Robert’s approach of meeting fire with fire, of blocking their locomotive by running our locomotive into it head on, will probably lead to a pessimal outcome.
Kevin Drum, Mother Jones, Stephen Lacey and Climate Progress would have us believe this is all old news with nothing to learn.
I see a cockroach. I wonder how many I don’t see.
Despite Solyndra’s abrupt closing and bankruptcy announcement last month, the Department of Energy (DOE) is undeterred. Just this month, the agency made two more loan guarantees worth millions of dollars to alternative energy firms.
And, as was the case with Solyndra, officials and investors with the two new companies have strong financial ties to President Barack Obama.
On September 7, the DOE announced its plan to guarantee 80 percent — or $275 million — of a $344 million private loan taken out by the firm SolarCity. The company installs rooftop solar systems that harvests electricity SolarCity then sells.
The guarantee means that if SolarCity’s project does not succeed, the DOE will use taxpayer money to pay back 80 percent of the company’s private loans
The current plan is for SolarCity to operate 160,000 systems on military bases around the country, and hire 750 workers over five years. It has been described as the “largest residential solar project in history.”
The Chairman of SolarCity, Elon Musk, is a major financial supporter of the president. On April 15 of this year, Musk donated $35,800 to the Obama Victory Fund. He also gave an additional $5,000 to the Obama campaign.
Like Solyndra officials White House visitor logs show Musk has visited the Administration at least four times since 2009.
Read more: http://dailycaller.com/2011/09/12/new-doe-loans-support-green-obama-backers/#ixzz1Y7ybaqA7
Remember the days when $500 million seemed like a lot of $$$$… lol
and agree with Nal (and AY) about rolling heads…
it’s the only DOE loan that has failed so far; and there’s no real evidence that anyone in the White House did anything worse than push OMB to speed up their decision-making process a bit in 2009.
Which may be true, but
Solyndra, isn’t the only business to go belly up after benefiting from a piece of the $800 billion economic stimulus package passed in 2009.
At least four other companies have received stimulus funding only to later file for bankruptcy, and two of those were working on alternative energy.
Evergreen Solar Inc., indirectly received $5.3 million through a state grant to open a $450 million facility in 2007 that employed roughly 800 people. The company, once a rock star in the solar industry, filed for bankruptcy protection last month, saying it couldn’t compete with Chinese rivals without reorganizing. The company intends to focus on building up its manufacturing facility in China.
Read more: http://www.foxnews.com/politics/2011/09/15/despite-stimulus-funding-solyndra-and-4-other-companies-have-hit-rock-bottom/#ixzz1Y7wwvGyw
Good point nal….
……Stewart had some fun last night with the ongoing scandal surrounding Solyndra — a green tech company the Obama administration praised and gave a $500 billion loan guarantee.
The post at 10:23 am is incorrect….It is only 500 MILLION…..
How to Talk About Solyndra
Conservatives have been trying to paint this as a big scandal of some kind, despite the fact that: the company had plenty of private investors too; it’s the only DOE loan that has failed so far; and there’s no real evidence that anyone in the White House did anything worse than push OMB to speed up their decision-making process a bit in 2009.
I’ll wait to see if anything comes out about White House pressure on the DOE decision. If there was White House pressure on the DOE, that would make Solyndra more like the LightSquared incident.
There is a “quid pro quo” attitude regarding government contracts and major donors that permeates the political level of the bureaucracy. Unless some heads roll, that attitude will persist.
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….
Anon brings up a good point. Does the US now own the technology? If we do, half a billion might turn out to be a good deal.
Listening to NPR’s coverage the other day (IIRC), it sounded to me that of all the mostly phony scandals, this was had a good chance of sticking, and that it should.
In my ignorance, I generally prefer government to be subsidizing an industry airmail style by guaranteeing some amount of services to be bought, but not by picking individual winners.
I am also curious where we taxpayers are on the list of creditors.
Do we now own their technology? Can we license it to others in the industry?
It’s tragic that David Halberstam is not present to write, Best and the Brightest II, Electric Boogaloo.
So he is not just ineffective …
Not that it matters.
And will Obama provide the Silver Platter as well as the 40 pieces of silver…..
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