The Obama White House tried to rush federal reviewers for a decision on a nearly half-billion-dollar loan to the solar-panel manufacturer Solyndra so Vice President Biden could announce the approval at a September 2009 groundbreaking for the company’s factory, newly obtained e-mails show.
The Silicon Valley company, a centerpiece in President Obama’s initiative to develop clean energy technologies, had been tentatively approved for the loan by the Energy Department but was awaiting a final financial review by the Office of Management and Budget.
The August 2009 e-mails, released exclusively to The Washington Post, show White House officials repeatedly asking OMB reviewers when they would be able to decide on the federal loan and noting a looming press event at which they planned to announce the deal. In response, OMB officials expressed concern that they were being rushed to approve the company’s project without adequate time to assess the risk to taxpayers, according to information provided by Republican congressional investigators.
Solyndra collapsed two weeks ago, leaving taxpayers liable for the $535 million loan.
One e-mail from an OMB official referred to “the time pressure we are under to sign-off on Solyndra.” Another complained, “There isn’t time to negotiate.”
“We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week),” one official wrote. That Aug. 31, 2009, message, written by a senior OMB staffer and sent to Terrell P. McSweeny, Biden’s domestic policy adviser, concluded, “We would prefer to have sufficient time to do our due diligence reviews.”
White House officials said Tuesday that no one in the administration tried to influence the OMB decision on the loan. They stressed that the e-mails show only that the administration had a “quite active interest” in the timing of OMB’s decision.
“There was interest in when a decision would be made because of its impact on whether an event involving the vice president could be scheduled for a particular date or not, but the loan guarantee decision was merit-based and made by career staffers at DOE,” White House spokesman Eric Schultz said.
Solyndra spokesman David Miller said he was unaware of any direct involvement of the White House in securing or accelerating the loan.
The e-mail exchanges could intensify questions about whether the administration was playing favorites and made costly errors while choosing the first recipient of a loan guarantee under its stimulus program. Solyndra’s biggest investors were funds operated on behalf of the family foundation of Tulsa billionaire and Obama fundraiser George Kaiser. Although he has been a frequent White House visitor, Kaiser has said he did not use political influence to win approval of the loan.
The White House has previously said that it had no involvement in the Solyndra loan application and that all decisions were made by career officials based on the merits of the company.
Republican investigators for the House Energy and Commerce Committee, which is holding a hearing about Solyndra on Wednesday, concluded that the White House set a closing date for the OMB approval even before the OMB review had begun.
The White House pressure may have had a “tangible impact” on the OMB’s risk assessment of the loan, the congressional investigators concluded.
In one e-mail, an OMB staff member questioned whether the review team was using the best model for determining the financial risk to taxpayers in evaluating the Solyndra deal.
“Given the time pressure we are under to sign-off on Solyndra, we don’t have time to change the model,” the staffer wrote.
Solyndra was a favorite of the administration until two weeks ago, when the company abruptly shuttered its factory and filed for bankruptcy court protection, leaving 1,100 people out of work and taxpayers on the hook for the loans. Last week, FBI agents searched the company’s Silicon Valley headquarters in a raid that Miller said appeared linked to the loan guarantee.
In one e-mail, an assistant to Rahm Emanuel, then White House chief of staff, wrote on Aug. 31, 2009, to OMB about the upcoming Biden announcement on Solyndra and asked whether “there is anything we can help speed along on OMB side.”
An OMB staff member responded: “I would prefer that this announcement be postponed. . . . This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right.”
In another message, a White House staff member wrote that officials were “walking a fine line with Solyndra needing to begin notifying investors to fly in” for the groundbreaking. It stressed that “this OMB piece” of the review was not final and pointed out that if word of the groundbreaking leaked to the public prematurely, that would “leave us in an awkward place.”
The e-mails also raise questions about whether the administration should have foreseen financial trouble. In August 2009, e-mail exchanges between Energy Department staff members pointed out that a credit-rating agency predicted that the project would run out of cash in September 2011. Solyndra shut its doors on the final day of August.
The House committee has been investigating Solyndra’s dealings with the Energy Department for six months. In July , subcommittee members subpoenaed White House documents related to the guarantee.
Questions about the selection process were first raised in a July 2010 audit by the Government Accountability Office. It concluded that the Energy Department “lacked appropriate tools for assessing the progress” of the loan program and that the department treated applicants inconsistently, “favoring some applicants and disadvantaging others.”
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), chairman of that panel’s oversight and investigations subcommittee, said last week that the FBI raid confirmed their belief that the “darling” of Obama’s green-jobs program was a “bad bet” from the beginning.
“Solyndra was the hallmark of the President’s green jobs program and widely promoted by the administration as a stimulus success story, right up until its bankruptcy and FBI raid,” Upton and Stearns said in a statement on Tuesday. “Let’s learn the lessons of Solyndra before another dollar goes out the door.”
Rep. Henry A. Waxman (Calif.) and Rep. Diana DeGette (Colo.) — Democrats on the committee who had once defended the choice of Solyndra — last week also questioned whether they had been misled. In a letter, they wrote that Solyndra chief executive Brian Harrison “did not convey to us the perilous condition of the company, and the Committee should know why. ”