House Republicans have been investigating the Obama administration's approval of $535 million in loan guarantees for solar-panel maker Solyndra for six months, but the company's sudden bankruptcy in late August — and a subsequent FBI raid — turned a little-noted inquiry into a potentially full-blown scandal. Before House Energy Committee hearings on Wednesday, GOP lawmakers released excerpts of subpoenaed emails purporting to show that the White House pressured budget staffers to approve the ill-fated loan prematurely. What exactly did House Republicans uncover? A concise guide:
What are the basic facts?
Solyndra applied for a federal Energy Department (DOE) loan guarantee in December 2006, and the loan was conditionally approved in March 2009, pending review by the Office of Management and Budget. The OMB gave final approval in September 2009. In February 2011, as Solyndra ran into financial trouble, the Energy Department helped the company refinance the loan, releasing another $67 million. Solyndra closed down Aug. 31, filing for bankruptcy and laying off 1,100 workers.
Of what is the White House accused?
Republicans say Obama gave special treatment to Solyndra. One possible factor behind that charge: The family foundation of billionaire George Kaiser, an Obama fundraiser, is one of Solyndra's big investors. The GOP says that Team Obama interfered to speed up the loan approval, cutting short due diligence so that Vice President Joe Biden could announce the loan at the Sept. 4, 2009, groundbreaking of a new Solyndra factory being financed by that government cash.
What new evidence has come to light this week?
On Tuesday and Wednesday, House Energy Committee Republicans released excerpts of emails they'd subpoenaed from the White House and Energy Department. Here is a sampling:
Before the DOE conditionally signed off on the loan on March 20, 2009:
March 6, between OMB staffers: "DOE staff just told me there's a 99 percent certainty that President Obama, on March 19 in California for other reasons, will announce that DOE is offering a loan guarantee to Solyndra. As far as I can tell the obligation won't be entered into until May, but once the President endorses it, I doubt seriously that the Secretary will withdraw for any reason."
March 10, OMB staffer: "This deal is NOT ready for prime time," since OMB hadn't complete its approval steps.
Before the OMB formally approved the loan guarantee in September 2009:
Aug. 27 between OMB staffers: "[G]iven the time pressure we are under to sign-off on Solyndra, we don't have time to change the model." Reply: "[A]s long as we make it crystal clear to DOE that this is only in the interest of time, and that there's no precedent set, then I'm okay with it. But we also need to make sure they don't jam us on later deals so there isn't time to negotiate those, too."
Aug. 31, from senior OMB official to Biden's office: "We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week). ... We would prefer to have sufficient time to do our due diligence reviews."
Aug. 31, from DOE staffer to OMB staffer: "I would prefer that this announcement be postponed. ... This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right."
Before the DOE helped refinance Solyndra's loan in February 2011:
Jan. 31, between OMB staffers: "[W]hile the company may avoid default with a restructuring, there is also a good chance it will not. ... At that point, additional funds would have been put at risk, recoveries may be lower, and questions will be asked."
What does the Obama administration say?
DOE loan director Jonathan Silver said on Wednesday that his staff didn't feel pressure to green-light the loan quickly, that it was approved "on the exact schedule that had been developed during the Bush administration," and that unexpected market forces — a sharp drop in silicon prices and heavily subsidized competition from China — were at least partially responsible for Solyndra's decline. Solyndra "underwent years of rigorous internal and external review before being approved," says Deputy Energy Secretary Daniel Poneman in USA Today, "before the perfect storm of deteriorating market conditions" sank it.
Will this scandal damage the White House?
This "colossal green stimulus failure" certainly raises "the prospect of an ugly scandal," says the Chicago Tribune in an editorial. If "taxpayer dollars were put at undue risk for the sake of an administration photo op," as the evidence suggests, Obama has some questions to answer. "Meh," says Bryan Walsh at TIME. In terms of political influence, "there's nothing here that makes the Solyndra debacle special." It's just typical D.C. lobbying. Indeed, "the Solyndra story is unlikely to harm Obama politically in the way that some conservatives are probably dreaming," says Doug Mataconis at Outside the Beltway, but it will sting, especially by crippling his "green jobs" meme and credibility on the economy.