AP on Solyndra: WH ignored at least three watchdog reports criticizing Energy Department’s loan controls

posted at 10:14 pm on September 15, 2011 by Allahpundit

That’s not all they ignored, either. According to e-mails obtained by the AP, one White House official who helped plan Obama’s big photo op at the plant earlier this year dismissed a news story about Solyndra’s financial troubles with, “Seems B.S.” A few months earlier, the same chump ignored the alarm bells being rung by accounting firms and instead accepted at face value Solyndra’s assurances that they were doing well, writing, “Fantastic to hear that business is doing well — keep up the good work! We’re cheering for you.”

Everyone knew the company was toast. Except the people in charge of your money.

A 2009 report by the Energy Department’s inspector general warned that the DOE lacked the necessary quality control for the loan guarantee program, which was created in 2005 to support clean-energy projects that could not obtain conventional bank loans due to high risks.

In July 2010, the Government Accountability Office said the Energy Department had bypassed required steps for funding awards to five of 10 applicants that received conditional loan guarantees.

The report did not publicly identify the companies that were not properly vetted, but congressional investigators say one of them was Solyndra. The company was the first to receive a loan guarantee after the program was expanded under the 2009 stimulus law.

In March, DOE Inspector General Gregory Friedman again faulted the loan program for poor record keeping. A report by Friedman said the program “could not always readily demonstrate, through systematically organized records … how it resolved or mitigated relevant risks prior to granting loan guarantees.” According to the report, the department kept limited or no electronic data on 15 of 18 loan guarantees examined.

Another official tells the AP that that FBI raid of Solyndra last week is indeed related to a fraud investigation into whether the company lied to federal officials about the state of its financial health. I wonder: Can you be guilty of fraud if the truth was staring your victim in the face the entire time, to the point where where two minutes of googling trade-news articles about the company would have revealed the depth of the problem? At what point does the victim’s idiocy/recklessness become an affirmative defense?

Via Andrew Stiles at NRO, here’s another new e-mail from January of this year illustrating why I’m amazed the White House would take the political risk of first throwing half a billion dollars at Solyndra and then agreeing to restructure the loan on less favorable terms to keep the company going awhile longer. Even their own OMB guys saw the iceberg coming. Why didn’t the Energy Department turn the ship when it had a chance?

Although the decision has already been made for OMB not to play an active role in determining what to do with Solyndra, the Director/S-1 meeting tomorrow might present an opportunity to flag to DOE at the highest level the stakes involved, for the Secretary to do as he sees fit (and be fully informed and accountable for the decision). Although optics are generally out of our lane, it may be worthwhile for the Director to privately make this point to the Secretary:

Given the PR and policy attention Solyndra received since 2009, the optics of a Solyndra default will be bad whenever it occurs. While the company may avoid default with a restructuring, there is also a good chance it will not. If Solyndra defaults down the road, the optics will arguably be worse later than they would be today. At that point, additional funds have been put at risk, recoveries may be lower, and question 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 support innovate technologies), but twice (which could easily be portrayed as bad judgement, or worse). In addition, the timing will likely coincide with the 2012 campaign season heating up, whereas a default today could be put in the context of (and perhaps even get some credit for fiscal discipline / good government because the Administration would be limiting further taxpayer exposure) letting bad projects go, and could make public steps it is taking to learn lessons and improve / limit future lending.

Even more incredibly, this wasn’t the only federal loan that Solyndra applied for,either. L.A. Observed dug around in the company’s S-1 SEC filing and found that they had applied for a second loan for $469 million in September 2009. The first part of their application was approved; it’s unclear what happened after they filed the second part, whether the Energy Department rejected it or Solyndra withdrew it. Presumably it’s the latter or else we’d be hearing “at least we got the second loan application right!” from Jay Carney non-stop.

Here’s one more piece for your evening Solyndra reading. I’ll leave you with this excerpt:

Solyndra spokesman David Miller also did his share of glad-handing with the White House aides handling Obama’s trip.

