Solyndra is an example of the risk of the government playing investor, the report said. E&C GOP reheats Solyndra furor

Republicans on the House Energy and Commerce Committee released a 154-page majority staff report Thursday on their nearly 18-month Solyndra investigation, concluding that officials in the Obama administration had ignored warning signs about the California solar manufacturer’s perilous financial conditions and then “were willing to take extraordinary measures in order to keep the company afloat.”

But at first glance, the report didn’t appear to back up some of the more lurid accusations that Republicans have made about the Solyndra affair in campaign ads, including Mitt Romney’s claims that money for Solyndra went to “campaign contributors” or “friends and family.”


Still, Republicans said the affair raises troubling questions about President Barack Obama’s energy stimulus efforts. And if nothing else, the report is sure to generate more of the kind of headlines that GOP groups can feature in TV commercials in swing states.

“Solyndra is a prime example of the perils that come when the federal government plays investor, tries to keep a company and industry afloat with subsidies and attempts to pick the winners and losers in a particular marketplace,” says the House report, which is called “The Solyndra Failure.” It adds: “Policy and political pressures inevitably come into play to the detriment of taxpayers, as it did with Solyndra.”

The White House countered that the report fails to show that the administration made its decisions about Solyndra based on anything but the merits, despite an exhaustive investigation that cost an untold amount of money.

“This is month 18 of this congressional investigation and everything disclosed in the 215,000 pages of documents, 14 committee staff briefings, five congressional hearings, 72,000 pages from Solyndra investors and committee interview with [Solyndra investor] George Kaiser, affirms what we said on day one: This was a merit based decision made by the Department of Energy,” White House spokesman Eric Schultz said in a statement. “As Republicans won’t answer how much [the] investigation has cost taxpayers, we believe they should instead be focused on legislation to creat[e] jobs and grow the economy.”

Schultz then outlined a series of administration-backed economic initiatives that the House has failed to act on.

Obama campaign spokesman Adam Fetcher referred questions about the report to the White House.

House Energy and Commerce Committee Democrat Ed Markey also attacked the report, calling it part of a GOP “one-two punch” against clean energy — with the other punch being Romney’s opposition to extending a key tax credit for wind power.

“The Solyndra investigation hasn’t uncovered a scandal, but instead has created a symbol for Republicans to appease their fossil fuel fundraisers and eliminate competition for oil, coal and nuclear energy,” the Massachusetts representative said in a statement.

In turn, the committee report slams the panel’s Democrats for not having scrutinized the Solyndra deal when they held the majority.

“Those two years, from 2009 through 2010, were a critical time for Solyndra and for the Loan Guarantee Program as a whole,” the report says, adding that Democrats “did not ask a single question regarding Solyndra, the first recipient of a loan guarantee under that program, even after Solyndra’s auditor issued a letter in March 2010 questioning the company’s ability to continue operating or after Solyndra laid off over 150 employees and closed one of its manufacturing facilities in the fall of 2010.”

In Thursday’s findings, the Republicans wrote that “this report conclusively shows that DOE pushed forward with the guarantee despite these warnings because of the Obama administration’s desire to use the Solyndra guarantee to highlight its stimulus.”

It also highlights a major GOP theme — the role of Kaiser, an Obama bundler whose investment firm was Solyndra’s largest private shareholder — though without pointing to any specific quid pro quo between him and the administration.

“George Kaiser … was closely involved in financial decisions related to Solyndra, often authorizing key disbursements and restructuring proposals, as well as in Solyndra’s lobbying, public relations, and government procurement strategies in Washington,” the report says, adding that “the White House chief of staff’s office and others in the White House were aware that Mr. Kaiser, a bundler for President Obama’s 2008 campaign, was the primary investor in Solyndra.”

The report concedes that while “key decision-makers at DOE” knew about Kaiser’s role, they “primarily followed established ‘communication channels’ when discussing issues related to the loan guarantee.”

Republicans were also not able to prove from their review of internal documents that White House and Energy Department officials had discussed the idea of delaying a major Solyndra layoff announcement until just after the 2010 midterm elections. But the GOP report still insists that the Obama administration reached out to Solyndra.

"What is known is that someone from DOE asked Solyndra to delay the planned announcement until Nov. 3, 2010, the day after the 2010 midterm elections," the report says, citing emails detailing a conference call between Solyndra officials and the company's investors.

And a Justice Department inquiry into that question is still ongoing, the report says. According to the Republicans, DOJ's Kim Berger told House aides last week that "DOJ's investigation was active, and that she could not provide any other information."

Among other tidbits in the report:

• Republicans released a November 2010 internal email from Ron Klain, who was then chief of staff to Vice President Joe Biden, to an unnamed journalist about the risks from the DOE loan guarantee program. According to the email, which Republicans were allowed to review in person but not make a copy of, Klain said the challenge involved picking which companies should win a loan guarantee.

“If you loan money to people doing super risky things, like Solyndra (a plant to build a new kind of solar collector never used before) there’s some chance (a decent chance) you won’t get paid back,” he wrote. “If you loan money to people doing proven (but larger) things like [REDACTED], folks argue, ‘hey, that’s just an old technology, those guys could get bank funding if they really tried to.’ So on loan guarantees, you are searching for Goldilocks projects — too risky for the banks, but safe enough to have a high likelihood of repayment. That’s a pretty narrow fit.”

• The report includes excerpts from a December 2010 email from OMB associate director Sally Ericsson warning Carol Browner and other top White House aides about Solyndra’s shaky finances while DOE negotiated changes to the terms of the company's loan guarantee.

“I’m sure you already know this. Negotiations are fluid. DOE has shared with us (and Treasury) that Solyndra is in the midst of a severe liquidity crisis,” Ericsson wrote. “In its negotiations with Solyndra investors regarding potential restructuring options, DOE has created a deadline of THIS FRIDAY that may precipitate a meltdown that would likely be very embarrassing for DOE and the Administration.” Republicans noted the email was sent the same day DOE attorneys were meeting to discuss the loan guarantee's restructuring.

• The report says that “it is interesting to note the amount of time OMB spent reviewing the Solyndra deal compared to other DOE loan guarantees.” It quotes an Oct. 25, 2010, White House memo as saying that “the average OMB review time for DOE loan guarantees processed after Sept. 1, 2009, was 28 calendar days.” But the report estimates that “OMB’s review of Solyndra took a mere 9 days, even though it was the first DOE loan guarantee ever made, and thus should have been given more review time, not less.”

• The report provides evidence — previously highlighted on conservative news websites — that Solyndra company officials felt Obama had their backs, even though it was unclear whether their beliefs were actually correct. “The Bank of Washington continues to help us!” then-CEO Chris Gronet wrote in an October 2009 email quoted in the report.



This article first appeared on POLITICO Pro at 11:15 a.m. on August 2, 2012.