Pending bankruptcy didn’t keep Solyndra from sending cash to lobbyists

posted at 2:45 pm on September 16, 2011 by Ed Morrissey

The collapse of Solyndra looks inevitable in retrospect — and for auditors who reviewed their loan application that the Obama White House expedited and to the employees who worked there, it looked inevitable before it happened, too.  This has many wondering just what business model Solyndra used to keep the company going as long as it did.  The New York Times figures out that Solyndra’s execs used a tested-and-true business method called Lobby For Dollars — and that they kept using this model even as the company disintegrated:

According to records filed with the Clerk of the House and a search of disclosure forms compiled by the Center for Responsive Politics, Solyndra spent nearly $1.9 million on lobbying activities over a period of 43 months from 2008 to 2011.

About $1 million of that was earned by the company’s two in-house lobbyists, Joseph Pasetti and Victoria Sanville, over an 18-month period from 2010 until this year. But Solyndra has also had several big-name lobbying shops on its payroll, including established powerhouses Dutko Worldwide and Holland and Knight, which began representing the then-fledgling company in 2008. …

By 2009, Solyndra was finished with Dutko and Holland and Knight and was working with well-known energy lobbyist, McBee Strategic Consulting, whose clients have included the Applied Materials Inc., a semiconductor and solar panel equipment manufacturer; Babcock & Wilcox; BrightSource Energy Inc., a solar developer; Google Inc.; Better Place Inc., an electric-vehicle charge station developer; Honeywell International; and Tesla Motors Inc., a developer of electric cars.

They scored big in 2009, getting the $535 million Porkulus loan-guarantee package at the center of this scandal.  At that point, one might imagine that Solyndra might have looked for a business model that would actually have produced green technology at a profit rather than continue to seek public support for a failing private venture.  Instead, it looks like the infusion of capital fueled even more lobbying:

By 2010 Solyndra had hit its lobbying peak. Not only had the company begun paying its own in-house lobbyists but it was also working with nine other lobbyists at three different agencies including McBee and two others, the Washington Tax Group, which had been brought on board to handle the company’s interest as it related to the Solar Manufacturing Jobs Creation Act that was up for consideration, and McAllister and Quinn, which was handling the company’s interests on the National Defense Authorization Act. …

One lobbying shop that was added to Solyndra’s stable this year was the Democratic-leaning Glover Park Group. Glover Park had had a communications relationship with Solyndra for about a year before filing with the Clerk of the House on July 18 to conduct lobbying.

They climbed aboard the Solyndra trainwreck just weeks before the collapse, but they had plenty of time to work.  The firm staged a media event for Solyndra’s CEO to publicly proclaim the firm’s fiscal stability.  Glover apparently also arranged a series of meetings with Congressmen, including Henry Waxman, to make the same pitch.

One has to imagine that these lobbyists did not come free of charge or on the cheap.  At the time that Solyndra was shoveling money out the door to lobbyists while their balance sheet went downhill fast, the Department of Energy had observer status at Solyndra’s board meetings.  So far, there is no indication that the DoE flagged these expenses at all, nor did they report to Congress on the lobbying push Solyndra conducted in its last months.  The DoE knew for months that the firm was near collapse, and ended up subordinating taxpayers to George Kaiser’s late cash infusion of $75 million, all but guaranteeing that taxpayers won’t recover most or all of our half-billion dollars destroyed in the collapse.  They made that deal while Solyndra pumped up the lobbying volume to keep Congress in the dark.

Who kept this information quiet from Congress?  More importantly, how many more Solyndras is the Obama administration and its DoE hiding from Congress, watching taxpayer money being risked while politically-connected firms spend millions to pretend that they’re in perfectly good shape?

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The New York Times figures out that Solyndra’s execs used a tested-and-true business method called Lobby For Dollars —

is that like climbing for dollars?

funny stuff from Running Man

ted c on September 16, 2011 at 2:50 PM

when the capital markets won’t invest, there is always the gubmint

gatorboy on September 16, 2011 at 2:50 PM

OT but quid pro quo all around.