“If you tire of the White House life and ever decide you want to move out with your best friends in [California] let me know,” Miller emailed to White House special assistant Johanna Maska the day after the visit. He added that “we could find you a great corporate gig very quickly.”

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I’m amazed the White House would take the political risk of first throwing half a billion dollars at Solyndra and then agreeing to restructure the loan on less favorable terms to keep the company going awhile longer.

All crooks share a common fault: They don’t believe they’ll ever get caught.

BobMbx on September 15, 2011 at 10:18 PM

The People in charge knew as well, but just like Obama’s reckless disregard of the financial problems/corruption at Fannie and Freddie, he willfully chose to ignore those problems in 2006-2008, and fought against anyone else remedying them too; he acted the same way with Solyndra, and for the same reasons, he put ideology ahead of fiscal responsibility. Because it’s not his money.

eaglewingz08 on September 15, 2011 at 10:18 PM

A 2009 report by the Energy Department’s inspector general warned that the DOE lacked the necessary quality control for the loan guarantee program, which was created in 2005 to support clean-energy projects that could not obtain conventional bank loans due to high risks.

Well, there’s the problem right there……Bush did it.

Skandia Recluse on September 15, 2011 at 10:19 PM

I can’t believe Gunwalker isn’t bigger than this story. It should be.

El_Terrible on September 15, 2011 at 10:21 PM

I’d LOVE to see the pro-forma that Solyndra provided to the DOE with their app.

DrW on September 15, 2011 at 10:21 PM

I’m stunned the msm is doing their job.

artist on September 15, 2011 at 10:22 PM

The subordination of the debt was clearly obtained under fraudulant terms and the money should be recovered and perps sent to prison. It’s harder to see how to send the WH officials to the slammer where they belong. Maybe get the company officials to rat them out saying they knew of the fraud, but a jury would never buy that.

pedestrian on September 15, 2011 at 10:22 PM

It’s time for Stevie Chu to go! And he can take Erin “Pardon Me” Holder with him.

GarandFan on September 15, 2011 at 10:23 PM

Crooks & Liars. If our country survives until Nov 6, 2012, it’ll be a miracle.

conservative pilgrim on September 15, 2011 at 10:23 PM

I have had experience talking to swindlers before and those email excerpts fire all my internal warnings. How could the administration not have know?

StubbleSpark on September 15, 2011 at 10:24 PM

If only Solyndra would have altered their solar panel design to Halo panels.
Oh..and change their name to Halobamdra.

Electrongod on September 15, 2011 at 10:25 PM

This whole thing is a friggin’ scam.
I think they siphoned millions off the top and then tanked the company on purpose.
Obama will get his cut later.
Just like with all that stimulus money.
It’s all gone.
Anytime Obama gets near taxpayer money it just evaporates.

NeoKong on September 15, 2011 at 10:26 PM

http://t.co/b5k3Ctb0

Obama administration e-mails: Giving more taxpayer money to Solyndra was risky

Damien LaVera, an Energy Department spokesman, said he could not answer whether OMB staff members spoke to Energy Secretary Steven Chu.

“If anything, this e-mail is yet another piece of evidence that political or optical considerations took a back seat to putting the company and its workers in a better position to succeed and repay the loan,” he said.

William Amos on September 15, 2011 at 10:27 PM

All crooks share a common fault: They don’t believe they’ll ever get caught.

BobMbx on September 15, 2011 at 10:18 PM

Exactly.

Cuz they’re so much much smarter doncha know.

Tim_CA on September 15, 2011 at 10:28 PM

I’m amazed the White House would take the political risk of first throwing half a billion dollars at Solyndra and then agreeing to restructure the loan on less favorable terms to keep the company going awhile longer.

