Solargate: we saw it coming

On May 26, 2010, President Obama stood before investors, management and employees of solar panel manufacturer Solyndra, and gave praise to the half-billion dollar guaranteed federal loan issued to the company via Stimulus funds. “It’s here that companies like Solyndra are leading the way toward a brighter and more prosperous future,” Obama proclaimed.

While Obama highlighted the company’s “cutting edge solar panels,” insiders knew the firm’s proprietary technology was actually “bleeding edge.”  In other words, the product was so unique that there was a high risk of it being unreliable and more expensive to employ than it was worth.

A month after the President’s speech Solyndra’s highly anticipated IPO of stock was suddenly cancelled.  A few weeks later the firm’s founder and CEO resigned.  The collapse of Solyndra, the great green hope of the Obama administration, was underway—and it was no surprise for many of us who live in the Silicon Valley.

Solyndra was the most well funded start-up in the history of the Valley. They had raised more initial capital than companies like Google, Amazon or Apple.  By the time Team Obama  stepped in the firm company had burned through a billion dollars of venture capital and no investors were willing to put down further cash.  Two of those investors included George Kaiser and Steve Westly, both Obama fundraisers.  Westly is California’s former State Controller and sits on the President’s energy advisory board.  Pumping federal money into their investment certainly might alleviate some of their risk.

When a listener to my radio program called at 5:05AM on August 31 to let me know that all Solyndra employees would be fired at 6 that morning, we new the gig was finally up.  Solyndra was a failure and taxpayers were on the hook for half-a-billion.

Now, thanks to the release of some key emails, we know the Obama White House tried to rush independent federal reviewers for a decision regarding the guaranteed loan to Solyndra so Vice President Biden could announce the deal at a September 2009 groundbreaking for the company’s factory.

The 2009 e-mails, released to The Washington Post and ABC News, show White House officials repeatedly asking Office of Management and Budget (OMB) reviewers when they would be able to decide on the federal loan, noting a looming press event at which they planned to announce the deal.  In one e-mail an OMB official referred to “the time pressure we are under to sign-off on Solyndra.” Another complained, “There isn’t time to negotiate.”  Still another analyst warned, “This deal is NOT ready for prime time.”

Obama was never ready for prime time as illustrated by this green debacle.   The Administration will twist and turn to find blame elsewhere, but Solyndra will prove to be Obama’s Solargate.

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Brian Sussman

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  1. One of my employees friends worked at Solyndra- thinking he had a great and secure job in a cutting edge company. Most employees had no idea the place was going bankrupt and had no idea their jobs were in danger until they received a layoff notice.

    Beyond the bad economic decision to invest a half billion into a venture that had gobbled up a billion in start up capital, is the underlying political contributions involved that smack of bribery.
    A full investigation needs to expose this charlatan of a President.
    Great article Brian! I did not know about the previous billion they had blown through- prior to Obama.

  2. Did you know that their independent auditor, PriceWaterhousCoopers, issued in March 2010 an opinion that raised concerns about Solyndra being able to continue to operate as a “Going Concern?” Such an opinion by an audit firm usually is followed by the company’s failure and is a huge red flag. Most likely that opinion contributed to the cancellation of the planned IPO. Any private sector lending officer would quickly disapprove a loan to an entity in such a bad financial position. But, such common sense obviously doesn’t apply to the lending hacks in the Department of Energy.

  3. Thank you for bringing to light this story. Please stay on top of it. Remeber, Watergate was just about a break in. At this level, it’s always about the lies and the cover up.

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