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The political scandal over the failure of Solyndra, the politically connected solar-panel maker, just got a lot more interesting. The FBI raided the company's Fremont, California offices yesterday and executed a search warrant.
Congress has been investigating the company, which received a $535 million government loan guarantee in March 2009 and announced August 31 that it is filing for bankruptcy. Yesterday's FBI raid is the first hint of a larger government probe, which is being conducted in cooperation with the Department of Energy's Inspector General. The FBI declined to comment. A Solyndra spokesman said it was surprised by the raid and is cooperating.
Solyndra was once a leading light, if you will, of the Obama Administration's signature "green jobs" dreams. The Energy Department signed off on the loan guarantee under a George W. Bush-era law, and the Federal Financing Bank, a unit of the Treasury Department, also provided a loan with a 1.025% quarterly interest rate. A parade of Administration officials praised the investment, including President Obama, who said in a speech last year at the company's Fremont headquarters that "companies like Solyndra are leading the way toward a brighter and more prosperous future."
Solyndra never did turn a profit and laid off employees in November. But in February the company renegotiated its loan guarantee—with a hitch. Under the new agreement, Solyndra's investors would loan the company $75 million but be first in line on repayment in the event of bankruptcy, in front of taxpayers.
One of Solyndra's biggest backers is the George Kaiser Family Foundation, whose namesake is an Oklahoma oilman who bundled campaign contributions from multiple sources for Mr. Obama's 2008 campaign.
In an email yesterday, an Energy Department spokesman said the government "restructured the debt to give Solyndra more time to repay and avoid default—much like commercial lenders do when a homeowner is having trouble making the mortgage payments."
The email added that the new deal ensured that "no additional taxpayer funding was used," that Energy received "substantial additional collateral protection in the form of intellectual property, claims on the parent company and more," and that the deal "permitted the company to complete, equip and begin operating its plant, which increased its value in any future liquidation or sale." Sounds like Energy officials already feared Solyndra might go belly-up.
Meanwhile, the Daily Caller reported yesterday that "Solyndra officials and investors made no fewer than 20 trips" to the White House between March 2009 and April 2011 and that Mr. Kaiser also made a few visits. Mr. Kaiser and the White House deny any impropriety.
House Republicans began pressing the Administration for more disclosure about the loan earlier this year—an effort that the White House budget office did not seem to welcome. In July, the Energy and Commerce Committee issued a subpoena to force the White House to answer its queries, which it finally started to do in August.
Speaking about the bankruptcy earlier this week, White House spokesman Jay Carney said: "There are no guarantees in the business world about success and failure. That is just the way business works, and everyone recognizes that." He added that "you cannot measure the success based on one company or the other."
That is all true enough, but then most businesses don't stick taxpayers with hundreds of millions of dollars in potential losses when they fail. The problem with politically directed investment isn't merely that bureaucrats are betting with someone else's money on industries they may not understand. Such investment also invites political favoritism for the powerful few at the expense of millions of middle-class taxpayers. Americans need to know the full story of who made or influenced the decision to give Solyndra its loan guarantee, and if political pressure was brought to bear.
Federal and state efforts to stimulate creation of green jobs have largely failed, government records show.
The heated Congressional investigation into the botched Bureau of Alcohol, Tobacco, Firearms and Explosives program Operation Fast and Furious reached a whole new level on Friday.
New emails obtained by the Los Angeles Times appear to show senior Obama administration and White House officials were briefed on the gun-walking operation. The three White House officials implicated by the LA Times’ reporting are Kevin M. O’Reilly, the director of North American Affairs for the White House national security staff; Dan Restrepo, the president’s senior Latin American advisor; and Greg Gatjanis, a White House national security official.
The emails were sent between July 2010 and February 2011, before the scandalous ATF program was exposed, according the LA Times.
The LA Times says a senior administration official denies that the emails which lead Fast and Furious ATF agent William Newell sent to O’Reilly — who later briefed Restrepo and Gatjanis –included details on “investigative tactics” used in the program. By “investigative tactics,” the White House means how ATF agents facilitated the sale of firearms to drug cartels via “straw purchasers,” or people who could legally buy guns in the U.S. but did so with the intention of selling them to individuals who would traffic them to Mexico.
Those emails apparently show Newell and O’Reilly discussing how the program was affecting Mexico.
Another explosive new detail that emerged on Thursday was a set of documents showing senior officials in Phoenix attempting to cover up a connection between Fast and Furious weapons and U.S. Border Patrol agent Brian Terry’s death.
In a letter sent to Ann Scheel, the new acting U.S. Attorney for Arizona, House Oversight committee chairman Rep. Darrell Issa and Sen. Chuck Grassley wrote that high-ranking Phoenix officials tried to “prevent the connection [between Terry’s death and Fast and Furious weapons] from being disclosed.”
Internal emails also show that recently resigned Arizona U.S. Attorney Dennis Burke and his deputy Emory Hurley made the decision because “this way we do not divulge our current case (Fast and Furious) or the Border Patrol shooting case.”
UPDATE 3:04 p.m.:
Though the White House has claimed these newly discovered emails didn’t contain any details on the “investigative tactics” officials used in Operation Fast and Furious, one comment has surfaced suggesting otherwise. Politico reports that, in an August 18, 2010, email to O’Reilly, Newell described the details of what was going on.
“I appreciate and respect the struggles the [U.S. Attorney’s Office] has to go through with juries in this State to convince them of the illegality of this. We routinely have ‘straw’ purchasers tell us that ‘yeah, I knew what I was doing was wrong but the money was good and who cares — the guns are going to Mexico right?’” Politico reports Newell wrote to O’Reilly last year.
