October 3, 2011Emails released Monday show the White House was warned about Solyndra's potential problems even before President Obama visited the company's Fremont, Calif., headquarters and used it as a backdrop for his push for renewable energy investment and green jobs.
"A number of us are concerned that the president is visiting Solyndra," Steve Westly, managing partner of Westly Group, wrote in an email to Obama senior adviser Valerie Jarrett on May 24, 2010, a day before the president's well publicized trip to Solyndra. "[T]here is an increasing concern about the company because their auditors, Coopers and Lybrand, have issued a 'going concern' letter ... Many of us believe the company's cost structure will make it difficult for them to survive long term."
Westly went on to ask Jarrett if he could check with the Energy Department to make sure its officials were comfortable with Solyndra's finances.
"I just want to help protect the president from anything that could result in negative or unfair press," Westly wrote. "If it's too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc."
Democratic staff on the House Energy and Commerce Committee on Monday circulated the emails, which also show intense disagreement between two parts of the Obama administration throughout most of the time solar company Solyndra received taxpayer dollars.
The White House Office of Management and Budget needed to sign off on the risk assessment of a loan guarantee before the Energy Department approved a project's loan under the program, which began in 2009 and expired last week.
Emails show the two agencies were on the same page in September 2009, when the department approved Solyndra's loan guarantee. But by 2010, OMB officials started having concerns about the solar manufacturer's financial standing.
On Aug. 31, Solyndra -- the first company to receive a federal loan guarantee under the Energy Department's stimulus project for renewable energy -- filed for Chapter 11 bankruptcy protection.
OMB's concerns in 2010 were heightened by an independent audit that expressed doubt about the company's finances.
"DOE ... has one loan guarantee to monitor and they seem completely oblivious to this issue," one OMB analyst said to another in an April 2, 2010, email.
"What's terrifying is that after looking at some of the ones that came next, this one [Solyndra] started to look better," another OMB email exchange said of Solyndra. "Bad days are coming."
In an internal memo on April 6, 2010, Energy Department staff said that concerns from outside auditor PricewaterHouseCoopers reinforced the notion that Solyndra, a startup company, needed financial backing to survive.
These concerns ultimately made their way up to Obama's closest aides, ahead of the president's May 25, 2010, visit to Solyndra's California headquarters. Ron Klain, then-chief of staff to Vice President Joe Biden, e-mailed Rod O'Connor, the chief of staff at DOE, to assess Solyndra's financial standing. O'Connor conceded the company would not survive as-is for too long.
"Bottom line is that we believe the company is okay in the medium term, but will need some help of one kind or another down the road," O'Connor said to Klain in a May 24, 2010, email.
At that time, Energy had already restructured the Solyndra loan. The company asked the department to restructure it again just before it declared bankruptcy, but the government refused.
The email exchanges highlighted more than others previously released the extent of disagreement within the administration over Solyndra and the loan guarantee program.
The Democratic staff -- which includes the offices of House Energy and Commerce Committee ranking member Henry Waxman, D-Calif., and that panel's Oversight and Investigations Subcommittee ranking member, Diana DeGette, D-Colo. -- released the emails in a memo Monday, ostensibly in an attempt to show no proof of administration favoritism in awarding the $535 million loan guarantee to a company whose private investors included Oklahoma oil billionaire George Kaiser, who has connections to President Obama.
October 3, 2011