The Magazine

The Solyndra Stonewall

Oct 31, 2011, Vol. 17, No. 07 • By STEPHEN F. HAYES
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About 24 hours after he recited the oath of office, Barack Obama addressed senior executive branch officials and cabinet secretaries at the Eisenhower Executive Office Building. The new president promised that his administration would bring a new openness to Washington, with strict ethics requirements and a presumption in favor of public disclosure of, well, almost everything. “For a long time now, there’s been too much secrecy in this city,” he declared. “The old rules said that if there was a defensible argument for not disclosing something to the American people, then it should not be disclosed. That era is now over. Starting today, .  .  . this administration stands on the side not of those who seek to withhold information but those who seek to make it known.”

Photo of Obama touring Solyndra facilities

Think about that promise as you consider the Obama administration’s response to the congressional investigation of a $535 million loan guarantee to the bankrupt solar panel manufacturer Solyndra.

After the Department of Energy complied with an initial Solyndra document request from the House Energy and Commerce Committee in February 2011, the Obama administration became largely uncooperative. When there has been a defensible argument for not disclosing something, the administration has used it. Officials have withheld thousands of pages of documents. They have ignored requests for information as a matter of routine. In late June, the deputy director of the Office of Management and Budget did not show up at a congressional hearing for which he was the only witness. In late July, OMB failed to meet a deadline to provide documents that had been subpoenaed by the Energy and Commerce Committee. In October, after the head of the Department of Energy’s loan program resigned, the administration finally provided some of the requested documents​—​but did so late on a Friday of a three-day weekend and only after briefing select reporters in advance to spin the damaging materials.

These are the “old rules.” As questions surrounding the Solyndra loan grow more serious, the Obama administration is digging in. It’s not hard to see why.

Late last week, for instance, the administration muzzled a key figure in the developing controversy. The Department of Energy denied a request from the House Energy and Commerce Committee for a transcribed interview, under oath, with Susan Richardson, chief counsel to the Department of Energy program that granted the risky loan to Solyndra. Richardson is the author of two memos from earlier this year about the restructuring of that loan​—​changes which ensured that private investors, including several prominent Obama supporters, would be paid back before taxpayers in the event of a default.

The two memos are nearly identical except for their dates and, perhaps significantly, the addressees. The first, labeled “draft” and dated January 19, 2011, is a “Memorandum for the Secretary”​—​Energy Secretary Steven Chu​—​to be delivered “through Scott Blake Harris,” the department’s general counsel. A second version, dated February 15, 2011, is addressed directly to Harris, with no mention of Chu.

Why the difference? Perhaps Richardson, or someone in her employ, didn’t want to burden a busy Secretary Chu with more paperwork. Or maybe Richardson thought it was up to Harris to decide if the issue was important enough to be brought to Chu’s attention.

Those are the charitable explanations. Here’s another possibility: Richardson may have sought to protect Chu from the political fallout if an increasingly flimsy Solyndra collapsed. No one, after all, had been a bigger advocate for the Solyndra loan than Steven Chu. From the beginning, Chu sought to expedite the loan guarantee, even if that required changing the rules meant to protect taxpayers. In February 2009, for example, Chu complained to the Wall Street Journal that paperwork requirements were burdensome. “It might be too much,” he said.

A month later, Chu had apparently made some progress. The Solyndra loan application had been denied by the Bush administration in mid-January 2009. But the new rules yielded different results. “We’ve accelerated and streamlined the process and the loans are coming out,” he said. “We’re trying to streamline it so that the period of time will be reduced from a scale of four years to several months.”

Two years later, as Richardson was preparing her memo justifying the loan restructuring, the political implications of a Solyndra collapse were on the minds of top Obama administration figures. Officials at the Office of Management and Budget thought Solyndra so important, in fact, that they recommended having a top OMB representative raise the issue directly with Chu.

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