The Solyndra Story Just Keeps Getting WorsePosted: September 18, 2011 Filed under: 2012 presidential campaign, Team Obama, U.S. Economy, U.S. Politics | Tags: 2008 presidential campaign, 2012 presidential campaign, bundlers, Department of Energy, fundraising, George Kaiser, Solyndra, Steve Spinner, The Chicago Way 3 Comments
It turns out that two major Obama 2008 fundraisers benefited from the decision by the Department of Energy to go ahead with a risky $535 million loan to Solyndra, the solar energy company that filed for Chapter 11 bankruptcy earlier this month.
Steve Spinner, who helped monitor the Energy Department’s issuance of $25 billion in government loan guarantees to renewable energy projects, was one of Obama’s top fundraisers in 2008 and is raising money for the president’s 2012 reelection campaign.
Spinner did not have any role in the selection of applicants for the loan program and, in fact, was recused from the decision to grant a $535-million loan guarantee to Solyndra Inc. because his wife’s law firm represented the company, administration officials said Friday.
But Spinner’s role as a top official in the Energy Department program, which had not been previously revealed, is likely to spur new inquiries into whether political influence played a role in the handling of the “green” energy fund. Solyndra faces a congressional probe, a criminal investigation and separate internal inquiries at the Energy and Treasury departments.
Steve Spinner raised $500,000 for the Obama campaign in 2008, and he is currently organizing a fundraising drive for 2012 called “Technology for Obama.” Spinner is also a Senior Fellow at the Center for American Progress. According to the LA Times, Spinner praised the Solyndra loan in a piece at the Center for American Progress on July 13. He did not disclose his involvement with the loan program in that article.
We’ve already heard about the second major Obama donor involved with Solyndra, George Kaiser.
The largest investments in Solyndra were funds operated on behalf of the family foundation of billionaire George Kaiser, another major fundraiser for Obama in 2008. Kaiser has denied personally investing in the solar energy company or talking to White House officials about the loan.
But I hadn’t heard before that when it looked like Solyndra might go bankrupt in February of 2011, the Obama administration restructured the loan so that in case Solyndra did go bankrupt, a Kaiser investment company and another private investor associated with the Walton family would be reimbursed before taxpayers.
Under terms of the February loan restructuring, two private investors — Argonaut Ventures I LLC and Madrone Partners LP — stand to be repaid before the U.S. government if the solar company is liquidated. The two firms gave the company a total of $69 million in emergency loans. The loans are the only portion of their investments that have repayment priority above the U.S. government.
Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. The foundation is headed by billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama’s 2008 campaign, federal election records show. Kaiser has made at least 16 visits to the president’s aides since 2009, according to White House visitor logs.
Madrone Partners is affiliated with the Walton family, descendants of Wal-Mart founder Sam Walton. Rob Walton, the eldest son of Sam Walton, contributed $2,500 last year to the National Republican Congressional Committee.
Newly released emails show the White House was worried about the likely effect of a default by Solyndra on Obama’s re-election campaign.
“The optics of a Solyndra default will be bad,” an OMB official wrote in a Jan. 31 email to a colleague. “The timing will likely coincide with the 2012 campaign season heating up.”
The budget official, whose name is blacked out in the email, wondered whether Solyndra should be allowed to restructure its loan.
“Questions will be asked as to why the administration made a bad investment, not just once (which could hopefully be explained as part of the challenge of supporting innovative technologies), but twice (which could easily be portrayed as bad judgment, or worse),” the email says.
According to conservative Chicago Tribune columnist John Kass, the “Solyndra scandal reeks of the Chicago Way.”
Federal investigators want to know what role political fundraising played in the guarantee of the questionable loan. Washington bureaucrats warned the deal was lousy. And White House spokesmen flail desperately, like weakened victims in a cheesy vampire movie.
So forget optics. What about smell? It smells bad, and it’s going to smell worse.
Or, did you really believe it when the White House mouthpieces — who are also Chicago City Hall mouthpieces — promised they were bringing a new kind of politics to Washington?
It’s the Chicago Way, but instead of a paving or trucking contract, it’s a “green” solar panel contract. The company received a $535 million loan.
I guess he means pay for play and the taxpayers get stuck with the bill. Based on what I know so far, I can’t say I disagree with Kass.
