The Magazine

President Solyndra

And his mean green wealth-wasting machine.

Oct 3, 2011, Vol. 17, No. 03 • By STEVEN F. HAYWARD
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But then along came the American Recovery and Reinvestment Act of 2009, better known as the Obama stimulus, which put the DOE clean-energy loan guarantee program on steroids. The stimulus nearly doubled the budget authority for loans (even though the existing program had yet to make its first loan), and set a deadline of September 30, 2011, to spend all the program’s money. The emphasis now was more on creating jobs than generating energy; the DOE described the amended program as “a temporary program designed to address the current economic conditions of the nation.” More than one DOE staffer told me at the time that they didn’t know how they were going to be able to spend all the stimulus money being thrown at the department.

Over the next few months, the White House appears to have become intensely interested in the fate of the Solyndra loan guarantee, during which time Solyndra executives and investors made their multiple visits to the White House. In March 2009 DOE granted Solyndra’s revised application with a “conditional commitment” for the loan​—​one of the first out of the chute​—​which is merely the first hurdle to final approval, even though an OMB staffer wrote in an email that “This deal is NOT ready for prime time.” The DOE’s credit review board and OMB still had to “score” Solyndra’s business plan again, and were unsatisfied with several aspects of Solyndra’s outlook. A few people in the White House had misgivings. Vice President Biden’s chief of staff, Ron Klain, noting the DOE’s continuing reservations, emailed OMB staff to say, “Can we chat on Monday about the DOE flag in here on Solyndra. .  .  . If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY.” One OMB email on March 6 said, “DOE staff just told me that there’s a 99 percent certainty that President Obama, on March 19 in California for other reasons, will announce that DOE is offering a loan guarantee to Solyndra. As far as I can tell the obligation won’t be entered into until May, but once the President endorses it, I doubt seriously that the Secretary will withdraw for any reason.”

OMB continued to push back with complaints about the “time pressure” coming from the White House, leading to “rushed approvals.” One OMB staffer said, “I would prefer that this announcement be postponed. .  .  . This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right.” Even at the time of these email exchanges, DOE staff noted that a credit-rating agency had warned that Solyndra would run out of cash by September 2011. The email trail makes clear that as the proposed September groundbreaking approached, the White House was interested in the political points they could score with Solyndra. An aide to chief of staff Rahm Emanuel wrote to OMB and DOE on August 11 to say, “As the closing of the Solyndra deal nears, we want to think about the potential announcement value in this.” The September 4 date loomed large for the White House because, as the same Emanuel aide emailed on August 25, “It’s the same day the unemployment numbers come out, and we’d want to use this as an example where the Recovery Act is helping create new high tech jobs.” It appears that the groundbreaking date was moved up from September 8 at the request of the White House for this reason. On the other side of the ledger, by invoking their Fifth Amendment rights against self-incrimination in House hearings, Solyndra’s executives no doubt hoped to avoid answering (among other things) pointed questions about whether they sought the administration’s involvement in a splashy groundbreaking as a marketing tactic and means of attracting more investors.

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