For Chu, It Depends on What the Meaning of “Regular” Is

Solyndra Paper Trail Suggests Special Treatment, Contradicts Obama’s Claim that Solyndra Loan Went Through “Regular Review Process” 

• As Energy Secretary Stephen Chu prepares to face congressional questioning today, it’s worth reviewing President Obama’s claim that now-bankrupt Solyndra went through the “regular” review process in receiving a taxpayer-guaranteed loan.
• The Solyndra scandal is a case study in crony capitalism: close relationships with top Obama bundlers and influential lobbyists, an accelerated loan review process, extensive special treatment and an Energy Department more interested in politics than growing the economy.
• Recent news reports revealed the “extraordinary efforts” taken by the Obama administration to prop up Solyndra as it faced imminent bankruptcy. Will Chu continue covering for the Obama administration, or will he own up to the Obama administration’s pattern of giving Solyndra special treatment?

BACKGROUND

As Energy Secretary Stephen Chu prepares to face congressional questioning today, it’s worth reviewing President Obama’s claim that now-bankrupt Solyndra went through the “regular” review process in receiving a taxpayer-guaranteed loan: 

OBAMA ON “POSTER CHILD” SOLYNDRA: THEY “WENT THROUGH THE REGULAR REVIEW PROCESS”: “Obama has defended the Solyndra loan, which had been the poster child of the administration’s green jobs push, telling ABC News last month that ‘hindsight is always 20/20.’

“ ‘It went through the regular review process, and people felt like this was a good bet,’ he said.” (Devin Dwyer, “For Sale: Banner that Greeted Obama at Solyndra,” ABC News, 11/2/2011)

ENERGY SECRETARY STEPHEN CHU TO TESTIFY THAT SOLYNDRA LOAN “WAS SUBJECT TO PROPER, RIGOROUS SCRUTINY”: “Energy Secretary Steven Chu will tell a House panel Thursday that the Energy Department’s $535 million loan guarantee to now-bankrupt solar panel maker Solyndra ‘was subject to proper, rigorous scrutiny.’” (Andrew Restuccia, “Chu: Solyndra Loan ‘Was Subject to Proper, Rigorous Scrutiny,’” The Hill, 11/16/2011) 

OOPS: WHITE HOUSE THOUGHT SOLYNDRA “WAS ONE OF THEIR PRIME POSTER CHILDREN” FOR THE STIMULUS: “BTW, a couple of weeks ago, when Ken and I were visiting with a group of Administration folks in DC who are in charge of the stimulus process (White House, not DOE) and Solyndra came up, every one of them responded simultaneously about their thorough knowledge of the Solyndra story, suggesting it was one of their prime poster children.” (Phillip Klein, “E-mails Show Obama Donor Discussed Solyndra with WH,” The Washington Examiner, 11/9/2011)

The Solyndra scandal is a case study in crony capitalism: close relationships with top Obama bundlers and influential lobbyists, an accelerated loan review process, extensive special treatment and an Energy Department more interested in politics than growing the economy:

SOLYNDRA’S EXTENSIVE POLITICAL CONNECTIONS TO THE OBAMA WHITE HOUSE:

MAJOR SOLYNDRA INVESTOR MET WITH OBAMA OFFICIALS TO LOBBY WHITE HOUSE TO BACK SOLYNDRA IN SAME MONTH INITIAL LOAN WAS FIRST APPROVED: “David Prend, a co-founder of the Boston venture capital firm Rockport Capital, met with Obama’s climate czar, Carol Browner, in early March to talk about Solyndra’s innovative solar panels. He followed up by e-mailing a junior White House aide to ‘help get the word out’ about the company’s desire to ramp up production and its pending partnership with the Obama administration. Prend’s Boston-based venture capital firm held 7.5 percent of the company’s equity.” (Carol Leonnig, “Solyndra Investor Asked for White House Publicity as Firm Sought Federal Funds,” The Washington Post, 10/13/2011) 

