Dems Shuffled Solyndra Deck to Put Bundlers First, Taxpayers Last

November 3, 2011

More Detailed Timeline Shows Obama Administration Bent Over Backwards to Favor Investors and Campaign Bundlers, Leaving Taxpayers Holding the Bag

Newly released Solyndra e-mails show that an aide to Vice President Joe Biden sought information on the now-bankrupt company’s private investors, and within days of the Biden inquiry Solyndra raised $75 million from investors, including a major Obama campaign fundraiser. The Obama administration then restructured the stimulus-funded taxpayer loan to Solyndra to put these investors first and taxpayers last in getting paid back when Solyndra went bankrupt.
Just months after the Obama administration restructured Solyndra’s loan, the administration seriously considered a taxpayer bailout for the company that would have turned Solyndra’s $535 million taxpayer loan into stock in the floundering company and put two officials appointed by the Energy Department on the company’s board of directors.
As the Obama administration was considering going all-in on Solyndra, however, the company’s executives were getting out—fast. Just months before filing bankruptcy, Solyndra authorized a golden parachute for its CEO and hundreds of thousands of dollars in bonuses for its other top executives.

BACKGROUND

Newly released Solyndra e-mails show that an aide to Vice President Joe Biden sought information on the now-bankrupt company’s private investors, and within days of the Biden inquiry Solyndra raised $75 million from investors, including a major Obama campaign fundraiser. The Obama administration then restructured the stimulus-funded taxpayer loan to Solyndra to put these investors first and taxpayers last in getting paid back when Solyndra went bankrupt:

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)

LEGALITY OF RESTRUCTURING PLAN IN DOUBT:

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)

OBAMA’S DEPT. OF ENERGY “WAS ACTIVELY PUSHING” A 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)

Just months after the Obama administration restructured Solyndra’s loan, the administration seriously considered a taxpayer bailout for the company that would have turned Solyndra’s $535 million taxpayer loan into stock in the floundering company and put two officials appointed by the Energy Department on the company’s board of directors:

OBAMA ADMIN CONSIDERED A TAXPAYER BAILOUT FOR SOLYNDRA: “Days before a solar panel maker collapsed, the Obama administration considered a bailout that would have provided an infusion of cash and a new board of directors, including two directors appointed by the Energy Department.” (Matthew Daly, “Obama Admin Considered Bailout for Solyndra,” Associated Press, 11/2/2011)

BUY LOW, SELL LOWER? BAILOUT PLAN WOULD HAVE CONVERTED SOLYNDRA DEBT TO TAXPAYERS INTO 40 PERCENT STAKE IN THE FAILING COMPANY: “A last-ditch plan considered by the Energy Department to save Solyndra LLC would have converted U.S. debt to equity of as much as 40 percent in the California solar- panel maker, according to Obama administration e-mails.” (Jim Snyder, “Rejected Solyndra Refinancing Called for U.S. Debt to Equity,” Bloomberg, 11/2/2011)

PLAYING VENTURE CAPITALIST: OBAMA ADMINISTRATION WOULD HAVE BEEN GIVEN TWO SEATS ON SOLYNDRA’S BOARD OF DIRECTORS IN EXCHANGE: “The department also would have been given two seats on Solyndra’s board, according to the e-mails turned over today to a congressional committee investigating the collapse of Solyndra, which filed for bankruptcy after receiving $535 million in U.S. loan guarantees.” (Jim Snyder, “Rejected Solyndra Refinancing Called for U.S. Debt to Equity,”Bloomberg, 11/2/2011)

As the Obama administration was considering going all-in on Solyndra, however, the company’s executives were getting out—fast. Just months before filing bankruptcy, Solyndra authorized a golden parachute for its CEO and hundreds of thousands of dollars in bonuses for its other top executives:

“FORMER SOLYNDRA CEO GOT $467K SEVERANCE”: “New court documents show the founder and former CEO of solar panel maker Solyndra Inc. negotiated a severance package worth almost half a million dollars.” (Randall Chase, “Former Solyndra CEO Gets $456K Severance,” Associated Press, 11/2/2011)

SOLYNDRA CEO NEGOTIATED SEVERANCE IN JULY 2011, TWO MONTHS BEFORE SOLYNDRA ANNOUNCED HIS FIRING: “Documents the company filed in bankruptcy court in Delaware also show the executive, Chris Gronet, was terminated July 1, almost two months before Solyndra announced he was leaving.” (Randall Chase, “Former Solyndra CEO Gets $456K Severance,” Associated Press, 11/2/2011)

MORE THAN A DOZEN OTHER SOLYNDRA EXECUTIVES RECEIVED “HEFTY BONUSES” THIS SUMMER, JUST MONTHS BEFORE FILING FOR BANKRUPTCY:“Senior executives at Solyndra collected hefty bonuses — ranging from $37,000 to $60,000 apiece — as the Fremont company bled cash and careened toward bankruptcy this summer.

“Bankruptcy documents filed in Delaware earlier this week reveal that more than a dozen senior executives at the defunct solar-manufacturing company were awarded sizable quarterly bonuses on April 15 and again on July 8. Solyndra ceased operations in late August and filed for bankruptcy Sept. 6. About 1,100 employees were laid off without severance pay.” (Dana Hull, “Solyndra Executives Collected Hefty Bonuses in Months Before Fremont Company Filed for Bankruptcy,” San Jose Mercury News, 11/2/2011)

MEANWHILE, WHITE HOUSE REFUSES TO RELEASE COMMUNICATIONS FROM PRESIDENT OBAMA, TOP OFFICIALS ON SOLYNDRA LOAN: “The White House will not comply with requests to turn over documents related to the bankrupt solar company Solyndra, which received a $535 million loan guarantee from the federal government, CNN learned Friday.” (Jessica Yellin, “FIRST ON CNN: Source: White House Will Not Turn Over All Solyndra Documents,” CNN, 10/14/2011)