Obama administration e-mails: Giving more taxpayer money to Solyndra was risky

A White House official fretted privately that the Obama administration could suffer serious political damage if it gave additional taxpayer support to the beleaguered solar-panel company Solyndra, according to newly released e-mails.

The firm had burned through millions of dollars and in January still tottered near collapse. The official wanted the government’s top budget official to warn Obama’s energy secretary about the risk, according to the e-mails.

At the time, the Energy Department was trying to pump taxpayer money into the California company to save it from imminent failure. The firm had received a $535 million federal loan from the agency in 2009, but early this year confided to the Obama administration that without a rapid infusion of cash it was in danger of defaulting.

“The optics of a Solyndra default will be bad,” the Office of Management and Budget staff member wrote Jan. 31 in an e-mail to a co-worker. “If Solyndra defaults down the road, the optics will be arguably worse later than they would be today. . . . In addition, the timing will likely coincide with the 2012 campaign season heating up.”

The e-mail suggests that, as the Energy Department pushed to release an additional $67 million in installments of the loan to Solyndra, the OMB was not participating in the decision about whether to help the company. OMB staff had been in charge of assessing the default risk of firms that received Energy Department loan guarantees.

The e-mails, released by the House Energy and Commerce subcommittee on investigations, come during the panel’s inquiry into the administration’s handling of Solyndra, which declared bankruptcy two weeks ago.

The Silicon Valley company was a centerpiece of President Obama’s initiative to develop clean energy technologies.

Damien LaVera, an Energy Department spokesman, said he could not answer whether OMB staff members spoke to Energy Secretary Steven Chu.

“If anything, this e-mail is yet another piece of evidence that political or optical considerations took a back seat to putting the company and its workers in a better position to succeed and repay the loan,” he said.

In one e-mail, the OMB staffer wrote that an upcoming staff meeting “might present an opportunity to flag to DOE at the highest levels the stakes involved, for the Secretary to do as he sees fit (and be fully informed and accountable for the decision).”

The staffer, whose name was redacted from the e-mails, noted that Solyndra had drawn a lot of media attention since winning its loan guarantee and was still at risk of failing.

“Although [political] optics are generally out of our lane, it may be worthwhile for the Director to privately make this point to the Secretary,” the staffer wrote.

The staffer wrote that allowing Solyndra to shutter its plant in January could let the Obama administration “get some credit for fiscal discipline” and save taxpayer money.

OMB spokeswoman Moira Mack said the e-mail was written by a career employee.

OMB staff members had warned that the Energy Department’s restructuring of Solyndra’s loan might be throwing good money after bad, other e-mails show, and could cost taxpayers $168 million more than if Solyndra had liquidated in January.

Solyndra had reported growing sales until Aug. 31, when it collapsed and filed for bankruptcy, leaving 1,100 people out of work and taxpayers on the hook for the loans. On Sept. 8, FBI agents raided Solyndra’s offices and seized files and computer records.

Internal administration e-mail traffic from 2009, released this week, showed that White House officials pushed for a quick decision on a loan guarantee for Solyndra. They hoped the timing would allow Vice President Biden to announce the approval at a September 2009 groundbreaking for the company’s new factory in Fremont, Calif.

“The issue that involved the vice president having this event did not drive the loan process,” White House spokesman Jay Carney said Thursday.

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Carol Leonnig covers federal agencies with a focus on government accountability.
Joe Stephens joined The Washington Post in 1999 and specializes in in-depth enterprise reporting.
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