Less than three months before declaring bankruptcy, the federally-backed solar power company Solyndra sent a memo to Congress describing the company as “ramping” up its production, “competitive” with foreign rivals, and “on track” to hit its financial targets for the year.
The document obtained by ABC News, entitled “Exceeding Expectations: Solyndra Today,” now appears to have grossly distorted the company’s actual financial standing at a time when congressional investigators were already asking tough questions about the $535 million in federal backing Solyndra had received.
Since Solyndra sent the document to Congress on June 23, followed by a mid-July letter making more claims about its financial strength, the company has laid off nearly its entire workforce, has declared bankruptcy, and has been raided by the FBI.
The promises to the House Energy and Commerce Committee’s investigative subcommittee arrived this summer, after the subcommittee’s investigation into the massive federal loan to Solyndra had already been underway for months. In March, iWatch News and ABC News began reporting on simmering questions about the role political influence may have played in Solyndra’s selection as the Obama administration’s first loan guarantee recipient.
The June memo and July letter both appeared to be efforts to counter claims that the company was in financial trouble, saying they were providing “the most accurate and up-to-date information.”
The letter, signed by Solyndra CEO Brian Harrison, said, among other things, that the company had just completed a “record quarter for shipments,” and that it was using “American innovation and ingenuity to compete on the global solar market.” Later, Solyndra would blame competition from China for its downfall. Solyndra declared bankruptcy on August 31.
Congressional investigators have also released a copy of a Sept. 10, 2011 email from an attorney for Solyndra to staff of the House Energy and Commerce Committee stating that the company’s CEO “will appear voluntarily and answer the Committee’s questions on any day the Committee chooses.”
Just days later, an attorney for Harrison, the Solyndra CEO, wrote back to say his client would not answer any questions from the committee, and planned to invoke his Fifth Amendment rights when he appears before the committee Friday.
“This is not a decision arrived at lightly, but it is a decision dictated by current circumstances,” wrote Walter F. Brown Jr., the lawyer for Solyndra CEO Brian Harrison in a letter to Congress.
Among those circumstances, the lawyer said, is a broadening investigation by the FBI and the U.S. Department of Justice into the Obama administration’s decision to loan $535 million to the California solar power company, and the abrupt financial ruin of the firm, which shut its doors late last month.
‘Who Exactly Are Solyndra’s Executives Trying to Protect?’
Members of the House Energy and Commerce Committee expressed outrage that the executives — after promising to freely answer questions — would now insist on remaining silent.
“Who exactly are Solyndra’s executives trying to protect and what are they trying to hide?,” said a statement released by Energy Committee Chairman Fred Upton, R.-Mich., and Rep. Cliff Stearns, R-Fla., who chairs the oversight and investigations subcommittee.
“We have many questions for Solyndra’s executives on their dealings with the Obama administration, their efforts to secure federal support for a project that appeared doomed from the outset, and why they made certain representations to Congress regarding their dire financial situation just two months ago,” the statement said.
Friday’s hearing was intended to be the second act to hearings held last week, during which a senior Energy Department official and a top White House budget analyst attempted to explain why they decided to grant the loan to Solyndra, and why they agreed to restructure the loan after it became increasingly clear the firm was in dire financial trouble.
The path taken by Solyndra’s application for a massive government loan was just one of several questions explored by members of the House investigative subcommittee last week. Members grilled Jonathan Silver, head of the Energy Department’s loan program, and Jeffrey Zients, deputy director of the Office of Management and Budget, as to why the initial loan was approved, and why the Solyndra deal was restructured earlier this year. The restructuring came at a time when the company was already showing signs of financial stress, with Chinese competitors offering similar products for less money.
Damien LaVera, an Energy Department spokesman, has told ABC News that the decision to restructure the loan was intended to salvage the government’s initial investment. “Since the restructuring went forward, if anything, this email is yet another piece of evidence that political or optical considerations took a backseat to putting the company and its workers in a better position to succeed and repay the loan,” he said.
On Wednesday, the House committee investigating the deal escalated its inquiry by seeking information from Solyndra’s prime investors — including Oklahoma oil billionaire George Kaiser, a bundler of campaign contributions to the president in 2008.
That quest for information shifts the spotlight from DOE to the big money players behind Solyndra: Kaiser’s Argonaut Private Equity, and another group, Madrone Capital Partners. Kaiser and other investors get to recoup their $75 million investment earlier this year before the U.S. government stands in line in Solyndra’s bankruptcy proceedings.
The House committee said it sent letters to Argonaut and Madrone seeking documents on the $535 million loan guarantee, the investors’ $75 million financing this year — and any communications with the Obama administration, including telephone calls between the White House and companies. Kaiser has not responded to interview requests from iWatch News and ABC News since March.
The loan had been shelved by the Bush administration but was fast-tracked just days after President Obama took office, and one of the major investors in the company is an Obama fundraiser — Oklahoma billionaire George Kaiser — who has visited the White House 16 times, including four meetings with such senior aides as Valerie Jarrett, Austan Goolsbee and Pete Rouse in the months prior to the loan’s approval.
The White House has maintained that those meetings covered other topics — including Kaiser’s charitable work. And both the White House and the Department of Energy have been steadfast in their position that politics played no role in the decision to grant Solyndra the loan.
“The Department of Energy conducted exhaustive reviews of Solyndra’s technology and business model prior to approving their loan guarantee application,” said LaVera,. “Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment.”