Did White House Push for $535 Million Loan to Now Bankrupt Solyndra?Posted: September 2, 2011 Filed under: Republican politics, Team Obama, U.S. Economy, U.S. Politics, unemployment | Tags: ABC News, bankruptcy, Barack Obama, Department of Energy, George Kaiser, green energy, House Energy Committee, Job Creation, jobs, layoffs, Rep. Fred Upton (R-MI), solar energy, Solyndra, stimulus bill, unemployment 18 Comments
Minkoff Minx highlighted this story earlier today, but I thought I’d expand on it a little bit. As Minx wrote earlier, Solyndra is a solar energy company that the Obama admnistration has hyped as an example of the potential of green energy technology to create jobs in the U.S. From the LA Times editorial page:
Solyndra was the first company to be awarded a federal loan guarantee under the stimulus, worth $535 million. Taxpayers are likely to end up on the hook for much if not all of that amount, a highly embarrassing development for President Obama because he was among the company’s biggest cheerleaders. He visited its Fremont plant in May 2010 even though PricewaterhouseCoopers had weeks earlier raised doubts about its plans for an initial public offering by questioning whether it could continue as a going concern.
That’s especially troubling because Solyndra is backed by one of Obama’s key fundraisers, George Kaiser of Tulsa. Congressional Republicans were raising alarms about Obama’s connections to Solyndra well before Wednesday’s announcement, with GOP members of the House Energy and Commerce Committee voting in July to subpoena documents from the Office of Management and Budget on the loan-guarantee decision.
Two important questions are raised by Solyndra’s failure: Should the government be in the business of picking winners and losers by providing loan guarantees to risky energy ventures? And is Obama using stimulus funds to reward his political contributors?
The Times says “yes” to the first question and “maybe” to the second, pending the results of the House investigation.
As the LA Times noted, questions were being asked about the Solyndra loan even before the bankruptcy announcement. Brian Ross and his colleagues at ABC News have also been looking into the White House connection.
ABC News and the Center for Public Integrity’s iWatch News first reported on questions about the choice of Solyndra for the loan in May after the Department of Energy disclosed it was being forced to restructure its loan package for the company, which was showing early signs of financial distress. 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.
Following the ABC News and iWatch News reports, the House Energy and Commerce Committee opened their own investigation into the loan and into the Kaiser link, which Stearns office said in a statement “raised concerns that politics may have played a role in putting taxpayer dollars at risk making this loan guarantee.” ….
White House officials deferred ABC News’ request for comment on this report to the Department of Energy. There, officials told ABC News and iWatch News that it used objective factors in selecting Solyndra. The department released a statement Wednesday on its website blaming changing economics in the industry — including a major push by Chinese firms to drive down solar panel prices — for the company’s collapse along with two other domestic firms. According to the Energy Department, the price for solar products dropped 42 percent in 2011.
I don’t know why anyone would be surprised to learn that Obama was using government money to help his big donors. Isn’t that what he’s been doing with Wall Street since the fiscal crisis began? Even before he was elected, Obama whipped for TARP. If he hadn’t convinced members of the Congressional Black Caucus to vote for it, the bailout bill never would have passed. So now Republicans control the House, and they can’t wait to investigate.
House Energy Committee Chair Fred Upton (R-MI) sent a letter to the White House
which calls on the White House to turn over correspondence between administration officials, Solyndra and its investors….”How did this company, without maybe the best economic plan, all of a sudden get to the head of the line?” Upton told ABC News in an interview this week. “We want to know who made this decision … and we’re not going to stop until we get those answers.”
The White House denies any involvement in the approval of the loan, although members of the administration have enthusiastically and publicly praised it. Yet more neutral observers have been critical of the deal.
While Energy Department officials steadfastly vouched for Solyndra — even after an earlier round of layoffs raised eyebrows — other federal agencies and industry analysts for months questioned the viability of the company. Peter Lynch, a longtime solar industry analyst, told ABC News the company’s fate should have been obvious from the start.
“Here’s the bottom line,” Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.”
Furthermore, OMB considered the loan to be “risky,” according to ABC News.
The White House’s Office of Budget and Management viewed the arrangement as a riskier bet to taxpayers than DOE had. That forced the government to set aside millions more in case of a default, iWatch reported last month.
I guess we’ll have to wait and see what happens, but I can only assume that Republicans in the House are going to be on this like white on rice. They hate Obama and they hate green energy.