The Washington Post

White House got heads up on Solyndra’s pending layoff announcements

Senior White House officials were warned that solar-panel-maker Solyndra planned to announce layoffs just before the hotly contested November 2010 midterm elections, newly released e-mails show.

The White House also got advance notice that the company had agreed to postpone delivering the politically damaging news, according to the e-mails provided Friday by a government source. Energy Department officials persuaded the company to delay the announcement until after Election Day.

The newly released e-mails show the White House fretting about the bad news that was coming and discussing how to handle media questions about a company the Obama administration had made a showcase of in its effort to use taxpayer funds to create clean-energy jobs.

An Energy Department spokesman said Friday that the department has asked the inspector general to review the delayed announcement. The newly released documents contain no evidence that White House officials directed anyone to request the delay in publicizing that 200 Solyndra workers would lose their jobs.

“Not a good start for the first closed loan guarantee,” one White House climate official wrote of Solyndra on Oct. 29, 2010. One year earlier, the company had won a $535 million government-backed loan to build a new factory in Silicon Valley — the first loan the Obama administration had awarded in the program.

“No es bueno,” Heather Zichal, a top aide, wrote to White House climate czar Carol Browner on Oct. 27. “Sounds like they will make this announcement next week, but press is sniffing around so it may come out sooner.”

Obama had visited Solyndra’s California plant that May to praise its success, even though outside auditors were questioning whether the operation might collapse in debt. The president pledged that the government loan to the company, funded by stimulus money, would create 1,000 permanent jobs.

The company shut down operations in August 2011, and, as some administration officials feared, has been cited by critics as an example of political favoritism. Solyndra is under criminal investigation and also has been the subject of an 11-month congressional probe into whether politics played a role in the company’s selection to receive a federal loan. Leading investors in Solyndra were tied to a major Obama campaign fundraiser, Oklahoma billionaire George Kaiser.

The newly released e-mails cover the period leading up to the contentious 2010 midterm elections, when Democratic control of Congress was imperiled. The chief executive of Solyndra notified the Energy Department on Oct. 25 that he planned to announce layoffs at the company in three days.

The Energy Department asked the company to delay the announcement until Nov. 3, one day after the elections, previously released e-mails from company officials show.

A Solyndra investment adviser wrote at the time that department officials were pushing “very hard” for a delay until after the elections. The company made the announcement Nov. 3.

The e-mails show the looming news set off a flurry of activity at the White House. The first warning came Oct. 26, when the Energy Department’s chief of staff, Rod O’Connor, told Browner and other White House aides that the company’s bad news would come in two days and offered to discuss the matter.

The e-mails show that a day later, a top deputy to Browner was telling colleagues that the layoff announcement had been put off a week.

“I hear from [Zichal] that whatever announcement of ‘problems’ they are considering has been delayed a week,” an aide to White House Chief of Staff Rahm Emanuel wrote to Vice President Biden’s chief of staff, Ron Klain.

The Energy Department has declined to confirm events described in the e-mails. Energy Secretary Steven Chu testified in a November congressional investigative hearing that he didn’t know anything about a move to put off the announcement and promised he would find out who was involved.

“It’s not the way I do business,” Chu said then. “I would not have approved it.”

Republicans won a majority of the seats and control over the House of Representatives in the Nov. 2, 2010, election.

The White House produced the records to the House Energy and Commerce subcommittee investigating the loan Friday afternoon.

The documents show “all of the decisions about whether to grant or restructure the Solyndra loan guarantee were made on the merits by DOE,” White House Counsel Kathryn Ruemmler and Biden’s counsel, Cynthia Hogan, wrote to the committee.

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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