“SOLYNDRA’S LAWYERS MAJOR OBAMA, DEMOCRATIC DONORS”: (Matthew Boyle, “Solyndra’s Lawyers Major Obama, Democratic Donors,” The Daily Caller, 9/30/2011)

FORMER DEMOCRAT REP. MEL LEVINE (D-CA)’S FIRM NETTED $1 MILLION FROM SOLYNDRA, AFTER HE BUNDLED $200,000 FOR OBAMA CAMPAIGN: (Matthew Boyle, “Solyndra’s Lawyers Major Obama, Democratic Donors,” The Daily Caller, 9/30/2011) 

AP: DOE OFFICIAL AND “OBAMA FUNDRAISER PUSHED SOLYNDRA LOAN” DESPITE PLEDGE TO RECUSE HIMSELF; HIS WIFE WAS SOLYNDRA LOBBYIST:“Newly released emails show that Steve Spinner, a former Obama fundraiser who helped monitor a clean energy loan guarantee program, was more actively involved in a loan for Solyndra LLC than administration officials have acknowledged. … In the emails, Spinner repeatedly pushes Energy Department and White House budget officials to ensure that the loan was finalized before Biden’s planned trip. The loan closing was announced at the groundbreaking ceremony on Sept. 4, 2009.

“ ‘How — hard is this? What is he waiting for?’ Spinner wrote in an Aug, 28, 2009 email to a DOE official. ‘I have the OVP (Office of the Vice President) and WH (the White House) breathing down my neck on this. They are getting itchy to get involved.’” (Matthew Daly, “Obama Fundraiser Pushed Solyndra Loan,” Associated Press, 10/7/2011) 

TOP OBAMA BUNDLER KAISER “WEIGHED ASKING WHITE HOUSE TO SAVE SOLYNDRA” AS IT WAS FAILING: “A key investor in the failed solar power company Solyndra, who was also a political donor to Barack Obama, strategized with his top executives about whether and how they should use their contacts inside the White House to help their failing business venture, according to emails surfaced by Congressional investigators Wednesday.” (Matthew Mosk, “Emails: Obama Donor Weighed Asking White House to Save Solyndra,” ABC News, 11/9/2011)

E-MAILS CONTRADICT WHITE HOUSE DENIALS THAT KAISER’S 17 WHITE HOUSE MEETINGS EVER MENTIONED SOLYNDRA: (Jim Snyder, “Kaiser Spoke to White House About Solyndra,” Bloomberg, 11/9/2011

AN IRREGULAR AND ACCELERATED LOAN REVIEW PROCESS:

SOLYNDRA REVIEW TOOK ONLY 9 DAYS; AVERAGE WAS 28 DAYS: (Ryan Tracy, “House Probes Solyndra Loan,” The Wall Street Journal, 9/14/2011) 

DOE OFFICIALS SAID FROM THE OUTSET THAT SOLYNDRA’S NUMBERS SHOWED IT WOULD GO BANKRUPT IN SEPTEMBER 2011: (Matthew Mosk, Brian Ross and Ronnie Greene, “White House Warned About Collapsed Energy Company,” ABC News, 9/13/2011) 

OMB TO WHITE HOUSE, MARCH 2009: “THIS DEAL IS NOT READY FOR PRIME TIME”: (Phillip Klein, “OMB Had Warned Solyndra ‘NOT Ready for Prime Time,'” The Washington Examiner, 9/14/2011) 

OMB STAFFER CALLED OUT WHITE HOUSE: “WE WOULD PREFER TO HAVE SUFFICIENT TIME TO DO DUE DILIGENCE REVIEWS AND HAVE THE APPROVAL SET THE DATE FOR THE ANNOUNCEMENT RATHER THAN THE OTHER WAY AROUND”: (Ryan Tracy, “House Probes Solyndra Loan,” The Wall Street Journal, 9/14/2011)

OMB STAFF WORRIED THAT “GIVEN TIME PRESSURE WE ARE UNDER TO SIGN-OFF ON SOLYNDRA,” NO TIME FOR THOROUGH RISK ASSESSMENT: (Tim Mak, “Report: White House Pushed on Solyndra,” Politico, 9/14/2011)

