Concerns over the financial status of Solyndra reached higher and sooner in the Obama administration than acknowledged, new documents from a Friday-night dump show — and not just about Solyndra, either. Solyndra closed its doors in August of last year, taking over a half-billion dollars in taxpayer money with it, after having been approved for loan guarantees by the Department of Energy at a sweetheart rate — and having been rescued in December 2010 and January 2011 with more government intervention. Under a threat of subpoenas from the House Energy and Commerce Committee, the White House released more e-mails pertaining to their internal activities regarding Solyndra, and they show that the Obama administration and its economic advisers had raised red flags about Solyndra as early as March 2010 (via Doug Powers at the Boss Emeritus’ site):
White House emails released Friday added further evidence that concerns about the Energy Department loan guarantee program that benefited Solyndra had reached as high as President Barack Obama’s top economic adviser, Larry Summers, by early 2010.
References to Summers’s concerns turn up in a March 4, 2010, email exchange in which White House officials were second-guessing whether Obama should trumpet Solyndra’s exports to Australia during a planned visit later that month to the country.
“Isn’t this the company Larry asked questions about?” Michael Froman, a top economic adviser to Obama, said in an email to Joseph Aldy, another White House aide. “What is your view about highlighting their exports in Australia?”
Summers at the time was Director of the National Economic Council, nominally in charge of the administration’s economic policy. He was not the only economic adviser to raise questions about Solyndra and the administration’s involvement, either. Jared Bernstein, who helped write the case for the stimulus bill that produced the funding for Solyndra, shared his concerns with another Joe Biden economic adviser in May 2010 over the level of private investment that the green-tech stimulus loan guarantees had produced — and then suggested that no one mention it:
Meanwhile, other revelations in the newly released documents include Vice President Joe Biden’s top economic adviser flagging concerns over the company’s poor finances while preparing for a briefing with reporters a day before Obama’s May 26, 2010, visit to Solyndra’s headquarters in Silicon Valley.
In the May 25 email exchange, Jared Bernstein wrote to Herbert Ziskend, one of Biden’s domestic policy advisers, “But do you have a leverage # for Solyndra — how much pvt cap [private capital] they raised off of the loan guarantee?”
Elizabeth Oxhorn, a press aide in Biden’s office, replied with the figure: “Solyndra raised $198m in private capital between selection in March 2009 and the loan closing in September 2009.”
Bernstein responded that the figure was not one he wanted to talk about with the press. “Weird — so leverage is like 2/5 ($198 m leverage against loan guarantee of $535m)… best not to go there,” he wrote.
And yet, even with Obama and Biden’s closest advisers expressing concerns like this for months over Solyndra, the Obama administration still decided to intervene on Solyndra’s behalf in January 2011 by restructuring the loans — and by illegally subordinating the taxpayer stake to later investors in a last-ditch effort to stave off political embarrassment. The later investor in this case was Obama bundler George Kaiser, which has already raised questions about Obama’s intervention for Solyndra. These revelations of warnings within the highest level of economic advisers over the risks at Solyndra will only amplify suspicions about the motives for Obama’s intervention.
There’s another key quote from Summers in the Politico piece on a more general point about government intervention, too, although it came from an earlier release. In December 2009, Summers gave his opinion of programs like the one that benefited Solyndra to one of its investors:
Summers’s concerns about the DOE program have come across in other internal White House documents that have surfaced during the investigation into Solyndra’s financial meltdown. The most notable — a December 2009 email exchange between Summers and an investor with ties to Solyndra — ended with Summers declaring: “I relate well to your view that gov is a crappy vc [venture capitalist] and if u were closer to it you’d feel more strongly.”
In that, Summers has been proven correct by this administration — repeatedly. In the meantime, Congress needs to start issuing subpoenas to find out who knew what and when about Solyndra, and how much politics played a role in overruling the administration’s leading economic advisers and the DoE’s auditors while gambling — and losing — $535 million on a venture that would have benefited Obama’s contributors.