Schadenfreude on September 16, 2011 at 2:51 PM

Climbing for Dollars

link fix

ted c on September 16, 2011 at 2:52 PM

Ed, there are a lot of editing errors in this post.

Count to 10 on September 16, 2011 at 2:53 PM

At that point, one might imagine that Solyndra might have looked for a business model that would actually have produced green technology at a profit rather than continue to seek public support for a failing private venture.

Maybe Solyndra was using the business model that Big Wind uses. With no hope of ever becoming financially self-sustaining, the wind industry relies on perpetual gubmit subsidy.

petefrt on September 16, 2011 at 2:54 PM

More importantly, how many more Solyndras is the Obama administration and its DoE hiding from Congress, watching taxpayer money being risked while politically-connected firms spend millions to pretend that they’re in perfectly good shape?

I’m guessing, all of them. If “green” energy was viable, they wouldn’t need federal subsidies. States can burn all of the money they want, but keep me(the federal taxpayer)out of it.

Mord on September 16, 2011 at 2:55 PM

They climbed about the Solyndra trainwreck just weeks before the collapse,

taxpayers won’t recover hardly any of

One has to imagine that these lobbyists came free of charge or on the cheap.

Count to 10 on September 16, 2011 at 2:56 PM

dare I say it, but this whole incident is a teachable moment on the collusion of interest groups, elected Democrats, crony capitalists, and what they consider government for.

rob verdi on September 16, 2011 at 2:56 PM

Just like Porkulus, the massive cash inflow to Solyndra was just a money laundering scheme: Big donor gets preferred loan approval (at very low interest rates) they never intend to pay back. Loaned money is then funneled to Democrat Party.

This is more than just cronyism, it’s RICO-style money laundering.

Weebork on September 16, 2011 at 2:56 PM

subordinating taxpayers to George Kaiser’s late cash infusion

Is that even legal?

petefrt on September 16, 2011 at 2:57 PM

Remember when Obama said he was going to limit and virtually eliminate the lobbyist influence in his administration?

LOL!

Good times.

Good Lt on September 16, 2011 at 2:59 PM

The Green version of Enron.

Hening on September 16, 2011 at 3:00 PM

This has many wondering just what business model Solyndra used to keep the company going as long as it did.

Red headed girl in the back of the class raises her hand: Ummm Money Laundering?

Chip on September 16, 2011 at 3:00 PM

Is that even legal?

petefrt on September 16, 2011 at 2:57 PM

As it turns out, no, it wasn’t.

Ed Morrissey on September 16, 2011 at 3:00 PM

I’m just wondering when that bunch of idiots over at MSNBC are going to stop walking around with their collective fingers in their ears while yelling LA-LA-LA-LA!!! and stop pretending this Solyndra thing isn’t there and actually start reporting the story like the competent professional journalists they are SUPPOSED to be!

Because they have been intentionally ignoring the story since it first broke!

pilamaye on September 16, 2011 at 3:03 PM

Is that even legal?

petefrt on September 16, 2011 at 2:57 PM

Of course not, but we’re talking about Progressives here. The Law means nothing to them as long as they can get what they want.

honsy on September 16, 2011 at 3:03 PM

Ed Morrissey on September 16, 2011 at 3:00 PM

Thanks. Didn’t sound legal to me. Now, where is the accountability?

petefrt on September 16, 2011 at 3:04 PM

The incestuous daisy chain of crony capitalism.

singlemalt 18 on September 16, 2011 at 3:05 PM

dare I say it, but this whole incident is a teachable moment on the collusion of interest groups, elected Democrats, crony capitalists, and what they consider government for.

rob verdi on September 16, 2011 at 2:56 PM

… and if you want to cut any part of government, teachers, police and firefighters will all die!

