Government adviser defends Solyndra despite ethics agreement
By Carol D. Leonnig and Joe Stephens,
The day after a senior Energy Department adviser was told to avoid discussing Solyndra’s application for a $535 million federal loan, he defended the solar company’s reputation in an exchange with a White House aide.
Steven J. Spinner, a major fundraiser for President Obama and a Silicon Valley investor tasked with helping the government invest in clean-technology companies, had an ethical conflict: His wife worked for Wilson Sonsini, a California law firm that represented Solyndra, the solar-panel maker, in its applications for the government loan.
Even so, on Aug. 19, 2009, Spinner e-mailed an aide to then-Chief of Staff Rahm Emanuel that Solyndra was solid, and he suggested it deserved government support.
“I haven’t heard anything negative on my side,” he responded in the e-mail exchange, proposing that he set up a talk with whomever was raising red flags. “I . . . have no idea what they’re referring [to].”
Spinner’s comments came in newly released e-mails that provide a rare window into interactions among the Obama White House, venture capital investors, and key decision makers inside federal agencies. In an administration that said it would curtail lobbyists’ influence, the documents show ardent lobbying by political appointees inside the agencies and significant White House access given to venture capitalists with a major stake in the $40 billion stimulus investment program for clean energy.
Solyndra, once a showcase for Obama’s signature stimulus initiative to spur clean technologies on U.S. soil, is now a shuttered firm that left taxpayers on the hook to repay its half-billion-dollar loan. Republican lawmakers probing the deal allege that the company won favoritism because its largest owners included investment funds linked to George B. Kaiser, a major Obama fundraiser. Kaiser has said he did not intervene on behalf of Solyndra.
Last month, FBI agents raided the company’s Fremont, Calif., headquarters in a criminal probe into suspected accounting fraud.
A senior administration official declined to comment on whether Spinner violated ethics rules. Department of Energy spokesman Dan Leistikow said Spinner could monitor the Solyndra application, though the memo also said Spinner “would not participate in any discussion” of Solyndra’s application.
“The memo says he is allowed to get status updates about clients of his wife’s firm — since she wasn’t receiving any financial benefit from those clients — but wasn’t allowed to make decisions about those applications, “Leistikow said. “Tracking the status of applications was part of his job — making decisions about those applications was not.”
Spinner, who left the agency in September 2010 to become a fellow at the Center for American Progress, a Democratic think tank, did not respond to calls or e-mails requesting comment.
His wife, Allison Spinner, also did not respond. But Courtney Dorman, a spokeswoman for her law firm, said that Allison Spinner did not work on matters involving Solyndra and that the firm established “an ethical wall” around her. That wall barred her from working on other Energy Department matters, discussing them with others at the firm, and looking at related documents.
“The firm takes all conflicts extremely seriously,” Dorman said.
A friend of Spinner’s described Steve Spinner as a former triathlete who was ebullient by nature and detail-oriented in his work.
“He’s very outgoing; the colorful language used in the e-mails, I think, was not out of character for him,” said the acquaintance, who knows Spinner through business contacts and asked not to be identified because he had not spoken to Spinner since his e-mails became public. “It looks to me like he wasn’t involved in the guarantee, but maybe in the rollout of the guarantee and in the politics of it, and that would be appropriate.”
Spinner had mentioned to the friend that his wife’s law firm had ties to Solyndra, but did not consider it an ethical problem.
“In all my dealings with Steve, he’s been very upfront about his role at DOE,” his friend said. “They both seem to have erected firewalls to separate them from this.”
On Aug. 18, a day before Spinner defended Solyndra to the White House, Spinner’s boss had given him an ethics waiver allowing him to give advice on loan-guarantee applicants and their status, but instructing him not to participate in matters involving Wilson Sonsini clients. That boss was also a fellow Silicon Valley colleague: Matt Rogers, Secretary Steven Chu’s top adviser on stimulus.
“You will not participate in any discussion regarding any application involving Wilson Sonsini,” Rogers wrote in the ethics memorandum. “[T]his authorization [to work on loan applications] does not extend to your participation in any application in which Wilson is a party or represents a party in the matter.”
Spinner’s official title was small-business loan guarantee adviser, but he had political connections. He’d bundled donations for Obama’s campaign and served on the administration’s transition team for technology investments.
A Harvard business school alum who began his career in Europe and Asia as a business analyst for McKinsey, Spinner later moved to Menlo Park, Ca. and became an active investor and startup adviser to technology firms and entrepreneurs trying to grow their ventures. He was a founder in 2002 of Sports Potential, an educational services and sports sciences company. He married Allison Berry, then an associate at Wilson Sonsini.
In the summer of 2009, Spinner’s defense of Solyndra came as the company was on the brink of winning final approval for the Obama administration’s first loan guarantee for a clean-energy project. And over the next two weeks after his ethics waiver was penned, Spinner pushed aggressively for a decision on approving Solyndra’s loan.
In September, after Solyndra’s loan was formally approved and after sending dozens of e-mails to the White House and Energy Department career staff on the subject, Spinner wrote to the agency’s ethics adviser restating that he would not get involved in projects sought by his wife’s firm’s clients.
“As agreed, I will recuse myself from any active participation in any of these applications,” Spinner wrote in an e-mail.
Since leaving the agency, Spinner wrote of the challenges the loan-guarantee program faced, including being slow to move deals along and set up procedures for analyzing projects.
“Despite these herculean challenges, though, this ‘embattled’ program has by all business metrics proven an outright success,” Spinner wrote in July. “Even the most controversial loan guarantee recipient — Solyndra, a solar manufacturer — is seeing an operational turnaround.”
Also on Friday, Republicans on the House Energy and Commerce Committee said they were concerned with the integrity of the Energy Department’s overall loan guarantee program, and called on Secretary Chu to turn over information on the financial condition of every loan guarantee funded with stimulus dollars.
Committee leaders had previously requested the financial information on Sept. 20, before the agency granted an additional $9 billion. Energy Department officials failed to respond to the first request, the committee said. The program expired on Sept. 30.
Obama used a Thursday news conference to credit Energy Department officials with using their “best judgment” in approving the loan to Solyndra, part of a $35.9 billion federal effort to invest in breakthrough technologies that could create jobs and spur economic growth.