UPDATE on Solyndra, More evidence Obama administration knew of financial problems while giving company more money

The Obama administration knew that "giving more taxpayer money to Solyndra was risky."

A White House official fretted privately that the Obama administration could suffer serious political damage if it gave additional taxpayer support to the beleaguered solar-panel company Solyndra, according to newly released e-mails.

The firm had burned through millions of dollars and in January still tottered near collapse. The official wanted the government’s top budget official to warn Obama’s energy secretary about the risk, according to the e-mails.

At the time, the Energy Department was trying to pump taxpayer money into the California company to save it from imminent failure. The firm had received a $535 million federal loan from the agency in 2009, but early this year confided to the Obama administration that without a rapid infusion of cash it was in danger of defaulting.

“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.”

The e-mail suggests that, as the Energy Department pushed to release an additional $67 million in installments of the loan to Solyndra, the OMB was not participating in the decision about whether to help the company. OMB staff had been in charge of assessing the default risk of firms that received Energy Department loan guarantees. . . .

Solyndra had apparently lots of money to spend on lobbying the government

According to records filed with the Clerk of the House and a search of disclosure forms compiled by the Center for Responsive Politics, Solyndra spent nearly $1.9 million on lobbying activities over a period of 43 months from 2008 to 2011.

About $1 million of that was earned by the company's two in-house lobbyists, Joseph Pasetti and Victoria Sanville, over an 18-month period from 2010 until this year. But Solyndra has also had several big-name lobbying shops on its payroll, including established powerhouses Dutko Worldwide and Holland and Knight, which began representing the then-fledgling company in 2008.

While Holland and Knight helped the company with renewable energy tax credit issues, Dutko was brought aboard, according to its filings, to "identify decisionmakers and to assist with the client's loan application" through the Department of Energy.

It is that DOE loan that has touched off an outcry on Capitol Hill and has singed the Obama administration, just as President Obama campaigns across the country for his new jobs plan and Republicans look to scale back clean energy and environmental programs. . . .

Solyndra officials apparently very strongly pressed the Bush administration for a loan and they were angry that it was turned down.

On Jan. 12, 2009, Solyndra CEO Chris Gronet sent an Energy Department official an email marked "urgent" expressing outrage that Bush officials had decided a few days earlier that while the loan application had "merit" it needed further study before officials could move forward with a taxpayer-financed loan.
"I was appalled to learn on Friday that our application is being delayed yet again," Gronet wrote to Energy official Steve Isakowitz, writing there had been "countless communications" back and forth suggesting the application would be reviewed Jan. 15. . . .

Democrats' defense is: 1) that the half a billion dollars is just a "tiny fraction" of the $19 billion handed out so far and 2) the government gives loan guarantees to other businesses (nuclear power). Given that this money is in investments that no one would make without government subsidies, everything here is a loss. It isn't clear why the government should be in the loan business at all. I suppose that the argument for nuclear power loan guarantees is that it is too offset some bad regulatory costs, but the most direct thing is to eliminate the bad regulations.

Labels: ,


Post a Comment

<< Home