/

Seven Percent Solution on September 16, 2011 at 3:10 PM

academia on steroids on display here… please move along.. nothing to see…

gatorboy on September 16, 2011 at 3:12 PM

If you got a chance to see the two political appointees (OMB and DOE) during the hearing, you would understand why the federal government needs to be as small as possible.

d1carter on September 16, 2011 at 3:15 PM

Boss Emeritus at http://www.gopusa.com/commentary/2011/09/14/malkin-obamas-big-green-boondoggles/ :

Solyndra is now the third solar company to go belly-up this year. Yet the Energy Department is doubling down on failure. As the FBI and House GOP investigators launch a probe into Enron-style accounting problems with Solyndra’s books, DOE is doling out more than $850 million in new loan guarantees for another California solar firm sponsored by NextEra Energy, along with nearly $200 million more for separate solar manufacturing facilities on the West Coast.

petefrt on September 16, 2011 at 3:15 PM

Thanks. Didn’t sound legal to me. Now, where is the accountability?

petefrt on September 16, 2011 at 3:04 PM

Paging Eric Holder! Call for you on the white black telephone.

honsy on September 16, 2011 at 3:16 PM

Bob Beckle refuses to discuss the matter. He claims he will not talk about BS.

IowaWoman on September 16, 2011 at 3:16 PM

Bears resemblance to some charities and other nonprofits whereas a large portion of funds taken in is used for more fundraising. The scenario is not a new one.

a capella on September 16, 2011 at 3:18 PM

Can someone tell me what part of the Constitution authorizes the doling out of venture capital to businesses? Seems like an easy place to cut spending. Eliminate all such funding.

txmomof6 on September 16, 2011 at 3:19 PM

Can someone tell me what part of the Constitution authorizes the doling out of venture capital to businesses? Seems like an easy place to cut spending. Eliminate all such funding.

txmomof6 on September 16, 2011 at 3:19 PM

It is called: Stimulus

IowaWoman on September 16, 2011 at 3:23 PM

Can someone tell me what part of the Constitution authorizes the doling out of venture capital to businesses? Seems like an easy place to cut spending. Eliminate all such funding.

txmomof6 on September 16, 2011 at 3:19 PM

But . . . but we have to save the planet!!! /

honsy on September 16, 2011 at 3:24 PM

Instead, it looks like the infusion of capital fueled even more lobbying:

Something like internet spamming selling Australian lottery tickets, herbal ‘viagra’, various and sundry ‘male enhancement’ food supplements?

Skandia Recluse on September 16, 2011 at 3:24 PM

subordinating taxpayers to George Kaiser’s late cash infusion
Is that even legal?

petefrt on September 16, 2011 at 2:57 PM

There is a federal law that prohibits it, but you know how fond the dictator . . . er, I mean, president, is of handing out waivers to his special friends, so that they can legally ignore those pesky laws the rest of us are subject to. I’m guessing something like that happened here.

AZCoyote on September 16, 2011 at 3:26 PM

The attitude seems to have been…well, this was only stimulus money, what’s the problem.

d1carter on September 16, 2011 at 3:26 PM

And John Dingell saw nothing wrong…while eating a sandwich during the proceedings…

d1carter on September 16, 2011 at 3:28 PM

Can someone tell me what part of the Constitution authorizes the doling out of venture capital to businesses? Seems like an easy place to cut spending. Eliminate all such funding.

txmomof6 on September 16, 2011 at 3:19 PM

It is called: Stimulus

IowaWoman on September 16, 2011 at 3:23 PM

Well then let’s just print enough money to buy every factory and business in the US and voila, everything would be all better! They did that in the old Soviet Union and everything went well…oh wait.

txmomof6 on September 16, 2011 at 3:29 PM

Bob Beckel refuses to discuss the matter.

IowaWoman on September 16, 2011 at 3:16 PM

Yeah, so I notice. Beckel usually doesn’t bother me. In fact, I kinda like the guy, in spite of his leftism. But he’s been a bit abrasive lately. Maybe all the Øbama stuff hitting the fan is getting to him?

petefrt on September 16, 2011 at 3:30 PM

The Green version of Enron.

