Solyndra loan decision lands White House in hot water, prompts congressional investigation

The White House is under fire for its decision to grant Solyndra a loan guarantee of $500 million on short notice. Congress is investigating the loan guarantee and calling on the Obama administration to provide more details. As the Washington Post’s Joe Stephens and Carol Leonnig reported:

The Obama White House tried to rush federal reviewers for a decision on a nearly half-billion-dollar loan to the solar-panel manufacturer Solyndra so Vice President Biden could announce the approval at a September 2009 groundbreaking for the company’s factory, newly obtained e-mails show.

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Solyndra LLC Chief Executive Officer Brian Harrison and Chief Financial Officer Bill Stover have postponed their previously scheduled congressional testimony until sometime next week. (Sept. 13)

Solyndra LLC Chief Executive Officer Brian Harrison and Chief Financial Officer Bill Stover have postponed their previously scheduled congressional testimony until sometime next week. (Sept. 13)

The Silicon Valley company, a centerpiece in President Obama’s initiative to develop clean energy technologies, had been tentatively approved for the loan by the Energy Department but was awaiting a final financial review by the Office of Management and Budget.

The August 2009 e-mails, released exclusively to The Washington Post, show White House officials repeatedly asking OMB reviewers when they would be able to decide on the federal loan and noting a looming press event at which they planned to announce the deal. In response, OMB officials expressed concern that they were being rushed to approve the company’s project without adequate time to assess the risk to taxpayers, according to information provided by Republican congressional investigators.

Solyndra collapsed two weeks ago, leaving taxpayers liable for the $535 million loan.

One e-mail from an OMB official referred to “the time pressure we are under to sign-off on Solyndra.” Another complained, “There isn’t time to negotiate.”

“We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week),” one official wrote. That Aug. 31, 2009, message, written by a senior OMB staffer and sent to Terrell P. McSweeny, Biden’s domestic policy adviser, concluded, “We would prefer to have sufficient time to do our due diligence reviews.”

White House officials said Tuesday that no one in the administration tried to influence the OMB decision on the loan. They stressed that the e-mails show only that the administration had a “quite active interest” in the timing of OMB’s decision.

“There was interest in when a decision would be made because of its impact on whether an event involving the vice president could be scheduled for a particular date or not, but the loan guarantee decision was merit-based and made by career staffers at DOE,” White House spokesman Eric Schultz said.

With the Solyndra decision becoming a national story, there are many misconceptions of it all means. Wonkblog’s Brad Plumer explained the five myths about the Solyndra collapse:

1) This scandal is no big deal. To the contrary, evidence is mounting that there was something irregular about the way the Solyndra deal got greenlighted. My colleagues Joe Stephens and Carol D. Leonnig have obtained e-mails showing that the White House pressed the Office of Management and Budget to hurry up in finalizing the deal (note that this came after the Energy Department had already approved the loan), even as OMB officials voiced concern about being rushed.

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