Solyndra Loans – What Did the WH Know and When?

By | September 14, 2011

The $535 (or $528) million Loan

Obama administration officials defended a $528 million loan to Solyndra, but stated that federal investment in alternative energy must continue.  [emphasis mine] The Obama administration stood by Solyndra, through auditors warned to not risk an initial public offering and a refinancing where taxpayers were behind new investors. A day before Solyndra ceased operations, the Energy Department turned down the company’s request to renegotiate the US loan agreement, saying “a second restructuring was not feasible.” And Department of Energy (DOE) executives participated in day-to-day operation of Solyndra.

DOE guarantee of a $535 million loan to Solyndra was small change. For example, First Solar, for its Sunlight and Topaz projects, received $3.7 billion. The DOE loan guarantees go to risky endeavors such as Solyndra. But, the government gave loans and breaks to Solyndra, backed by a major supporter of President Obama. Evidence suggested the government-backed venture was rather risky. Obama’s DOE pressed forth in the face of a sea of warnings in awarding its green energy loan. In 2008, Solyndra asked DOE for a loan to build a new plant to produce its unique solar panels. Fitch gave Solyndra a B+ credit rating. Dun & Bradstreet had already issued a credit appraisal of the company. Its assessment: “Fair.” Fitch Ratings spokeswoman Cindy Stoller said a B+ rating: “It’s a non-investment grade rating.” She provided a company ratings definition, showing that B+ falls between a “highly speculative” B and “speculative” BB.

When asked about the ratings, energy officials said DOE conducted “extensive due diligence” on the application, which included consideration of the Fitch rating. “We believed the rating, which is used to inform our analysis of potential risks associated with the loan, was appropriate for the size, scale and innovative nature of the project and was consistent with the ratings of other innovative start-up companies,” said spokesman Damien LaVera. In March 2009, Energy Secretary Steven Chu announced DOE’s guarantee of $535 million going to Solyndra. The loan would be provided by the Treasury Department’s Federal Financing Bank, with the Energy Department guaranteeing the issue in case of default.

Bottom line: Taxpayers were bankrolling Solyndra’s venture.

E-mails Show the WH Stayed Informed

E-mails showed the WH monitored DOE deliberations over whether to make a $535 million taxpayer-backed loan to Solyndra, a politically-connected solar energy company. Solyndra’s solar panel factory was touted as a centerpiece of Obama’s stimulus-backed green energy plan – billed as a way to jumpstart a promising new industry while creating jobs. Internal WH emails show the Obama administration monitored progress of the Solyndra loan, even as analysts expressed concerns about the risk involved. An analyst at the OMB advised against moving too quickly. Then DOE announced its commitment to guarantee the Solyndra loan, which the administration had fast-tracked as the first green energy project backed by stimulus dollars. Obama wanted to unveil the announcement while he was on a visit to California.

White House emails suggests the Obama administration pushed for approval of a $535 million loan to Solyndra, even as WH analysts warned the deal was “not ready for prime time.” The emails appeared to show the administration rushed to get the loan approval in order to announce the loan at Solyndra factory groundbreaking in September 2009. “One e-mail from an OMB official referred to ‘the time pressure we are under to sign-off on Solyndra.’ Another e-mail said, ‘There isn’t time to negotiate.'” Vice President Joe Biden’s chief of staff, Ronald A. Klain, had his reservations. “If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY,” Klain wrote in March 2009.

The Investigation

A House committee, the Energy and Commerce Committee, want to have the Obama administration provide answers for risking taxpayer money on Solyndra. “It is not the role of government to pick winners and losers in the market,” said Reps. Fred Upton (R-Mi) and Cliff Stearns (R-Fl). “How did this company, without maybe the best economic plan, all of a sudden get to the head of the line?” Upton said. The committee has been investigating Solyndra for six months, and wants to hear from officials with the DOE and the OMB, which played the central roles in approving the loan guarantee. The loan guarantee is an insurance policy against a company’s debt in the event of default. In Solyndra’s case, the guarantee came from the federal government.

House Republicans are planning to widen the scope of an investigation into Solyndra. “We can’t reveal the other ones we’re looking at, but we’re certainly looking at loan guarantees made through the Department of Energy related to solar panels, biofuels and the energy grid,” Stearns said. Republicans sent a letter to the White House asking for documents and emails related to the Solyndra loan guarantee.

Taxpayers Subordinated to Investors

The Obama administration let $385 million in taxpayer money for Solyndra be subordinated to money from investors in an unsuccessful effort to keep Solyndra from declaring bankruptcy. Solyndra’s liquidation value was $91 million to $99 million in December, 2010, which would have provided less than a 22 percent return to the government. By subordinating $385 million of the government loan to $75 million from investors, the government calculated that Solyndra’s conservative enterprise value this year would be $240 million to $360 million. So that means that, after paying off investors, taxpayers are the owners of a bankrupt company. The George Kaiser Family Foundation, backed by billionaire George Kaiser, holds about 35.7 % of Solyndra. Not that it means anything (sarcasm intended), Kaiser made 16 visits to the White House since 2009.

“Selection of companies to receive U.S. backing are ‘merit-based decisions’ made by career staffers at the Department of Energy, and the process for this particular loan guarantee began under President George W. Bush,” said DOE spoksman Eric Schultz. “Every project that receives financing through the Energy Departments goes through a rigorous financial, legal and technical review process,” Schultz said. What Schultz neglects to point out is that, during the Bush administration, Solyndra’s loan application was unanimously rejected.