I’m amazed they didn’t waste another half a billion to preserve their green jobs optic past November 2012.

flyfisher on September 15, 2011 at 10:29 PM

I’m stunned the msm is doing their job.

artist on September 15, 2011 at 10:22 PM

That’s only because they can no longer hold the ‘prince of thieves” aloft. He’s grown too heavy a burden and it’s time to unload.

katy on September 15, 2011 at 10:32 PM

On Wednesday, the White House turned over about 900 pages of emails to the House Energy and Commerce subpanel heading the investigation,

They withheld the emails from the WH until Wednesday..?

d1carter on September 15, 2011 at 10:32 PM

I’m amazed they didn’t waste another half a billion to preserve their green jobs optic past November 2012.

flyfisher on September 15, 2011 at 10:29 PM

The SEC tentatively gave Solyndra the go ahead to sell stock based on the second loan. So they almost gave them another 1/2 billion.

William Amos on September 15, 2011 at 10:33 PM

someone needs to get bounced for this boondoggle…i’m thinking dear leader should be the first to go….

cmsinaz on September 15, 2011 at 10:33 PM

Fake Scandal.

Del Dolemonte on September 15, 2011 at 10:33 PM

Energy Department’s inspector general warned that the DOE lacked the necessary quality control for the loan guarantee program, which was created in 2005 to support clean-energy projects

Another example of why conservatives and limited government types were not happy with Bush and the GOP’s domestic policies.

WashJeff on September 15, 2011 at 10:33 PM

Anytime Obama gets near taxpayer money it just evaporates.

NeoKong on September 15, 2011 at 10:26 PM

Ask Joe the Plumber.
His pocket book was 1 pound lighter after talking to Obama on that Spread the Wealth day.

Electrongod on September 15, 2011 at 10:34 PM

The subordination must have an attempt to drag out the default past the 2012 election. With silicon prices dropping 30% Solyndra’s market unique selling proposition evaporated, so everyone knew the company was toast…the only question was when to let it fall.

Now Obama gets the daily double..explain the first bad decision to loan the $, and the even stupider decision to subordiante the DOE lien to new investors.

These are truly some stupid mf’ers in DC. At least Clintons mob was effective. Obama’s crew are total F-ups.

DrW on September 15, 2011 at 10:36 PM

Fake Scandal.

Del Dolemonte on September 15, 2011 at 10:33 PM

fake in what way del? we’ll be lucky to get back 5 cents on the dollar we plowed into this fairy tale.

and subordinating to new investors when the hand writing was on the wall was world class stupidity, bordering on malfeasance.

no corporate exec would ever have given up his lien priority with the debtor showing the signs of distress solyndra was exhibiting in Jan of 2010.

DrW on September 15, 2011 at 10:40 PM

question 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 support innovate technologies), but twice (which could easily be portrayed as bad judgement, or worse).

Ya think? The facts of this and the Fast and Furious fiasco point to a clusterfarking administration of such abysmal incompetency that I had not envisionied.

DrStock on September 15, 2011 at 10:41 PM

Who needs watchdog reports when sleazy Eric Holder is keeping the racket fully protected ? Did Adolf worry when Himmler was keeping any of various “problems” solved? Did Reno worry when she slaughtered dozens of innocents in Waco?

Pardon me? Uh… No, Mr. president I wasn’t making a usual bid for a get out of jail free card.

Sire, sire! The peasants are revolting!

Damn straight, they stink on ice.
– Mel Brooks History of the World Part I

viking01 on September 15, 2011 at 10:41 PM

http://abclocal.go.com/kgo/story?section=news/environment&id=8356266&rss=rss-kgo-article-8356266

EPA gives nod to green company Method

Method is a San Francisco company that makes environmentally-friendly cleaning projects. The Environmental Protection Administration’s Lisa Jackson was on-hand on Thursday to cheer the company’s latest innovation: Bottles made from ocean waste

William Amos on September 15, 2011 at 10:42 PM

This whole thing is a friggin’ scam.
I think they siphoned millions off the top and then tanked the company on purpose.
Obama will get his cut later.
Just like with all that stimulus money.
It’s all gone.
Anytime Obama gets near taxpayer money it just evaporates.

