OMB Analyst Had Warned Saving Solyndra Could Cost Taxpayers More Than Allowing it to Fail - Sitting WH Chief of Staff Jack Lew Allowed Solyndra’s Sweetheart Restructuring to Proceed, Costing Taxpayers Millions of Dollars
WASHINGTON, DC – Today marks one year since Solyndra, once the Obama administration’s highly touted stimulus “success story,” filed for Chapter 11 bankruptcy. The recipient of a $535 million DOE loan guarantee, Solyndra serves as a stark reminder of the Obama administration’s misguided priorities and failed stimulus economy. The Energy and Commerce Committee’s 18-month investigation revealed that Obama administration officials knew Solyndra was a bad bet from the beginning, but the White House ignored the warnings and rushed through the loan as part of a broader public relations plan to prop up President Obama’s stimulus spending. Just as the administration experts predicted, the solar panel company ran out of cash in September and was forced to declare bankruptcy and lay off nearly 1,900 workers.
The committee’s investigation also found DOE knowingly violated the law when it restructured the terms of the loan guarantee and subordinated taxpayers’ interest to the interests of private investors. OMB’s oversight and review of Solyndra’s restructuring also failed 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.)
Now, one year later, it turns out Solyndra’s investors, including top Obama supporter George Kaiser, got a much better deal than previously understood. According to court documents filed this week, Solyndra’s investors stand to gain up to $341 million in tax breaks from Solyndra’s bankruptcy. This follows a recent Wall Street Journal report warning Solyndra could amount to a near total loss for taxpayers.
“One year after Solyndra filed for bankruptcy, we continue to learn the ugly truth of Solyndra’s sweetheart restructuring deal. With Solyndra’s investors potentially emerging from bankruptcy with over $300 million in tax breaks while taxpayers will see over half a billion dollars in losses is the harshest of reminders that Solyndra was a bad bet from day one and the Obama administration let us all down. What’s worse, White House Chief of Staff Jack Lew, then-Director of OMB, had a chance to stop DOE’s misguided restructuring, and he failed to heed his own analysts’ warnings. Our investigation showed White House officials ignored numerous red flags in the pursuit of fawning headlines, and taxpayers are sadly paying the price. Our No More Solyndras Act will put an end to DOE’s mismanaged loan guarantee program once and for all, a program the Obama administration was unprepared to lead,” said Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL).