WASHINGTON, DC - Top Obama administration officials were worried about Solyndra's financial condition just two days before the president's 2010 visit to the Fremont company, yet allowed PresidentObama's trip to proceed, according to emails released today by House Republicans.
The emails between senior presidential adviser Valerie Jarrett and Ronald Klain, Vice President Joe Biden's chief of staff, show the White House was aware that Solyndra auditor PricewaterhouseCoopers issued a "going concern" warning two months earlier for the solar panel maker, auditor-speak for impending bankruptcy. Solyndra had received a $535 million loan guarantee from the Department of Energy in September 2009 as part of $36 billion in American Recovery and Reinvestment Act money for clean energy projects.
The emails were part of a background memo released by Republicans on the House Energy and Commerce Committee in advance of Chu's testimony before the committee Thursday. Chu, the Energy Department and the White House have been under fire as a result of the Solyndra bankruptcy because of their communication with the company. Oklahoma billionaire George Kaiser, the biggest investor in Solyndra and a donor to Obama's presidential campaign, met with Energy Department and White House officials shortly before the loan was announced, prompting charges of political favoritism from Republicans. Energy Department and White House officials deny giving Solyndra preferential treatment.
Despite the warning from the auditor, the emails show Rogers told the White House that "going concern" warnings were common among pre-IPO companies.
"Bottom line is that we believe the company is okay in the medium term, but will need some help of one kind or another down the road," added O'Connor, Chu's chief of staff, in an email he sent May 24, 2010.
Two days later, Obama visited the company, saying, "The future will always be with companies like Solyndra." The next month, Solyndra canceled a planned $300 million initial public offering. The emails also show Solyndra delayed plans for an initial round of layoffs until after the November 2010 elections, to avoid embarrassing the White House.
Many of the Energy Department's top staff quit in late 2010 and early 2011, including Undersecretary of Energy Cathy Zoi and general counsel Scott Harris. Rogers left the department in September 2010, while O'Connor left in March 2011, shortly after Solyndra restructured its Energy Department loan. The loan included a controversial agreement that private investors would be paid ahead of the government should the company default. Klain left the administration in January 2011.
Despite the loan restructuring, Solyndra filed for bankruptcy in August 2011, laying off more than 1,100 workers. The FBI raided the company the following month. Solyndra's top executives refused to testify at a Congressional hearing regarding the loan, citing their Fifth Amendment protections against self- incrimination.
Daniel J. Goldstein