White House spokesman Clark Stevens added that “internal debates about complex programs like this should be expected, and the White House playing a role in assisting interagency discussion surrounding that process is entirely appropriate.”
Solyndra, a Silicon Valley start-up that manufactured solar panels, received a half-billion dollar federal loan from the program before suddenly closing last August. A short time later, the FBI raided its offices as part of a criminal investigation into whether the company misled the government about its finances.
The government is expected to recover just $24 million of the $527 million that taxpayers lent the company. Republicans have accused the administration of favoring Solyndra because its largest investors were funds linked to Oklahoma billionaire George Kaiser, an Obama donor.
‘Some serious gloating’
Other e-mail exchanges in the documents appear to show deep divisions between Chu and some senior Obama economic advisers over the program.
In June 2011, Chu asked Daley to settle a dispute among agency leaders over whether a $1.4 billion loan to a solar generation facility was consistent with the stimulus act. Chu was a major proponent of the Project Amp facility, which was proposing to use Solyndra as a sole supplier of solar panels at a time when Solyndra was in financial trouble.
Obama’s senior economic leaders, including then-Office of Management and Budget director Jack Lew, expressed concerns that the project was spread over several years and did not have any immediate impact on the local economy. Lew, now Obama’s chief of staff, told a DOE staffer after the Daley meeting that he was not opposed to the general idea of the project but was just “protecting the president.”
After the meeting, Jonathan Silver, the director of the Energy Department’s loan office, celebrated “total victory” over his administration opponents. He described in an e-mail to a colleague how Chu came as “close to an annihilation of the economic team’s position as you could possibly hope for.” Silver speculated that Daley had given the economic team “a fig leaf” and that the Energy Department’s victory was cause to “do some serious gloating.”
A draft of Energy Department talking points prepared for the presidential briefing highlights that the program had committed more than $34 billion and asserted that it had created or saved 68,000 jobs. Those talking points forecast little risk from the program, although Solyndra was already showing signs of distress: The department months earlier had negotiated a loan restructuring amid threats that the firm would have to liquidate for lack of operating cash.
“DOE expects that all loans will be repaid,” one presentation slide said. “When loans are repaid, the benefits — including the creation of tens of thousands of jobs — will have been obtained at little cost to taxpayers.”
Chu appeared eager to make sure that Obama heard about the disagreements over the program within the administration.
“We need to tell the President the truth, as we see it. We need to also present the other side’s point of view as fairly as possible,” the secretary wrote in an e-mail to Hurlbut.
Officials at the Treasury Department and the White House Office of Management and Budget often argued that government subsidies to clean-energy companies gave them too great of a return on investment, or an “unjust enrichment,” Chu wrote.
“Many times, they felt that a ‘better deal’’ could have been brokered by DOE and asked us to renegotiate,” he said.