E-Mail Shows Senior Energy Official Pushed Solyndra LoanBy ERIC LIPTON and JOHN M. BRODERPublished: October 7, 2011
WASHINGTON — A senior Energy Department official pushed hard for the government’s $535 million loan to the California solar energy company Solyndra even after he had disclosed that his wife’s law firm represented the company and promised to recuse himself from matters related to its loan application, according to e-mails released by federal officials on Friday.
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The official, Steven J. Spinner, a senior member of the Energy Department’s loan guarantee oversight office and a 2008 Obama fund-raiser, inquired frequently about the progress of the Solyndra loan, urging the White House Office of Management and Budget to move more quickly on approving it. He also communicated directly with Solyndra officials who were anxiously awaiting an announcement from Washington that their loan would be approved.
“Any word on OMB?” he asked another Energy Department loan officer. “Even Solyndra’s getting nervous.”
When he was told that the White House seemed to be dragging its feet, he responded, “This is beyond ridiculous.”
The new e-mails provide further evidence of high-level cheerleading on behalf of Solyndra, a maker of innovative tubular rooftop solar panels that declared bankruptcy last month and laid off 1,100 workers. The company was the first recipient of a federally guaranteed loan for alternative energy projects and had been held up as a model of how the government can assist green energy projects and create private-sector jobs.
The latest e-mails also show that senior White House and Treasury Department officials voiced concerns at all stages of the ultimately failed loan to Solyndra, asking whether the company and its products had a viable market and whether the Energy Department was adequately protecting the public money invested in the company.
President Obama defended the loan guarantee program in a news conference on Thursday, but two House committees and the Department of Justice are investigating whether Solyndra obtained its federal loan fraudulently and whether the Obama administration adequately oversaw the granting of the loan.
The new batch of e-mails reveal further tension within the administration between some White House officials who were concerned about the health of the company and the speed with which the loan package was moving, and others eager to hurry it along to make a public relations splash.
The latest e-mails also show that days before the Obama administration gave conditional approval to the Solyndra federal loan guarantee, a major investor behind the deal met with Carol Browner, the White House coordinator for energy and climate change policy.
The investor, David J. Prend, a co-founder of Rockport Capital, a high-technology venture capital firm, met with Ms. Browner in late February to push for rapid approval of the Solyndra loan.
“It was great to meet with Carol Brower last week,” Mr. Prend wrote in a March 4, 2009, e-mail, two weeks before the Department of Energy issued a conditional approval for the loan. “I look forward to working with you to get the message out and to effect real change in the Energy Industry. I will follow up shortly on 2 of the companies we discussed.” He included in the e-mail a link to the Web site for Solyndra.
Solyndra’s chief executive at the time, Chris Gronet, then wrote to the White House on March 6 to reinforce Mr. Prend’s message, after being contacted by Mr. Prend and told to follow up with the White House.
“We just need to complete the DOE process and raise the equity portion of the project!” Mr. Gronet wrote. “The company is ramping up production to meet a very strong demand.”
Greg Nelson, a midlevel White House staff member, wrote back to Mr. Gronet on March 8, 2009: “It looks like a great product, and the plans for Fab 2 are inspiring,” referring to the manufacturing plant that the federal government would finance. “Keep us informed about your conversations with DOE, and any increase in demand you see based on the recovery act or loosening of equity capital. We’re hopeful we can impact that yet.”
Within days, the Energy Department’s credit committee voted to approve the conditional $535 million loan. It was publicly announced on March 21.
That day, Mr. Nelson wrote to his contact at Solyndra, “Many congrats on the DOE news. That is fantastic.”
Department of Energy documents indicate that Mr. Spinner was a senior member of the team involved in vetting the loans and was instrumental in the Solyndra package. His wife, Allison B. Spinner, is a partner at Wilson Sonsini Goodrich & Rosati, a Palo Alto, Calif., law firm that represents dozens of Silicon Valley technology firms.