OMB TO WHITE HOUSE: WE “WOULD PREFER THAT THIS ANNOUNCEMENT BY POSTPONED”: (Tim Mak, “Report: White House Pushed on Solyndra,” Politico, 9/14/2011) 

WHITE HOUSE RESPONSE: FULL SPEED AHEAD. (Joe Stephens, “White House Pressed on $500 Million Loan to Solar Company Now Under Investigation,” The Washington Post, 9/13/2011)

SPECIAL TREATMENT FOR A VERY SPECIAL COMPANY:

RAHM EMANUEL DENIED INVOLVEMENT, BUT E-MAILS REVEALED THAT EMANUEL “MAY HAVE BEEN THE ONE EAGER TO SPOTLIGHT SOLYNDRA”: “In September, Emanuel denied any knowledge of the Solyndra loan to WLS Radio’s Bill Cameron. ‘I don’t actually remember that or know about it,’ Emanuel said. But e-mails from White House officials dumped in October revealed that Emanuel may have been the one eager to spotlight Solyndra in early 2009, despite concerns that the California company could be financially unstable.” (Michael Kaplan, “E-mails: Rahm Pushed to Promote Solyndra,” NBC Chicago, 11/14/2011)

SOLYNDRA RECEIVED SPECIAL TAX EXEMPTIONS FROM OBAMA’S IRS: “In November of 2009, in the midst of Solyndra’s downward financial spiral, the Internal Revenue Service issued a ruling that granted special tax favors to the firm and its customers.” (Lou Dolinar, “Solyndra and the IRS,” National Review, 10/19/2011)

OBAMA’S DEPT. OF ENERGY “WAS ACTIVELY PUSHING” SECOND LOAN GUARANTEE WORTH $469 MILLION: (Carol Leonnig, “Solyndra E-mails: Dept. of Energy was Poised to Approve $469 Million for Firm,” The Washington Post, 10/5/2011) 

ENERGY DEPT. OFFICIALS MADE A LEGAL CASE FOR RESTRUCTURING SOLYNDRA LOAN WITH THE EXPECTATION THAT THE COMPANY COULD COLLAPSE: “A memo issued earlier this year makes the case that the Energy Department was within its legal rights to restructure the $535 million Solyndra loan guarantee in February as the California solar company faced financial collapse. … The memo is dated Feb. 15, 2011.” (Andrew Restuccia, “Memo Argues Energy Legally Restructured $535M Solyndra Loan,” The Hill, 10/14/2011) 

EVEN THOUGH TREASURY DEPT. OFFICIALS SAID THEY BELIEVED “SUBORDINATION” OF TAXPAYERS IN RESTRUCTURING MOVE WAS ILLEGAL:“One of the witnesses — Gary Burner, the chief financial officer for Treasury’s Federal Financing Bank — raised questions about the Energy Department’s plan to restructure the loan. Internal emails show that Burner told officials with DOE’s loan programs office in February that they might need approval from the Justice Department before approving the restructuring of the Solyndra loan guarantee. A separate Treasury official, Assistant Secretary for Financial Markets Mary J. Miller, wrote to a White House Office of Management and Budget official in August of this year stating that Treasury believed the ‘subordination’ of the taxpayer interest in the restructuring agreement was illegal.” (Andrew Restuccia, “Memo Argues Energy Legally Restructured $535M Solyndra Loan,” The Hill, 10/14/2011) 

PRIOR TO SOLYNDRA LOAN RESTRUCTURING “BIDEN AIDE SOUGHT INFO ON SOLYNDRA INVESTORS”: “A top aide to Vice President Joe Biden sought information about Solyndra’s private investors just days before the Energy Department made the solar company’s loan guarantee more favorable to the financers, new internal emails released Wednesday show.” (Darren Samuelsohn, “Biden Aide Sought Info on Solyndra Investors, Emails Show,” Politico, 11/2/2011)

