Solyndra tried to influence Energy Department, e-mails show

In the two years preceding its collapse, Solyndra and its biggest investor aggressively asserted themselves in dealings with the Obama administration, pushing Energy Secretary Steven Chu to visit the company’s headquarters to help it raise private money and later suggesting it would file for bankruptcy if the Energy Department rejected its proposed rescue plan.

Executives associated with the California solar panel company also privately described Energy Department officials as more concerned with appearances than with sound business decisions.

More on this Story

View all Items in this Story

Wonkblog: Analysis of Chu’s testimony on Solyndra

Read story

“The DOE really thinks politically before it thinks economically,” a Solyndra board member wrote in December to George Kaiser, an Obama fundraiser whose family funds owned a third of the company.

At another point, an investment adviser to Kaiser wrote in an e-mail: “DOE is willing to accommodate Solyndra . . . but they appear to be concerned about ‘looking bad.’ ”

The new details come from e-mails released Wednesday by the House Energy and Commerce Committee, whose Republican majority has been investigating Solyndra’s collapse since February. The documents were provided in advance of Chu’s testimony, scheduled for Thursday before the committee’s investigative panel.

Committee Republicans have said that President Obama used his clean-energy initiative to steer loans to campaign donors. Solyndra’s biggest investor is Argonaut Equity, an investment firm for Kaiser’s family funds. Kaiser, a Tulsa billionaire, has said he played no part in helping Solyndra win a $535 million federal loan.

The new documents depict Solyndra and its investors as far from passive recipients of the Energy Department’s money. Instead, they show executives making demands, striking tough bargains and not shying from criticism of the agency that was fueling the company’s growth.

One new document expected to be cited at Thursday’s hearing is a December e-mail to Kaiser from Steven Mitchell, who was managing director of Argonaut and a member of Solyndra’s controlling board. Mitchell wrote that the Energy Department shot down Argonaut’s plan for the agency to rescue the company from a liquidity crisis, so “we politely moved the conversation toward” how to file for bankruptcy.

“To me it was clear the DOE folks were somewhat caught off guard that we weren’t going to bail out the company,” Mitchell wrote. A senior Energy Department staffer responded by suggesting that if Argonaut and other investors contributed an additional $75 million to keep the company afloat, they would be placed ahead of taxpayers for repayment if the company went under, the e-mail said.

DOE spokesman Damien LaVera said that Argonaut officials are entitled to their opinion but that all loan decisions were made on the merits.

A version of that deal was later put in place, and Republicans have questioned whether the agreement violated federal law. Democrats prepared to argue that the arrangement was reviewed by Energy Department lawyers and deemed appropriate.

In a February 2009 e-mail, Solyndra’s then-chief executive, Chris Gronet, listed 10 conditions under which the company would raise an additional $147 million in equity. One was that Chu visit Solyndra’s California factory and hold media interviews there, for use in the company’s fundraising efforts. Chu did visit Solyndra and help break ground for its new factory in September 2009.

Other e-mails show divisions over Solyndra within the Obama administration.

In July 2009, a staffer in the Energy Department’s loan office criticized Chu for responding to reporters’ questions by saying that an announcement about Solyndra’s loan approval was “imminent” and that “the loan is theirs, as soon as they get the additional capital that’s required by statute.”

“This nonsense has to stop,” the staffer wrote in an internal e-mail. “The conclusion that ‘the loan is theirs’ doesn’t help our negotiation.”

Also Wednesday, Democrats on the energy committee released a memo saying that the chief financial officer for a Solyndra supplier had written to the Energy Department loan program alleging financial improprieties by the company.

The officer said that Solyndra asked suppliers to let it delay cash payments to improve the appearance of Solyndra’s balance sheet.

“The reason given by Solyndra was that this would allow Solyndra to meet the DOE cash requirement and access the DOE loan,” the memo said.

An attorney for the Energy Department loan programs office asked a Solyndra lawyer about the allegations and said the company determined they were groundless. Solyndra’s lawyer also asserted, under its contract terms, that the alleged actions would not constitute fraud.

The memo said there was no evidence that Chu or any official in the White House knew of the claim. Solyndra is under criminal investigation by federal prosecutors.

The Democratic memo also said the committee interviewed Steve Isakowitz, a Bush administration appointee to the post of chief financial officer at the Energy Department, who left in July. Isakowitz said neither Chu nor the White House pressured him on the Solyndra loan.

Chu on Wednesday released parts of his prepared remarks for the hearing.

He said his agency had provided more than 186,000 pages of documents to the committee. “As this extensive record has made clear, the loan guarantee to Solyndra was subject to proper, rigorous scrutiny and healthy debate during every phase of the process,” he said.

Researcher Alice Crites contributed to this report.

 
Read what others are saying