14 September 2011

Solyndra Saga Continued: Did Obama Aides Grease the Wheels?

Solyndra Tubes
The Solyndra saga just gets worse every day. 

This morning, The Washington Post reported that it had obtained emails from August 2009, that allegedly ask the Office of Management and Budget (OMB) reviewers to expedite the federal loan in advance of a press event announcing the deal.

OMB officials apparently expressed concerns about being rushed to approve the company for the loan without adequate time to assess the risk.

Bloomberg also reported on the emails this morning, noting that one email from an OMB official to a colleague in March 2009, which was earlier in the process for Solyndra's approval, claimed "This deal is NOT ready for prime time."

"Solyndra was the first loan guarantee issued by the Obama Administration using stimulus dollars.  Administration officials held out the company as a glowing example of how the stimulus was creating jobs and invigorating the economy," said the Honorable Cliff Stearns of the House Energy & Commerce Committee.  The Committee opened its hearings on the Solyndra DOE deal this morning.

"However, just two years after receiving this half of a billion dollar loan guarantee, and six months after DOE restructured the terms of the deal, Solyndra has closed its doors, laid off over a thousand workers, and filed for bankruptcy. Last week, FBI agents raided the facility. million loan guarantee to Solyndra," opined Stearn in his prepared statement.

One email between DOE staff dated August 19, 2009, which is quoted in a slide show developed by the House Committee, reads
 "we still have a major outstanding issue . . . . The issue of working capital assumptions has been a major issue repeatedly raised since December [2008]."
Another from the following day says,
"The issue of working capital remains unresolved. . . . the issue is cash balances, not cost. [Solyndra] seems to agree that the model runs out of cash in Sept. 2011 even in the base case without any stress. This is a liquidity issue."
Solyndra filed for Chapter 11 last month and laid off over 1,000 employees.

"If Solyndra really is the 'litmus test for the loan guarantee program's ability to fund good projects quickly,' as DOE's stimulus advisor called it in an email to DOE officials," Stearn wrote in his prepared remarks. "I am  very concerned about where the $10 billion DOE has left to spend before the September 30 deadline is going."

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