FIVE DAYS LATER, SOLYNDRA ANNOUNCED $75 MILLION FUNDRAISING HAUL FROM INVESTORS, INCLUDING BILLIONAIRE OBAMA BUNDLER GEORGE KAISER:“Five days later, on Feb. 28, Solyndra announced it had raised $75 million from its private investors, including George Kaiser, a major 2008 Obama campaign bundler.” (Darren Samuelsohn, “Biden Aide Sought Info on Solyndra Investors, Emails Show,” Politico, 11/2/2011)

FISHY: DOE IMMEDATELY ANNOUNCED LOAN REFINANCING TO PUT NEW INVESTORS AT THE FRONT OF THE LINE: “DOE agreed then to refinance Solyndra’s loan with new terms so that investors could be paid back first on the $75 million if the company went bankrupt.” (Darren Samuelsohn, “Biden Aide Sought Info on Solyndra Investors, Emails Show,” Politico, 11/2/2011) 

“FORMER SOLYNDRA CEO GOT $467K SEVERANCE,” NEGOTIATED TWO MONTHS BEFORE HIS OFFICIAL FIRING: (Randall Chase, “Former Solyndra CEO Gets $456K Severance,”Associated Press, 11/2/2011) 

NEW E-MAILS: WHITE HOUSE STAFF “ABOUT HAD AN ORGASM” REGARDING SOLYNDRA LOAN: “ ‘They about had an orgasm in Biden’s office when we mentioned Solyndra,’ reads a Feb. 27, 2010, email from Levit to Mitchell. A follow-up email from Mitchell to Levit later that day responds with: ‘That’s awesome! Get us a (Department of Energy) loan.’” (Chad Pergram, “Solyndra Emails Claim Biden’s Staff ‘About Had an Orgasm’ About Energy Loans to Firm,” Fox News, 11/9/2011) 

OBAMA’S DOE “ALL BUT” TOLD SOLYNDRA THAT THEY WOULD BE FIRST IN LINE FOR A SECOND STIMULUS LOAN: (E-mail from Steve Mitchell to George Kaiser, U.S. House Energy and Commerce Committee, 3/5/2010, p. 3)

OBAMA ADMINISTRATION PUT “POLITICS ABOVE ECONOMICS”:

“E-MAILS SUGGEST DOE PUT POLITICS ABOVE ECONOMICS WITH SOLYNDRA’”:(Amy Harder, “QUICK TAKE: “E-mails Suggest DOE Put Politics Above Economics with Solyndra,”National Journal, 11/16/2011) 

SOLYNDRA INVESTOR: OBAMA’S “DOE REALLY THINKS POLITICALLY BEFORE IT THINKS ECONOMICALLY”: “ ‘The DOE really thinks politically before it thinks economically and in a conversation today with [name redacted] he confirmed this (he knows Jonathan Silver – head of the DOE loan program,’ states a Dec. 7, 2010, e-mail from Steve Mitchell, managing director of venture-capital firm Argonaut and a member of Solyndra’s board of directors, to George Kaiser, an Oklahoma oil billionaire who bundled campaign donations for presidential candidate Barack Obama in 2008. Kaiser founded Argonaut, which is the major investor in Solyndra.”(Amy Harder, “QUICK TAKE: “E-mails Suggest DOE Put Politics Above Economics with Solyndra,”National Journal, 11/16/2011)

OBAMA’S DOE PRESSURED SOLYNDRA TO DELAY OF LAYOFF ANNOUNCEMENT UNTIL THE DAY AFTER THE 2010 MIDTERM ELECTION: “But in an Oct. 30, 2010 e-mail, advisers to Solyndra’s primary investor, Argonaut Equity, explain that the Energy Department had strongly urged the company to put off the layoff announcement until Nov. 3. The midterm elections were held Nov. 2, and led to Republicans taking control of the U.S. House of Representatives.” (Carol Leonnig and Joe Stephens, “Solyndra: Department of Energy ‘Pushed Hard’ for Company Not to Announce Layoffs Until after 2010 Mid-Term Elections,” The Washington Post, 11/15/2011)

