Administration weighed second Solyndra loan despite struggles, emails show

The Energy Department last year weighed granting the now-bankrupt solar panel company Solyndra a second loan guarantee worth $469 million to further expand production despite signs the company was struggling, emails among White House Office of Management and Budget staff show.

One message suggests that OMB staff believed the second loan guarantee was close to winning Energy Department approval, a notion the department is rebutting.
 
{mosads}“I’ve been told we should expect to see that project soon for conditional commitment,” notes an April 8, 2010, email among OMB staff that was released by Energy and Commerce Committee Democrats.

The emails show that an OMB staffer was alarmed at the prospect of giving more financing to the solar panel company, which had received a $535 million guarantee for a new factory in 2009. An early April email thread about the company’s woes includes a message stating, “Possible to close and default on one before closing on a second??? Could be a record.”

The Washington Post flagged the emails earlier on Wednesday. Solyndra has been the subject of intense scrutiny since it went belly-up in late August.

The second loan guarantee was never granted. Damien LaVera, a spokesman for the Energy Department, pushed back on the idea that DOE was anywhere close to approving a commitment for the second loan guarantee.

“In fact, the career staff at the Department had only barely begun to do the due diligence that would have been required for a second loan,” he told The Hill in an email.

“This application would have had to undergo many more months of analysis before being approved, but the Department and Solyndra mutually agreed that the application should not receive further consideration,” he said.

{mossecondads}According to DOE, the department told Solyndra in March of 2010 that the second guarantee it applied for in November of 2009 would be contingent upon the achievement of milestones in their first project, which received the $535 million guarantee.

Solyndra is the subject of multiple congressional probes after its late August collapse and subsequent bankruptcy filing.

Republicans have pounced on the company’s woes, alleging the administration failed to properly vet the financing and that White House officials rushed its approval for political reasons. They’re more broadly alleging Solyndra’s collapse it shows that green-jobs efforts are ineffective.

Defenders of the green-energy loan programs say nothing inappropriate occurred, and that the failure of one company doesn’t dent the case for helping to finance emerging green industries.

The emails released by Democrats this week show White House officials concerned about the financing for Solyndra and President Obama’s personal visit at its factory in 2010.

In the days before the visit, an OMB official wrote an email to a colleague that said, “Hope doesn’t default before then.”

The Hill has much more on those messages here and here.