President Obama’s involvement with the bad loan to Solyndra LLC, the now-bankrupt solar energy company, has congressional investigators suggesting that “wealthy campaign donors had [a] direct line to [the] West Wing.”
House Commerce Committee chairman Fred Upton, R-Mich., and Rep. Cliff Stearns, R-Fla., have announced they they will expand the Solyndra investigation to explore White House ties to the Energy Department’s loan to Solyndra. They have requested all White House documents pertaining to the Solyndra loan since President Obama’s inauguration.
Stearns, House Oversight and Investigations Subcommittee Chairman, said in a statement that “top advisers [to President Obama] like Valerie Jarrett, Larry Summers, and Ron Klain had direct involvement in the Solyndra mess.” Stearns added that “documents reveal a startlingly cozy relationship between wealthy donors and the President’s confidantes, especially in matters related to Solyndra.” Notably, President Obama used that same “cozy relationship” phrase after last year’s energy embarrassment, the Deepwater oil spill, to explain the relationship between regulators and oil industry companies – and to explain the breakdown of oil industry oversight.
White House Press Secretary Jay Carney blamed Energy Secretary Steven Chu and “career professionals” for the $535 million loan guarantee, but Stearns quoted Office of Management and Budget emails in a letter to White House counsel that might have counteracted the Department of Energy’s activities. The same day that Klain and Jarrett recognized “some risk factors involved” in the loan but concluded, in Jarrett’s words, “I’m comfortable if you’re comfortable,” OMB staffers suggested that the Solyndra loan “could prove embarrassing to the Administration in the not too distant future.”
The congressional letter to White House counsel notes that OMB staff cautioned against restructuring Solyndra’s loan. “[W]hile the company may avoid default with a restructuring, there is also a good chance that it will not,” an OMB staffer wrote in a January 2011 email, adding that if the company failed after a restructuring, “additional funds would have been put at risk, recoveries may be lower and questions will be asked.” The Solyndra loan was eventually restructured in a way that placed the government last in a line of creditors that included the Solyndra’s investment partners, one of which is owned by George Kaiser, a major fundraiser for President Obama.
According to the congressional letter, an OMB staffer also said that the “[Department of Energy’s] ‘system’ for monitoring loans is quite problematic” because of, among other weaknesses, “barely any review of materials submitted.” The OMB staffer also wrote that such a monitoring process “does not seem to be a program priority.” Energy Secretary Chu reportedly made a point to “get the money out fast” to renewable energy companies such as Solyndra. Reportedly, the Department of Energy was willing to give Solyndra yet another loan, exceeding $400 million, when the company’s financial outlook appeared increasingly bleak.
The Energy Department loan guarantee program, under Secretary Chu, has continued to provide loan guarantees to solar companies, including one company that includes a member of Solyndra’s board of directors as a “board participant.”
You can read the letter to White House Counsel below.
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