NeoKong on September 15, 2011 at 10:26 PM

I used to conduct forensic fraud investigations for a living and from a distance, this has the indicia of a scam. The whistleblower who called Mark Levin’s show said that they were still installing new high-end equipment days before they filed bankruptcy. If that is true, then someone should be trying to find out how much ended up in the coffers of Democrat friendly companies.

I commented a few days ago that I’m wondering if the Kinde Durkee arrest was part of an attempt to grab records, seal records, intimidate, etc. Of course there is absolutely no known evidence of that. But the Solyndra story broke about the same time she was nabbed. I believe it’s wise to be suspicious of any and all coincidences where these people are concerned.

flyfisher on September 15, 2011 at 10:42 PM

He’s a Rock Star! Nobody can touch him! His adoring fans will insulate him from the real world of accountability and consequences.
Don’t you fools get it? He’s our first “Black President” and we feel ssoooo good about ourselves for actually voting for him so nobody can ever call us racists again. We’ll stand between him and anything that threatens to bring him back to Earth or attach the slightest stain of ineptitude or cupidity to his silken alabaster robes. He is golden! He is immortal! He is perfect! He is the new Messiah! Don’t you get it????

Lew on September 15, 2011 at 10:43 PM

The subordination must have an attempt to drag out the default past the 2012 election. With silicon prices dropping 30% Solyndra’s market unique selling proposition evaporated, so everyone knew the company was toast…the only question was when to let it fall.

DrW on September 15, 2011 at 10:36 PM

One article I read said that according to the company’s own analysis, they knew they would run out of cash in September 2011 as far back as 2009. I find that stunning.

flyfisher on September 15, 2011 at 10:45 PM

Fake Scandal.

Del Dolemonte on September 15, 2011 at 10:33 PM

fake in what way del? we’ll be lucky to get back 5 cents on the dollar we plowed into this fairy tale.

and subordinating to new investors when the hand writing was on the wall was world class stupidity, bordering on malfeasance.

no corporate exec would ever have given up his lien priority with the debtor showing the signs of distress solyndra was exhibiting in Jan of 2010.

DrW on September 15, 2011 at 10:40 PM

Fake, meaning money was most likely transferred erroneously.

Rovin on September 15, 2011 at 10:46 PM

Memo to Rush:

It’s time to get the former, railroaded Inspector General on your show for his perspective and commentary. Pronto.

Zero and sleazy Eric had to chase the previous Inspector General watching the gummint cookie jar out of the way for various reasons. This is bound to be one of them.

viking01 on September 15, 2011 at 10:51 PM

http://energy.gov/articles/energy-department-announces-12-billion-loan-guarantee-support-california-concentrating

Energy Department Announces $1.2 Billion Loan Guarantee to Support California Concentrating Solar Power Plant

September 13, 2011 – 2:33pm

William Amos on September 15, 2011 at 10:56 PM

viking01 on September 15, 2011 at 10:51 PM

Great idea!

itsspideyman on September 15, 2011 at 11:03 PM

I wonder: Can you be guilty of fraud if the truth was staring your victim in the face the entire time, to the point where where two minutes of googling trade-news articles about the company would have revealed the depth of the problem? At what point does the victim’s idiocy/recklessness become an affirmative defense?

I’m reminded of the “five standard excuses” from “Yes, Minister”. I think the excuse used to explain away the Munich Agreement is applicable:

“It was a decision taken before certain important facts were known and could not happen again.”

The dialog surrounding the unveiling of the excuse went something like this:

Jim Hacker: “What important facts weren’t known at Munich?”
Sir Humphrey: “That Hitler wanted to conquer Europe.”
Jim Hacker: “I thought everybody knew that Hitler wanted to conquer Europe!”
Sir Humphrey: “Well, nobody in the Foreign Office knew it!”

allanbourdius on September 15, 2011 at 11:05 PM

BREAKING

WH to tax excessive use of gravity; EPA vows to regulate in order to conserve and increase efficiency

BobMbx on September 15, 2011 at 11:06 PM

Has anyone reported everyone in this thread, including the originator ALLAHPUNDIT, to ATTACKWATCH?