“As agreed, I will recuse myself from any active participation in any of these applications,” he wrote in September 2009, after sending dozens of e-mails in August to the head of the Energy Department loan program and other energy and Obama administration officials asking about the Solyndra project, particularly in the final days before it received final approval that September.
At that time, officials from the Office of Management and Budget were complaining that they were being rushed to approve a deal about which they had significant financial concerns.
Administration officials said Friday that just because Mr. Spinner was involved in helping coordinate the final steps necessary in the summer of 2009 to clear up disputes with the Office of Management and Budget so that the administration could commit the money to Solyndra, it does not mean he violated his agreement not to play a role in formally evaluating the loan application. By August 2009, the official said, the Energy Department had already initially recommended granting the loan guarantee to Solyndra, meaning the loan application process by the Energy Department was essentially complete.
The e-mails released Friday show that Mr. Spinner acknowledged he was supposed to recuse himself from matters related to the Solyndra application, as of September 2009. But an administration official said he had previously discussed this potential conflict of interest with an Energy Department officially — meaning he had made the commitment before the exchange of e-mails he was involved with regarding Solyndra that were released Friday.
The administration official would not respond when asked repeatedly if Mr. Spinner’s intervention was inappropriate.
Mr. Spinner also communicated directly with executives at Solyndra, writing to Kelly Truman, a company executive, on Sept. 1, 2009, three days before the loan commitment was announced.
Despite the eagerness of Mr. Spinner and other Energy Department officials to see the Solyndra loan approved, other administration officials continued to raise red flags about the viability of the company and the completeness of the loan application package.
An Aug. 19, 2009, e-mail from Aditya Kumar, who worked for Rahm Emanuel, then the White House chief of staff, raised one such question to Mr. Spinner.
“Folks here want to know what the funding community thinks of the Solyndra deal, and whether there are any concerns there. Can we set up 15-30 minutes to talk?”
They agreed to have a telephone conversation to discuss questions that had apparently been raised about the company. Even before the call, Mr. Spinner wrote back on April 19, 2009: “What are the specific concerns on this topic? It’s a great announcement that will be well received. Any type of feedback on your side would be helpful for me to address any concerns appropriately and accurately during the call.”
Mr. Kumar responded: “Energy and Climate Change Office said there were concerns around what the funding community thinks of this. I have no idea what they’re referring to, but I want to vet this concern so if you could have your team do any looking into this possible before 10:30, that would be great.”
A call did take place. And the deal, which had already received a conditional green light, kept moving.
There are also new e-mails from August 2011 about Solyndra as it neared its collapse, between two White House budget office career employees whose names were blacked out. The messages note that the issue had risen to the level of the National Economic Council and the chief of staff’s office.
The e-mails show that the Office of Management and Budget objected to a plan in early 2011 by the Energy Department to restructure the Solyndra loan, as the company was already near bankruptcy.
“Prior to this restructuring, OMB staff expressed reservations about the prospects of the company and DOE’s proposal,” one e-mail reads. “The issue was discussed with the NEC and the Chief of Staff. In the end, citing DOE’s expertise in the transaction, OMB deferred to DOE’s determination that the proposed restructuring would result in better recoveries for U.S. taxpayers than had DOE called for default and taken over the assets immediately. OMB staff specifically cited concerns about the company’s ability to meet their projections, subordination of the DOE loan, and the likelihood that Solyndra’s investors may not ultimately provide the additional capital the company required to continue operations.”
““Unfortunately,” the message continued, “the scenario which OMB staff had feared has materialized.”
A Treasury Department official objected to the decision by the Energy Department that allowed company investors to get first in line among creditors, instead of the federal government, for part of their investment.
“Our legal counsel believes that the statute and the DOE regulations both require that the guaranteed loan should not be subordinate to any loan or other debt obligation,” said an Aug. 17, 2011, e-mail from a Treasury official to Jeffrey D. Zients, a top official at the Office of Management and Budget.
An administration official said Friday that the Energy Department disagreed with this interpretation and believed that it did have the legal authority to give priority to private investors in order to secure additional financing. |
