Economic Calendar

Saturday, October 8, 2011

Energy Official With Solyndra Links Pressed for Loan

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By Jim Snyder - Oct 8, 2011 5:32 AM GMT+0700

A fundraiser for President Barack Obama who became an Energy Department official pressed colleagues to approve Solyndra LLC’s application for a $535 million U.S. loan guarantee after he was barred from participating in the decision, according to e-mails.

Steve Spinner, who advised the loan guarantee program, was recused from discussions about aiding Solyndra, the California maker of solar panels that filed for bankruptcy Sept. 6. Spinner’s wife worked at a law firm that represented the company.

Spinner raised at least $500,000 for Obama’s 2008 presidential campaign, according to the Center for Responsive Politics. E-mails obtained today show that Spinner was active in discussions related to the loan guarantee, which is the subject of a congressional investigation. The Justice Department is also investigating the company for possible fraud.

The White House and vice president’s office are “breathing down my neck on this ... just want to make sure we get their questions,” Spinner wrote in an Aug. 28, 2009, e-mail to another Energy Department official. “They’re getting itchy to get involved if needed. I don’t want that.”

In the e-mail, Spinner asked if officials in the Office of Management and Budget, which was responsible for helping to weigh the risks of the loan guarantee, had signed off on the project. “How ---- hard is this?” Spinner wrote.

Republican Questions

The e-mails were part of a new batch of documents the White House sent today to congressional investigators. Republicans have questioned whether politics played a role in the decision to give Solyndra the first and biggest loan guarantee to a solar manufacturer.

The documents don’t undermine the administration’s position that the decision on the loan was merit-based, an administration official who asked not be identified discussing the materials sent to Congress, said today.

In a Sept. 29 news release, the Energy Department said Spinner was barred from engaging in discussions affecting specific loan applications in which his spouse’s law firm was involved.

The firm, Wilson, Sonsini, Goodrick & Rosati, has said Allison Spinner didn’t do work for Solyndra, according to the department statement. Spinner joined the department at the end of April 2009 after it had given a conditional commitment for the award, according to the statement. Solyndra won final approval in September 2009.

Allowed to ‘Oversee’

Because Spinner’s wife didn’t participate in or benefit from her law firm’s work for Solyndra, he “was authorized to oversee and monitor the progress of applications, ensure that the program met its deadlines and milestones, and coordinate possible public announcements,” Damien LaVera, an Energy Department spokesman, said today in an e-mail.

“He was not allowed to make decisions on the terms or conditions of any particular loan guarantee or decide whether or not a particular transaction was approved.”

Spinner left the department at the end of September 2010, the Energy Department said. Spinner, who is now a fellow at the Center for American Progress, a Washington organization that advises Democrats, didn’t respond to phone and e-mail requests for comment.

In addition to raising more than $500,000 for Obama, Spinner and his family gave $15,150 to federal candidates in the 2008 campaign, according to the website of the Center for Responsive Politics in Washington, which tracks political fundraising.

Treasury Official’s Doubts

The e-mails sent to Congress today also show a Treasury Department official expressed concern that a restructuring of Solyndra’s loan guarantee approved by the administration in February may have violated the law and Department of Energy regulations because it gave taxpayer debt a back seat to $75 million in new investment in the case of liquidation.

“Our legal counsel believes that the statute and the DoE regulations both require that the guaranteed loan should not be subordinate to any loan or other debt obligation,” Mary J. Miller, assistant secretary for financial markets at the Treasury, wrote in an Aug. 17, 2011, e-mail to Office of Management and Budget deputy director Jeffrey Zients.

By the time Miller wrote the e-mail, the company was approaching bankruptcy and administration officials were discussing Solyndra’s request for a second loan restructuring. The Energy Department denied that request on Aug. 30, and the company closed its doors the next day.

House Energy Committee Chairman Fred Upton, a Michigan Republican, and Representative Cliff Stearns, a Florida Republican and chairman of the investigations panel, sent a letter to Treasury Secretary Timothy Geithner today demanding all documents relating to the loan guarantee.

Obama’s Interest

The e-mails also show White House interest in promoting Solyndra even after early indications the company was facing financial difficulties.

Aditya Kumar, an aide to White House Chief of Staff Rahm Emanuel, wrote in an Aug. 13, 2009, e-mail that Obama “definitely wants” to take part in an event announcing final approval of the loan guarantee.

Vice President Joe Biden ended up participating by video feed. Energy Secretary Steven Chu attended the groundbreaking for the new plant to be paid for in part with the U.S. loan on Sept. 4, 2009.

Kaiser’s Biography

In an Aug. 19, 2009, e-mail Kumar asked Spinner to respond to concerns in the White House’s Energy and Climate Change office about the Solyndra deal.

“It’s a great announcement that will be well received,” Spinner, who has described himself as an investor in clean- technology and Internet companies, wrote in an e-mail to Kumar.

In another e-mail to Kumar, Spinner listed Solyndra’s major investors and attached a biography of George Kaiser, an Oklahoma billionaire and Obama fundraiser whose family foundation invested in the solar panel company.

Republicans have cited Kaiser’s connection with Solyndra to suggest political considerations influenced the award. The White House and the foundation say Kaiser didn’t lobby for the guarantee.

The chief executive officer of a rival solar company wrote an Energy Department loan guarantee official on Feb. 25, 2009, citing Solyndra’s “well-publicized rapidly deteriorating financial state.”

“I would appreciate clarification from you about whether the DoE loan guarantee program is suitable as a ‘bail-out’ program for failing private manufacturers,” Martin Roscheisen, CEO of NanoSolar Inc., based in San Jose, California, said.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net



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