Solyndra is the third US solar manufacturer to fail in a month. Five US companies have been awarded $1.56 billion in loan guarantees through a program championed by Obama. So, if these five companies have the same deal as Solyndra, “we ain’t seen nothin’ yet.”

But that’s just my opinion.

Conservative Daily News allows a great deal of latitude in the topics contributors choose and their approaches to the content. We believe that citizens have a voice - one that should be heard above the mass media. Readers will likely not agree with every contributor or every post, but find reasons to think about the topic and respond with comments. We value differing opinions as well as those that agree. Opinions of contributors are their own and do not necessarily reflect those of CDN, Anomalous Media or staff. Click here if you'd like to write for CDN.
Put This Story in your Circles and Share with your Friends

0 thoughts on “Solyndra Loans – What Did the WH Know and When?

  1. Daniel

    Where is the money? Well a good portion of it will be redirected directly into Obama and the Liberal’s campaign coffers. How else do you expect him to rake in a BILLION dollars for his reelection campaign? He sure as hell isn’t going to get a billion dollars from the non-producing welfare/illegal immigrant crowd that make up 90% of his base. The other 10% of his base are exactly like these people here at Solyndra- they pay to play with taxpayers dollars. Liberal elitists such as Nancy Pelosi are skinflints who rarely give a dime to charity. The only money they ever give away is other people’s money. ( as in the taxpayers)

    1. Max

      “Nancy Pelosi are skinflints who rarely give a dime to charity. The only money they ever give away is other people’s money.”

      That is the liberal creed. It’s exactly like Bill Gates and George Soros complaining they don’t pay enough in federal taxes, yet they have NEVER donated extra to the IRS.

  2. WillofLa

    Mark Levin played the recording of that girl who worked for the construction company who was building this company and she said that Obama came and visited with the people who were running the company a couple of times. Her point was that everyone knew that the company didn’t have a chance to make it in the business because, she said, the owners knew China had that same product cheaper. She indicated that the company owners knew they were overpricing the solar panels, it was a scam. Mark asked her, “Do you think Obama knew it was a scam?” And she said, “I don’t see how he couldn’t have known it since he acted like he knew the people who owned the company, and we all knew it was a scam.” She said she wasn’t high on the totem pole of workers and she knew it was a scam so Obama had to have known it was.

    So Mark said that here we were with Obama handing out 530 million dollars to a solar panel company, one of his beloved “green energy” companies he was ramming down our throats, and here they were going bankrupt. So Mark asked the girl some more questions and in the course of answering them she said that right up to a week before the company locked the doors they were putting in machines used to build the panels. She said her company knew that this company was going bankrupt but they were getting their money anyway so they didn’t care what the company did after that. But she said right up to a week before this company closed bankrupt, her company was still working building it.

    This Mr. Kaiser and Obama need to be investigated for malfeasance and theft of taxpayer funds, running a scam, racketeering, and a whole bunch of crimes and THEN DO YOU THINK THAT WILL BE ENOUGH TO IMPEACH OBAMA??? I have asked my Congressman and asked him, “When do you think you can begin impeachment proceedings on Obama?” And he says that , yes, he has committed many crimes while in office of the President, but this is not the time to impeach him.

    I’ll tell you what these politician’s are waiting for. They are waiting for the voters to get rid of him and then they won’t have to fool with him at all, and impeaching him would cause a Constitutional crisis because it would come out in the impeachment proceedings that he was a illegal alien without a legal Social Security number, or a legal passport, or anything. The man is a spy!! And a sabotuer!!

    1. Max

      Thanks Will. I had not heard this.

      Obama deserves this black-mark on his record. (oops I just said the word “black” and “obama” in the same sentence. Thats enough for moronic MSM commentators to brand me as a racist)

  3. WillofLa

    Okay, now I’m going to be trivial here. So where is the money? Did Mr. Kaiser take it as money he can give Obama for his campaign contribution, and pocket the rest? And how would one of my companies go for when it’s subordinated from 75 mill, to 350 mil? Gee, that’s quite a bit of appreciation if you ask me. It sounds like some of Barney Franks financial figuring, the kind he did to make Freddie/Fannie go from bankrupt in 2008, to back in business less than a year later, to asking for 30 billion so that they could buy somemore houses he’s going to force the banks to sell for him and Dodd before Dodd leaves for retirement next year.

    Boy, you know it must be nice to make millions of dollars a year on top of his Senate salary, and then get the kinds of kick backs that he’s gotten from all the banking and finance law making he’s done. I wonder where he gets his suits? You know sometimes you can tell the worth of a man by the cut of his suit. But in the case of Obama and Frank, they probably buy their suits from the Sears and Roebuck catalog.

    Will we ever find out what Paulsen did with the 8 and a 1/2 trillion dollars he stole from the U.S. Treasury? You know when he got “full autonomy” from the Congress to take full control over the Treasury to pay off whoever with whatever they were due from the collapse of Freddie/Fannie so that no one would be mad at us so much so that they would demand that Frank and Dodd be put in prison for ripping them off. I suspect it was the European banks, and international investors who got back every penny they lost in dirivitives and insurance from bankrupcy when they found out their money was gone and Frank or Dodd didn’t have it to pay them back. As far as I am concerned Paulsen needs to be brought in by the FBI and grilled under some hot lights and sweat it out of him as to where and to whom he gave OUR money for the screw up of Bush, and yes I’m blaming Bush since he gave the Democrats so much control over our economy back then that they gave it all to Paulsen and the Supreme Court can’t even get it out of him where the money went.

    So if we’re to find out where this money went then we need to call whoever we use to find out where a lot more money went to while we’re at it.