The Center for Public Integrity

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."

Two top executives from the embattled company Solyndra will appear before Congress later this week, but their lawyers announced today that they will invoke their Fifth Amendment rights and decline to answer questions, ABC News reports.

"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.

"It would be irresponsible for anyone in his position not to [take the Fifth]," wrote Jan Nielsen Little, the lawyer for Solyndra's chief financial officer, W.G. Stover, Jr., in a separate letter.

In a statement, a Solyndra spokesperson said Harrison and Stover would be "unable to provide substantive answers to the Subcommittee's questions," and said that "present circumstances require both gentlemen to exercise their Fifth Amendment rights."

The statement added that Solyndra is unaware of any wrongdoing by company officials related to the loan guarantee "or otherwise," and is cooperating with federal investigators. "The company believes that the record will establish that Solyndra carefully followed the rules of the competitive application process, starting in December 2006 under the Bush administration and continuing under the Obama administration."

Members of the House Energy and Commerce Committee, which has been conducting its own investigation into the loan, expressed outrage that the executives -- after promising to freely answer questions -- would now insist on remaining silent.

White House budget analysts warned in January that a controversial decision to restructure a $535 billion government loan to a struggling solar power company "could easily be portrayed as bad judgment or worse," just-released emails now show.

The latest emails are part of an emerging portrait of the troubled government loan—a half-billion-dollar federal investment that went from being touted as a model of President Obama's "green jobs" initiative to being criticized by Republicans as an ill-advised boondoggle.

Beginning in March, the Center for Public Integrity’s iWatch News, in partnership with ABC News, was first to report on simmering questions about the role political influence may have played in Solyndra Inc.'s selection as the Obama administration's first loan guarantee recipient. 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 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.

Senior Energy Department officials publicly described the decision in January to restructure the loan to Solyndra as a hiccup, and said the extra infusion of cash was normal for start-up ventures. "I have never seen a company go straight up without a bump along the way," Energy Loan chief Jonathan Silver told iWatch News and ABC News in May. "I have no doubt they will continue to hire more people."

On August 20, 2009, an Energy Department staffer examining a pending loan to a California clean energy start-up came to a startling conclusion: The company would run out of money by September 2011. The government would, in effect, be placing taxpayers on the hook for a business likely to founder.

Still, things moved – and fast.

Only 15 days after the staffer’s warning, the Obama administration announced its commitment to lend Solyndra Inc., a California manufacturer of rooftop solar panels, $535 million as part of the stimulus program to spark the nation’s sagging economy and put Americans back to work.  

Energy Secretary Steven Chu attended the groundbreaking of Solyndra’s new Fremont, Calif., factory, to be built with the money. Vice President Joe Biden, speaking on a big-screen TV set up amid construction equipment at the site, noted the “unprecedented investment this administration is making in renewable energy” and asserted that “we are not only creating jobs today but laying the foundation for long-term growth.”  

But the staffer had been right.

Solyndra ran out of money, sure enough -- and in the very month foreseen. Some 1,100 workers immediately lost their jobs and creditors now are circling in bankruptcy proceedings, where taxpayers come second to private investors. The company that the Obama administration had helped catapult from relative obscurity to poster child for the green energy movement has instead become a symbol for critics to exploit of environmental and economic recovery policies gone awry -- and for assertions of cronyism. The company's prime investor had been a major fundraiser for President Obama's 2008 campaign. 

The Treasury Department’s inspector general has opened a new front in the investigation of the government loan to Solyndra, the now bankrupt company that had been touted as a model of President Obama’s ambitious green energy program, the Center for Public Integrity and ABC News have learned.
 
The new probe involves the $535 million loan, arranged by the Energy Department, but actually processed by the Federal Financing Bank, a government lending institution that falls under Treasury’s control. Already, the FBI and the Energy Department’s inspector general have executed search warrants at Solyndra’s headquarters and questioned company executives.
 
“We’re going to look at everything the FFB had to do with its role in this thing,” Rich Delmar, a spokesman for the Treasury Department’s inspector general, told ABC News and iWatch News.
 
Word of the broadening probe came as the head of the Energy Department’s loan program came before congress at a contentious hearing on Capitol Hill Wednesday.

Earlier this month,  iWatch News  and ABC News disclosed that Solyndra received an interest rate of 1 to 2 percent -- lower than those affixed to other Energy Department green energy projects. The low rate was set even as an outside agency, Fitch Rating, scored Solyndra as a B+ -- "speculative" -- investment. Energy Department officials said the bank set the rate, based on formulas including the payout length, and that Solyndra did not receive special treatment.

Newly uncovered emails show the White House closely monitored and tried to rush Energy Department deliberations over whether to make a $535 million taxpayer-backed loan to Solyndra, a politically-connected solar energy firm that went bankrupt and now is the focus of a criminal investigation.

The company’s solar panel factory was heralded as a centerpiece of the president’s stimulus-backed green energy plan – billed as a way to jumpstart a promising new industry while creating jobs. The internal emails, excerpts of which were obtained by iWatch News and ABC News, show the Obama administration keenly monitored progress of the loan, even as analysts voiced serious concerns about the risk involved.

With Obama about to take a trip where he might be able to announce the loan in March 2009, top White House officials were pressing for a quick answer.

“If you guys think this is a bad idea, I need to unwind the WW [West Wing] QUICKLY,” wrote Ronald A. Klain, then chief of staff to Vice President Joe Biden, in an email sent March 7, 2009.

Three days later, an analyst at the Office of Management and Budget cautioned against moving too quickly. “This deal is NOT ready for prime time,” the analyst wrote in a March 10, 2009 email.

Only 10 days later, the Energy Department formally announced its commitment to guarantee the loan, which the administration had fast-tracked as the first green energy project backed by stimulus dollars.