With National Debt Surpassing $16 Trillion, “No More Solyndras Act” Needed Now More Than Ever To Protect Taxpayer Dollars
WASHINGTON, DC – Today, the House of Representatives will vote on the Energy and Commerce Committee’s “No More Solyndras Act,” H.R. 6213. The legislation was authored by full committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL), drawing upon the lessons of the committee’s investigation into the Department of Energy’s (DOE’s) $535 million loan guarantee to Solyndra, the California solar panel manufacturer that ultimately went bankrupt last September.
Here are some of the startling facts discovered during the committee’s investigation into the Obama administration’s highly touted stimulus “success story”:
1) The White House ignored its own experts’ warnings.
The administration was warned that Solyndra was a bad bet from the beginning. One Obama administration Office of Management and Budget (OMB) employee wrote in an email in March of 2009 that the Solyndra “deal is NOT ready for prime time.” Another DOE employee prophetically warned that Solyndra would be out of cash in September 2011 – the exact month that the company was raided by the FBI and its doors were shuttered.
2) Solyndra’s rushed approval was for a previously scheduled press event.
Documents obtained by the committee show the White House rushed to approve the loan in spite of the warning signs to coincide with the press event for Solyndra’s groundbreaking. An e-mail between OMB staff noted, “Given the time pressure we are under to sign-off on Solyndra, we don’t have time to change the model…” As scheduled, Vice President Biden appeared via satellite at the groundbreaking ceremony just days later and touted Solyndra’s ability to create “permanent jobs.”
3) DOE failed to monitor Solyndra’s financial condition.
While a 2010 SEC filing showed Solyndra had never reported a profit, was experiencing negative cash flows, and had cancelled a $300 million initial public stock offering, the DOE failed to adequately monitor Solyndra’s financial condition. After this filing, and after Solyndra laid off employees, Republican members on the House Energy and Commerce Committee began asking questions about the Solyndra loan. Solyndra later attempted to mislead members of the committee by producing a document in July of 2011, entitled “Exceeding Expectations: Solyndra Today” that claimed the company’s financial condition was improving.
4) The Obama administration stonewalled the committee’s investigation.
After OMB’s refusal to provide any of its communications and internal documents regarding Solyndra, the Subcommittee on Oversight and Investigations was forced to issue a subpoena in July 2011, for documents pertaining to the loan. Four months later, after the White House refused to respond to the committee’s request for documents, the committee issued two subpoenas to President Obama’s and Vice President Biden’s Chiefs of Staff for Solyndra-related documents.
5) Solyndra went belly up precisely when predicted.
On September 6, 2011, Solyndra, the company that President Obama heralded as “leading the way toward a brighter and more prosperous future,” filed for bankruptcy, resulting in the loss of nearly 1,900 jobs. Just 2 days later on September 8, 2011, the FBI raided the Fremont, California company. Regrettably, the bankruptcy wouldn’t have come as a surprise to the Obama administration. In an August 2009 email, DOE staff warned that Solyndra would be out of cash in September 2011: “(T)he issue is cash balances… (T)he model runs out of cash in September 2011 even in the best case…” (See Footnote 191 for The Solyndra Failure HERE.)
6) No regrets.
In an interview on October 3, 2011, ABC News asked President Obama whether he had any regrets over the Solyndra deal. The president replied, “No I don’t,” and simply that, “hindsight is always 20-20.” Several months later the president doubled down on deflecting responsibility for Solyndra’s failure by stating, “But understand: This was not our program, per se.” Even as recently as July of 2012, the Acting Executive Director of the DOE Loan Program Office called the program responsible for Solyndra an “enormous success.”
7) The Department of Energy’s restructuring of the Solyndra loan violated the law.
The committee’s investigation discovered that DOE knowingly violated the law when it restructured the terms of the loan guarantee and put the interests of wealthy investors ahead of taxpayers. The committee also found DOE employed the “Clinton Defense” in distorting the definition of the word “is” in the statute to legally justify subordination. OMB’s oversight and review of Solyndra’s restructuring occured under then-director, now White House Chief of Staff Jack Lew’s tenure. Despite warnings from an agency analyst that saving Solyndra could cost taxpayers more than allowing the solar company to fail, Lew failed to stop the restructuring when he had the opportunity. (See section VII of The Solyndra Failure HERE.)
8) It wasn’t just Solyndra.
Documents obtained by the committee exposed a startling relationship between Solyndra and another stimulus-backed project. Solyndra was a key supplier for Prologis’ Project Amp, a solar panel installation project and the recipient of a partial loan guarantee for $1.4 billion. The committee’s investigation showed the White House was well aware of Solyndra’s deteriorating financial condition when it allowed DOE to move forward with Project Amp. DOE would later use the relationship between Project Amp and Solyndra as a key bargaining tool to push for a second restructuring while directly engaging in last minute negotiations between Solyndra and the Project Amp sponsor. Additionally, other DOE loan guarantee recipients under the same loan guarantee program have either failed or are running out of cash. It is this program that the “No More Solyndas Act” phases out.
9) Solyndra backers had close political connections to the White House.
As reported by ABC News, “One of Solyndra’s major investors was George Kaiser, an Oklahoma billionaire who raised between $50,000 and $100,000 for Obama during the 2008 election.” ABC also reported that “Kaiser is one of several Obama campaign supporters who had a stake in companies that later received federal loans…” George Kaiser was closely involved in important decisions related to Solyndra through the life of the loan guarantee. According to the committee’s report, “Individuals connected to the George Kaiser Family Foundation (GKFF) — whose primary investment arm, Argonaut, was Solyndra’s largest shareholder — played important roles in a series of critical discussions and negotiations with DOE. George Kaiser, whose fortune funds the GKFF, 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.” (See page 4-5 of The Solyndra Failure HERE)
10) As Solyndra’s bankruptcy unfolds, it’s like rubbing salt into the taxpayers’ wound.
While American taxpayers are stuck footing the bill for the Solyndra failure, Solyndra’s private investors, including George Kaiser, now stand to gain hundreds of millions of dollars in tax breaks from Solyndra’s bankruptcy.
For more information on the “No More Solyndras Act,” click here.
To view the committee report, The Solyndra Failure, click here.
To view The Solyndra Failure’s supporting documents, click here.