Obama has got to stop all these lies about the criminals stealing tax payer money in his White House PRONTO!!!

Freddy on September 15, 2011 at 11:08 PM

fake in what way del? we’ll be lucky to get back 5 cents on the dollar we plowed into this fairy tale.

and subordinating to new investors when the hand writing was on the wall was world class stupidity, bordering on malfeasance.

no corporate exec would ever have given up his lien priority with the debtor showing the signs of distress solyndra was exhibiting in Jan of 2010.

DrW on September 15, 2011 at 10:40 PM

He’s referring to something crr6 said.

fossten on September 15, 2011 at 11:16 PM

“Fantastic to hear that business is doing well — keep up the good work! We’re cheering for you.”

….Fannie/Freddie 2.0

“If you tire of the White House life and ever decide you want to move out with your best friends in [California] let me know,” Miller emailed to White House special assistant Johanna Maska the day after the visit. He added that “we could find you a great corporate gig very quickly.”

…pay to play the Obama way.

Baxter Greene on September 15, 2011 at 11:18 PM

Please check out Camille Rickett’s article dated Dec 18, 2009 posted on GreenBeat. She reports that SOLY was bleeding cash. In the nine months prior to her report, SOLY lost $120 Mil. WOW! SOLY wasn’t even a publicly traded company. That means that all of the start-up capital came from privet sources. Evidence point to the premise that those investor(s) got favorable/preferential loan terms. NO KIDDING! These terms were no offered to other potential “green energy” companies were they? I have to tell ya, there is so much out there, EDGAR reports(check out the risks of investing, LOL), old articles,etc.

tom0508 on September 15, 2011 at 11:24 PM

If you had ever wondered what the federal government would be like were it to be run by 12 year olds, well now you know…

Dhuka on September 15, 2011 at 11:33 PM

Why spend more time checking when the money always was going to be skimmed.

There’s plenty of other green spending, I wonder what the percentage of net kickback cash is going to end up being?

How many Obama bundlers own green companies?

Speakup on September 15, 2011 at 11:39 PM

Via Andrew Stiles at NRO, here’s another new e-mail from January of this year illustrating why I’m amazed the White House would take the political risk of first throwing half a billion dollars at Solyndra and then agreeing to restructure the loan on less favorable terms to keep the company going awhile longer. Even their own OMB guys saw the iceberg coming. Why didn’t the Energy Department turn the ship when it had a chance?

You’re doing it again, AP. You are assuming some level of rational, logical behavior from these goons.

They. Don’t. Operate. This. Way.

There’s nothing deep or mysterious about this. Just get it.

They have no concept of fiscal responsibility. No concept of economic discipline. No concept, even, of legal accountability.

I said it last night and I’ll say it again – the lunatics are running the asylum. If you operate from that premise, all of this makes complete sense.

nukemhill on September 16, 2011 at 12:11 AM

This guy Stephen Chu is completely unhinged.

visions on September 16, 2011 at 12:11 AM

Almost worth a pool to bet on when the particle-banger gets to check out the underside of the Obama bus.

JEM on September 16, 2011 at 12:21 AM

nukemhill – This administration came into office dead certain they had at least four and probably six years of having their backsides covered by complete Democrat control of Congress. Secure in the knowledge that they’d be untouchable until probably sometime in 2014 they went off and did a lot of really, really, really stupid things in their ideologically-driven effort to redesign the social fabric of the country.

But they didn’t get six years, and now all the excesses particularly of that first year and a half are (hopefully) going to haunt and hound them right out the door.

JEM on September 16, 2011 at 12:24 AM

http://www.newson6.com/story/15476286/did-oklahoma-tax-dollars-go-into-failed-solar-company-tied-to-tulsa-billionaire

Did State Tax Dollars Go Into Failed Solar Company Tied To Tulsa Billionaire?

