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by Don Azarias
October 1, 2011
There’s a big story brewing regarding President Barack Obama’s role in doling out $535 million loan to a company called Solyndra which has just closed its doors, leaving American taxpayers holding the bag. But this time, Obama was caught with his hand in the cookie jar. This will, most likely, become a hot campaign issue for the 2012 presidential election that would be politically painful for Obama and the Democrats if the Republicans continue to capitalize on it. For sure, the GOPs would want to hang this albatross around Obama’s neck during the entire presidential campaign.
For the readers’ information, Solyndra is a solar panel company that Obama visited in May, 2010 and said it was “leading the way toward a brighter and more prosperous future.” But only a month later, the company laid off 100 employees. And just recently, it filed for Chapter 11 and fired 1,000 workers. Soon after, FBI agents raided the company’s California offices. No immediate reason was given as to why the raid was ordered.
As had always been the case, the American taxpayers are the last ones to know what those political leaders in Washington, D.C.—this time Obama and his Democratic allies——are doing with our tax dollars.
Republicans on the House and Energy Commission are accusing the Obama administration of ignoring multiple warning signs that Solyndra was on the verge of collapse. The Republicans and other members of the Commission are now presenting their case against the administration’s handling of the loan.
Records show that under the Bush administration, the Department of Energy rejected Solyndra’s request for a government loan. The Department was concerned about the company’s financial outlook and viability. However, early in the Obama’s administration, Energy Secretary Steven Chu announced the government would give the company a $535 million loan, funded with money from the $787 billion stimulus package. It was learned that, last year, government accountability investigators criticized the White House for scheduling a groundbreaking at a Solyndra plant before the Energy Department had even finished filing all its paperwork. More warnings about the company persisted. An audit report by PricewaterhouseCoopers said Solyndra had suffered recurring losses from operations and negative cash flows, raising “substantial doubt about its ability to continue as a going concern.”
According to e-mails obtained by the Center for Public Integrity (CPI), the White House officials asked the Department of Energy to make a decision on the Solyndra loan so that they would know whether they could schedule President Obama for a visit to the facility to publicize the loan. Republicans are saying that the White House pressured the Energy Department, or used undue influence, to approve the loan even before government examiners had the chance to go over Solyndra’s financial records.
Republicans also mentioned that a big private backer of the deal, Oklahoma billionaire George Kaiser, a major Obama campaign contributor, is also a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama’s 2008 campaign, federal election records show. Kaiser has made, at least, 16 visits to the White House since 2009, according to its visitor logs. I think we are now getting a clearer picture on how Obama played an important role in extending the loan to the now-bankrupt company.
Given the company’s shaky financial condition, Republican lawmakers say the decision to provide government loan raises questions about whether the Obama administration protected political supporters at taxpayers’ expense.
Before and after receiving the loan, Solyndra had been showing signs of financial distress but the Obama administration ignored them. A few days before the groundbreaking on the new Solyndra facility in September 2009, a Department of Energy official completed an analysis that concluded the company would run out of cash by September of 2011. It turned out that they were right on target.
According to CPI, it wasn’t until last February that the government decided Solyndra was about to default. The Obama administration decided to refinance the company’s original loan with the help of $75 million from private investors. As part of the deal, the government agreed that if Solyndra ever went bankrupt, it would have to pay back the $75 million to investors first before paying back what it owed the taxpayers. The Republican members of the subcommittee suggested that cutting such a deal was illegal, in violation of a provision of the Clean Air act. Even Rep. Diana DeGette (D-Colorado), had this to say: ”I’m perplexed how they can be in my office in July telling me things are looking better and filing for bankruptcy two months later.”
For future protection of taxpayers, Sen. David Vitter (R-Louisiana) to float legislation requiring all renewable energy companies that received a loan from the U.S. government in the past two years to undergo an audit.
At least three reports by federal watchdogs over the past two years warned that the Energy Department had not fully developed the controls needed to manage the multibillion-dollar loan program that provided the loan to Solyndra. The Associated Press (AP) said that a White House official dismissed reports about Solyndra’s gloomy future.
The Treasury Department’s inspector general recently said that it has opened an investigation into the Solyndra loan. It is reviewing the role and actions of the Federal Financing Bank, a government corporation supervised by the Treasury Department. The bank provided the low-interest loan to Solyndra.
The loan is one of, at least, 15 loans totaling more than $6 billion made by the bank as part of the stimulus program. The program is scheduled to end on September 30 and that could be the reason why Obama is moving quickly to close all of the deals that, most likely, will benefit his friends.
Meanwhile, Republicans, are raising the question whether that could lead to more loans to companies that fail like Solyndra.
It’s almost laughable that Obama is now going around the country trying to sell his new-job creation program. For someone who had just blown more that half a billion of taxpayers’ dollars, Obama sure has a lot of nerve. Personally, I believe this is one of his colossal blunders as president. And I’m not discounting former Vice President Dick Cheney’s comment that if Hillary Clinton were in the White House rather than Barack Obama, things might be different today in the country.
As for Obama, the Latin words “quid pro quo” mean “change we can believe in.” But the last time I looked they meant “you scratch my back, and I’ll scratch yours.”