Officials warned White House about Obama visit to Solyndra plant

The White House was warned that President Obama’s visit in 2010 to a Solyndra factory could prove embarrassing if the company went bankrupt, emails released Monday show.

In the days before Obama visited the solar company’s facility on May 25, 2010, an official at the Office of Management and Budget (OMB) wrote an email to a colleague that said, “Hope doesn’t default before then.”

{mosads}The concerns about the Solyndra visit made their way to the White House when Steve Westly, managing partner of the Westly Group, urged caution in a May 24 email to senior adviser Valerie Jarrett.

“Many of us believe the company’s cost structure will make it difficult for them to survive long term,” Westly wrote.

If the Solyndra visit couldn’t be postponed, he warned, the president “should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.”

The revelations came in a detailed memo that provides insight into the 2009 decision to provide a $535 million loan guarantee to the now-bankrupt solar firm.

Democrats on the House Energy and Commerce Committee released the documents Monday in an attempt to clear the White House of charges from Republicans that the Solyndra loan was approved hastily for political reasons. 

“The documents show that senior officials were aware of Solyndra’s risks, that they consulted with the relevant officials, and that they made their decisions based on their assessment of the merits, not political influence,” the memo says.

But the documents also offer more ammunition to Republicans as they continue their investigation into the Solyndra bankruptcy.

The seven-page memo — which was culled from 685 pages of newly released White House documents — details a behind-the-scenes struggle between officials at the White House Office of Management and Budget and the Energy Department over Solyndra’s financial outlook.

OMB officials pointed to a March 2010 audit done by PricewaterhouseCoopers to raise concerns about the financial stability of the company, the emails show. 

In one email, an OMB official said: “I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future, given 1) what we just heard today from DOE that Solyndra is delaying their IPO at least until the end of the year, and 2) what the auditors said about Solyndra making it through the year absent new financing.” Solyndra canceled plans to go public in June of 2010.

But Energy Department officials downplayed the warnings, insisting that Solyndra was on solid financial ground.

After consulting with Energy Department officials, the White House decided to move forward with the event.

Solyndra declared bankruptcy in early September and laid off 1,100 workers, generating a firestorm in Washington.

“Whether one thinks the decisions were right or wrong, there appears to be no basis for questioning the integrity of the decisionmakers,” the memo said.

While there were internal disagreements about the loan guarantee within the administration, Democrats say in the memo, those disagreements were focused on the merits of the loan guarantee, not politics.

“The documents show that there was internal disagreement within the Administration about Solyndra’s viability and the effectiveness of the loan guarantee program throughout the process,” the memo from Democrats says. “According to the documents, the decisions relating to Solyndra were made on the merits after vigorous debate and with awareness of the risks involved.”

Democrats on the committee argue that neither the new documents nor the tens of thousands that had been previously obtained by Republicans “contain evidence that government decisions relating to Solyndra were influenced by considerations relating to campaign donations.”

In making this distinction, however, Democrats revealed new details that could be a headache for the Obama administration.

The memo, for example, bolsters GOP criticism of the Energy Department’s handling of the loan guarantee.

Republicans have increasingly turned their attention to the role that Energy Secretary Steven Chu played in green-lighting the loan guarantee and then restructuring the agreement in February as the company struggled to stay afloat.

Republicans on the committee’s investigative panel have called on Chu to testify about his role in approving the Solyndra loan guarantee.

In 2010, months after the administration finalized the $535 million loan guarantee, OMB officials worried that the Energy Department was not adequately tracking Solyndra’s mounting financial problems, the memo shows.

“DOE’s ‘system’ for monitoring loans is quite problematic (barely any review of materials submitted, no synthesis for program management, inherent conflicts in origination team members monitoring the deals they structured, etc.) and does not seem to be a program priority,” one official wrote in an email in March of 2010.

In April of 2010, an OMB analyst raised concerns that Solyndra, which received the first loan guarantee under a program funded under the 2009 stimulus law, could default before DOE had a chance to issue any more loan guarantees.

“Possible to close and default on one before closing on a second??? Could be a new record,” the analyst said in an email to a colleague at OMB, citing a March 2010 PricewaterhouseCoopers audit that raised questions about Solyndra’s financial state.

Another OMB official wrote an email to a DOE official in April of 2010 warning that the department faced program-wide problems in monitoring its loan guarantees.

“What’s terrifying is that after looking at some of the ones that came next, this one started to look better. … Bad days are coming,” the official said.

But the Energy Department downplayed concerns about Solyndra at the time, insisting that the company had complied with the terms of the loan guarantee.

The company’s manufacturing facilities are “progressing on time and on budget,” an Energy Department official told an OMB official in a March 31, 2010, email.

In a separate incident, the Energy Department reassured top White House officials in May 2010 that Solyndra’s financial outlook was stable amid concerns that Obama should not visit the company’s manufacturing facility.

“The company should be strong going into the fall with their new facilities on line,” an Energy Department official wrote in an email to Ron Klain, Vice President Biden’s then-chief of staff, who had been tasked with assessing the company by Jarrett.

Obama ultimately visited the Solyndra facility on May 25, 2010, and praised the company as part of his green jobs push. Republicans pounced on the visit once the company declared bankruptcy.

The White House has adamantly denied any wrongdoing related to the Solyndra loan guarantee, and the Energy Department has vowed to continue investing in clean energy.

Obama, in an interview with ABC News and Yahoo! News Monday, said he doesn’t regret holding up Solyndra as a model for jobs and clean energy.

Obama said “there are going to be some failures” in the loan guarantee program.

“And what we always understood was that not every single business is going to succeed in clean energy, but if we want to compete with China, which is pouring hundreds of billions of dollars into this space, if we want to compete with other countries that are heavily subsidizing the industries of the future, we’ve got to make sure that our guys here in the United States of America at least have a shot,” he said.