An Oklahoma State Representative believes some of that money came through state tax credits for venture capital.

Oklahoma State Representative Mike Reynolds says the biggest problem is that there’s almost no accounting for where tax credits actually are invested.

Reynolds says $30 million in tax credits went to George Kaiser and he’s trying to find out if those credits ended up in the failed company in California.

William Amos on September 16, 2011 at 12:28 AM

YOU MUST GRANT THIS LOAN!!!!!

anikol on September 16, 2011 at 12:31 AM

This Administration isn’t going to leave us the Chu on this

J_Crater on September 16, 2011 at 12:49 AM

I blame the LSM for not doing its job. Why did they not do any background on Solyndra since the POTUS highlighted it so…this is what we get when the LSM is so deeply in the tank.

d1carter on September 16, 2011 at 1:16 AM

Legacy media is never going to report on the failure of “green” initiatives, from the laughable sales numbers for the Chevy Volt to the killing of protected birds of prey (including alarming numbers of endangered golden eagles) by power-generating windmill farms, much less the bleeding cash of a company with “solar” practically built into its names.

The information is just starting to leak out, and it is becoming a torrent already. The media cannot ignore a story of this magnitude.

Before it is finished, Fast and Furious may also force its way into wide coverage. These are serious scandals with White House connections, it’s not going to be pretty.

Adjoran on September 16, 2011 at 3:50 AM

If Obama said Solyndra would work, but it didn’t, doesn’t that mean that reality is wrong?

Tantor on September 16, 2011 at 5:38 AM

Obama’s DOJ are just going to come up with a way to make this company into a bunch of criminals that duped him because there aren’t enough regulations to protect the unwitting. And you don’t get any more unwitting than our president.

Cindy Munford on September 16, 2011 at 7:05 AM

He’s referring to something crr6 said.

fossten on September 15, 2011 at 11:16 PM

He either forgot his sarc tag or he didn’t account for new posters not having had time to get up to speed on the spewings of our resident trolls.

Extrafishy on September 16, 2011 at 7:43 AM

Everyone knew ahead of time that this company was going bankrupt. The Bush administration rejected them and that was known before Zero applied pressure to get his campaign bundler HALF A BILLION DOLLARS in stimulus money.

dogsoldier on September 16, 2011 at 9:00 AM

I am disturbed that so many conservative [Fox] outlets are failing to mention that the Bushies started the ball rolling on the DoE loan guarantees to Solyndra, as the Obamanites have pleaded, before decided against it.

They seem reticent to provide a hiding place for O’Bozo, but to me the whole story is that they stumbled into office, found this laying on the cutting room floor and decided to make a movie out of it with complete ignorance about what they were doing.

You won’t sell the story that O’Bozo conspired to give away $500 of your money to his cronies, but it’s very easy to sell the story that Obama is an idiot who doesn’t have a clue what he’s doing in the business world and recklessly throws your money around with no clue how to get it back. It’s actually self-evident.

Stick with that.

Jaibones on September 16, 2011 at 9:05 AM

Solyndra spokesman David Miller also did his share of glad-handing with the White House aides handling Obama’s trip.

“If you tire of the White House life and ever decide you want to move out with your best friends in [California] let me know,” Miller emailed to White House special assistant Johanna Maska the day after the visit. He added that “we could find you a great corporate gig very quickly.”

This is breathtaking.

Jaibones on September 16, 2011 at 9:08 AM

Just a goofy thought popped into my head this am …
How come they broke their promise for solar panels on the WH ??
Last found were reports they were still in the ‘bidding process’, then it never happened.
Hmmmmm.

I’ll go report myself, now.

pambi on September 16, 2011 at 9:14 AM

At what point does the victim’s idiocy/recklessness become an affirmative defense?

In this case, that happens right at the point where you’re conspiring with your “victim” to steal taxpayer money.

logis on September 16, 2011 at 9:58 AM