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The current controversy surrounding the bankruptcy of Solyndra, the Obama administration’s green energy albatross, may be reaching critical mass. In yet another late Friday release of information, a time-honored strategy designed to minimize media coverage of unpleasant truths, the White House has sent Congressional investigators another 2000 pages of emails. Emails which implicate officials at the highest levels of seniority within the administration.
These emails are not only about the original $535 million dollar taxpayer-funded loan made to the beleaguered company, but the subsequent attempt to restructure it as well. That restructuring was a deal which allowed private investors, who came in with $75 million later in the process, to be repaid before taxpayers were reimbursed, if the company went belly up.
Emails demonstrate the deal was so dubious, Energy Department officials were notified that it might be a violation of the law, and ought to be cleared by the Department of Justice before proceeding. May Miller, an assistant Treasury secretary, wrote to deputy OMB director Jeffrey D. Zients expressing that concern. A follow-up memo by Miller on August 17th, 2011 to the OMB revealed that “To our knowledge that [clearance] never happened.”
Department of Energy (DOE) spokesman Damien LaVera claimed agency officials listened to the advice proffered by Treasury who, along with the Office of Management and Budget (OMB), had raised serious concerns about both the loan vetting process used to select Solyndra, and the special treatment it continued to get when its deteriorating financial condition became more evident. But the advice was ignored. “Ultimately, DOE’s determination that the restructuring was legal was made by career lawyers in the loan program based on a careful analysis of the statute,” LaVera contended.
That sentiment was echoed by the president himself last Thursday when he praised agency officials for using their “best judgment” in granting the loan. “There were going to be some companies that did not work out; Solyndra was one of them,” the president said. “But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally when you’re dealing with something as complicated as this.”
That the process was straightforward is a remarkable assertion. Steve Spinner, who worked for the DOE’s loan department repeatedly hectored department officials to approve the package. “How [expletive] hard is this? What is he waiting for?” Spinner wrote in an Aug, 28, 2009 email to a DOE official. “I have the OVP (Office of the Vice President) and WH (the White House) breathing down my neck on this. They are getting itchy to get involved.” On the same day, Spinner emails to the same official and told him to “walk over there and force him to give you the answer,” referring to the specific DOE official who was evaluating Solyndra’s loan.
The problem? Spinner’s wife, Allison Berry Spinner, is a partner at Wilson Sonsini Goodrich & Rosati, a firm in Palo Alto, California. They represented Solyndra on the DOE loan, and Federal records show the firm received at least $2.4 million in legal fees for their efforts. The above email seemingly refutes Mr. Spinner’s assertion that he had recused himself due to the obvious conflict of interest.
Another possible conflict of interest? Mr. Spinner raised at least $500,000 for the president’s election campaign in 2008.
Yet Energy spokesman LaVera continued to assert everything was above board. “Because his wife agreed not to participate in or receive any financial compensation from her law firm’s work on behalf of any loan program applicant, Mr. Spinner was authorized to oversee and monitor the progress of applications, ensure that the program met its deadlines and milestones, and coordinate possible public announcements,” LaVera explained in an email Friday. Another senior administration official refused to comment when asked if Spinner violated his recusal agreement.
Spinner was hardly alone with respect to pressuring DOE. An email from a senior advisor to former White House Chief of Staff and current Mayor of Chicago Rahm Emmanuel regarding the loan guarantees indicated Emmanuel’s interest in the project. An August 17th, 2009 email from aide Aditya Kumar noted that Vice President Joe Biden’s Chief of Staff Ron Klain had said that either president Obama wanted to attend the opening of the Solyndra plant, or that Emmanuel wanted him to do it. “Ron said this morning that the POTUS [President of the United States] definitely wants to do this (or Rahm wants the Potus to do this)?” it read.
Yet in September, when questioned in Chicago by WLS Radio host Bill Cameron, Emmanuel denied any knowledge of the Solyndra affair. “Bill, ya know, I’m focusing on a major announcement today for the city of Chicago,” Emmanuel told Cameron. “I don’t actually remember that or know about it. So, what I’m dealing is with what I’m dealing with here today.” When Cameron pressed Emmanuel about due diligence on the deal, Emmanuel deflected the question. “I’m talking about healthcare today,” he responded.
Also in late September, another piece of the puzzle fell into place. On the 29th, Energy Secretary Steven Chu acknowledged that it was his decision to allow Solyndra to restructure its loan and keep getting taxpayer funding, despite the fact that the company was already in default on the $535 million. DOE authorized the Federal Financing Bank to give two additional cash installments to Solyndra in December of 2010 and January of 2011. He did this despite several troubling realities. As far back as 2009, the company had lost $373 million, a number which ballooned to $558 million less than a year later, when auditor PriceWaterhouse issued a “going concern” report on Solyndra’s apparent deterioration. In autumn of 2010, company executives told the DOE they were running out of cash and could not make a required payment to a cash-reserve account, and on December 1, 2010 the company officially defaulted on the loan.
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