Hening on September 16, 2011 at 3:00 PM

How so?

First, was the Bush White House involved in Enron?

Second, in Enron, private investors in a publicly traded company and many employees got screwed. In contrast, here, taxpayers and, to a lesser extent, a comparatively smaller number of employees and wealthy private investors will get screwed.

Third, in Enron, a major public accounting firm (Arthur Andersen & Co.) had some personnel acting in concert with Enron officials and, as a result, it imploded in very short order. In contrast, I doubt PriceWaterhouseCooper suffers much given that they seemed to have sounded the warning horns.

Where are the parallels?

BuckeyeSam on September 16, 2011 at 3:33 PM

As it turns out, no, it wasn’t.

Ed Morrissey on September 16, 2011 at 3:00 PM

I’m afraid there’s precedent. Just google “GM Bankruptcy”.

We don’t need no stinking 500yearsofbankruptcylawprecedentorcontractlaw’s

BobMbx on September 16, 2011 at 3:41 PM

Paging Eric Holder! Call for you on the white black telephone.

honsy on September 16, 2011 at 3:16 PM

“Your hollow log is beating…..”

BobMbx on September 16, 2011 at 3:42 PM

Instead, it looks like the infusion of capital fueled even more lobbying:

That’s because they were in the business of getting tax payer money.

gwelf on September 16, 2011 at 3:47 PM

The Green version of Enron.

Hening on September 16, 2011 at 3:00 PM

Paul Krugman resents that remark.

VibrioCocci on September 16, 2011 at 3:54 PM

The Green version of Enron.

Hening on September 16, 2011 at 3:00 PM

Paul Krugman REPresents that remark.

VibrioCocci on September 16, 2011 at 3:54 PM

FIFY

honsy on September 16, 2011 at 3:56 PM

The Green version of Enron.

Hening on September 16, 2011 at 3:00 PM

Much worse than Enron, which had nothing to do with President George W. Bush.

On the other hand, if we can label it “Obama’s Enron”, let’s.

slickwillie2001 on September 16, 2011 at 4:00 PM

Here is a link to the DOE website which shows one of the pending loan committments to a firm named SunPower for construction of a solar farm.

https://lpo.energy.gov/?projects=sunpower-corporation-systems-california-valley-solar-ranch

The project is only projected to create 15 permanant jobs, yet the loan guarantee is for over $1.15 Billion.

That’s $79 million in funds loans for each one job created.

DrW on September 16, 2011 at 4:16 PM

So when do the buses and purple shirts start showing up at “Joe and Vickie’s” houses?

Mr_Magoo on September 16, 2011 at 5:21 PM

The New York Times figures out that Solyndra’s execs used a tested-and-true business method called Lobby For Dollars —

Reminds of the game shows where you got inside the big tube with money, the blower started up and you lept around like a bloomin’ maniac grabbing as much cash as you could in the time allowed.

Mr_Magoo on September 16, 2011 at 5:25 PM

Ace is saying that Solyndra may actually have gotten another 400+ million in loans ON TOP of the 535!

Iblis on September 16, 2011 at 5:33 PM

A close look by LA Observed at the company’s SEC filings shows that it also was seeking additional DOE loan guarantees of $469 million for Phase II of its so-called Fab 2 solar power manufacturing facility in Fremont. And, get this, DOE – according to Solyndra’s Dec. 18, 2009 application for SEC approval to sell common stock – tentatively gave this 2nd loan application its approval. Here’s the story right from Solyndra’s own S-1:

“On September 11, 2009, we submitted Part 1 of an application for an approximately $469 million guaranteed loan to be utilized to finance the construction of Phase II. As with the financing facility for Phase I, the loan would be made by the Federal Financing Bank and guaranteed by the DOE.

from link i just posted.

ted c on September 16, 2011 at 6:40 PM