Democrats say Solyndra scandal touches Republicans, too
The collapse of solar equipment maker and stimulus loan recipient Solyndra is now officially a political hot potato, tossed first into Democratic hands and today batted by the Democrats over to the Republican side.
Solyndra got a $535-million loan as part of the stimulus package in late 2009 and was held up by the Obama administration as a powerful example of the kind of innovative manufacturing that would revive the economy. But in the last few weeks it has suspended operations, laid off 1,100 workers, filed for Chapter 11 bankruptcy and had its offices and executives’ homes raided by the Federal Bureau of Investigation.
Republicans have speculated that Solyndra got the loan because its biggest investor has ties to George Kaiser, a major fundraiser for President Obama in 2008. The House Energy and Commerce committee is investigating the loan and will hold a hearing Wednesday.
Administration officials will testify, but Solyndra executives begged off at the last minute and will appear at another hearing by the committee next week, the committee said.
The company said in a statement that the executives were busy with the bankruptcy and were discussing a new hearing date with the committee.
“Given that it is in the best interest of all creditors, including the U.S. government, to attempt to gain maximum value for the Solyndra assets, either via sale of the whole company or in parts, including its intellectual property, it is in the best interest of all interested parties for them to remain in California to engage with potential purchasers,” the company said.
Democrats have found enough information in public records of the Energy Department’s loan approval process and from media reports to try to widen the Solyndra scandal to Republicans.
Although Solyndra’s biggest private investor was a venture capital fund affiliated with Kaiser, its second largest investor was a fund linked to the Walton family, of Wal-Mart renown, a major donor to Republicans. Kaiser has denied he ever spoke to the Obama administration about the Solyndra loan.
The chief executive of Solyndra, Brian Harrison, is a registered Republican, according to the San Jose Mercury News.
The Democrats’ main defense against accusations of administration cronyism is that Solyndra applied for the Energy Department loan as part of a program created by the Bush administration. Memos prepared by the Republican and Democratic staffs of the House Energy and Commerce committee said Solyndra first applied for an Energy Department loan in 2006. Its plan to build a factory to manufacture a new kind of solar technology was one of 16 projects chosen from about 140.
In January 2009, shortly before President Obama took office, Energy officials reviewed the application. They said that “the project appears to have merit” but did not approve the loan, requesting additional information, including an independent market analysis of the company’s long-term prospects, according to the Republican staff memo.
In March 2009, after the analysis was submitted, Energy Department officials reviewed the application again and gave conditional approval. The March 2009 timetable was set under the Bush administration, according to the Energy department.
Officials from the White House Office of Management and Budget reviewed Solyndra’s application in August 2009 and “questioned whether the risk rating assigned to the Solyndra deal was too high” and how “competitive pressures” in the market for solar cells might affect the company’s ability to repay, the Republican memo said.
OMB officials recommended unspecified changes to the deal that the Energy Department approved, and it was completed in September 2009.
-- Neela Banerjee and Jim Puzzanghera
Photo: An FBI agent carries a box from Solyndra's Fremont, Calif., headquarters last week. Credit: Associated Press.