DOE PRESSURE CAME AS SOLYNDRA WAS STILL DEPENDENT ON DOE FUNDING FOR THE SUBSEQUENT MONTH: “ ‘DOE continues to be cooperative and have indicated that they will fund the November draw on our loan (app. $40 million) but have not committed to December yet,’ a Solyndra investor adviser wrote Oct. 30. ‘They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd – oddly they didn‘t give a reason for that date.’”(Carol Leonnig and Joe Stephens, “Solyndra: Department of Energy ‘Pushed Hard’ for Company Not to Announce Layoffs Until after 2010 Mid-Term Elections,” The Washington Post, 11/15/2011)

Recent news reports revealed the “extraordinary efforts” taken by the Obama administration to prop up Solyndra as it faced imminent bankruptcy. Will Chu continue covering for the Obama administration, or will he own up to the Obama administration’s pattern of giving Solyndra special treatment?:

“CLEAREST PICTURE YET OF SOLYNDRA’S DETERIORATING FINANCES” AND THE “EXTRAORDINARY EFFORTS” BY OBAMA’S DOE “TO PROP UP THE COMPANY”:“The newly obtained documents, along with other records obtained in recent weeks, offer the clearest picture yet of Solyndra’s deteriorating finances and the Energy Department’s extraordinary efforts to prop up the company. Chu, who is scheduled to testify next week before a House investigating subcommittee, is likely to be questioned about his agency’s willingness to invest millions more taxpayer dollars in the firm, even after the White House had abandoned hopes of a rescue.” (Carol Leonnig and Joe Stephens, “Solyndra: Energy Department Failed to Sound Alarm as Solar Company Sank,” The Washington Post, 11/11/2011)

“ESCALATING TENSIONS” AS ADMINISTRATION “CAME TO GRIPS WITH SOLYNDRA’S LIKELY DEMISE”; DOE STAFF MOCKED FOR BOUNDLESS SOLYNDRA OPTIMISM: “By Aug. 9, with Solyndra weeks away from a bankruptcy filing, OMB career staff mocked supportive comments offered by Jonathan Silver, then the head of Energy’s loan program. Silver had been quoted in an article saying that Solyndra was ‘significantly misunderstood’ and experiencing the normal ‘bumps in the road’ for a startup company.” (Carol Leonnig and Joe Stephens, “Solyndra: Energy Department Failed to Sound Alarm as Solar Company Sank,” The Washington Post, 11/11/2011)

DESPITE WARNINGS AND LOAN RESTRUCTURING, ENERGY SEC. STEPHEN CHU AND TOP DOE OFFICIALS DOUBLED-DOWN ON SOLYNDRA: “The new loan deal was approved in February. The following month, Chu told an interviewer that Solyndra’s sales were growing, and he was ‘confident’ Solyndra would thrive and repay the public’s money.

“In April, Silver told critics that Solyndra was ‘going in the right direction’ and rapidly growing. ‘This is a company that doubled their revenues and essentially doubled them again, year over year,’ he told a trade publication. Silver resigned his post last month.” (Carol Leonnig and Joe Stephens, “Solyndra: Energy Department Failed to Sound Alarm as Solar Company Sank,” The Washington Post, 11/11/2011)

TOP OBAMA CAMPAIGN ADVISER “SUGGESTED FIRING STEPHEN CHU”: (Aamer Madhani, “Campaign Adviser Suggested Firing Stephen Chu,” USA Today, 11/12/2011) 

DÉJÀ VU? ADVISOR FEARED CHU “DIDN’T HAVE THE BACKGROUND TO DEAL WITH THE BUSINESS SIDE OF RAMPING UP THE U.S. CLEAN ENERGY INDUSTRY”: (Aamer Madhani, “Campaign Adviser Suggested Firing Stephen Chu,” USA Today, 11/12/2011)