GO
Loading...

White House Emails Show Deep Tension Over Solyndra

Tensions over the now-bankrupt solar company Solyndra were deeper within the Obama Administration than had been previously revealed, according to newly disclosed White House emails.

Source:

The emails, which were put out by the Democratic staff of the House Energy and Commerce Committee in a memo Monday, show the staffs of the Department of Energy and Office of Management and Budget clashed repeatedly over the government’s more than $500 million loan guarantee to the untested company.

Officials at the OMB were deeply skeptical of the investment.

In April 2010, one OMB staffer emailed to another about what he apparently saw as the woeful state of the Department of Energy’s investments in the solar industry.

“What’s terrifying is that after looking at some of the ones [companies] that came next, this one started to look better,” the official, who was not named in the report, wrote. “Bad days are coming."

At the same time, the White House was warned about potential problems at the firm by at least two private-sector venture capitalists, and there was debate up to the day before the president held a public event at Solyndra’s headquarters about whether or not it was an appropriate company for the White House to spotlight.

In fact, venture capitalist Brad Jones of Redpoint Ventures, whose firm had invested in Solyndra, emailed his skepticism about the company to White House economic advisor Lawrence Summers as early as December 2009.

"One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million,” Jones wrote. “While that is good for us, I can’t imagine it’s a good way for the government to use taxpayer money."

Summers responded, "I relate well to your view that [government] is a crappy [venture capitalist], and if u were closer to it you’d feel more strongly." Jones did not immediately respond to a request for comment from CNBC.

A second private-sector investor, Steve Westly of The Westly Group, emailed his concerns about Solyndra to Valerie Jarrett, a senior advisor to President Barack Obama.

“A number of us are concerned that the president is visiting Solyndra. Westly wrote on May 24, 2010, the day before Obama’s scheduled appearance at the company’s headquarters.

“Many of us believe the company’s cost structure will make it difficult for them to survive long term,” Westly wrote. “I just want to help protect the president from anything that could result in negative or unfair press. If it’s too late to change/postpone the meeting, 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.”

Westly did not immediately respond to a request for comment from CNBC.

Jarrett passed along those concerns to Ron Klain, the chief of staff to Vice President Joe Biden, who responded that risk of bankruptcy was inherent to investments in new and emerging technologies.

“The reality is that if [the president of the United States] visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012 — but that to me is the reality of saying that we want to help promote cutting-edge, new-economy industries,” Klein wrote to Jarrett the day before the event.

Once the president’s visit was scheduled, one OMB staffer wrote to another about Solyndra: “Hope [it] doesn’t default before then.”

The congressional Democratic memo also shows that the lobbying firm Glover Park Group — which is well connected in Democratic circles — contacted the White House as early as July 2010 with talking points on behalf of Solyndra.

At the time, Glover Park Group was not registered to lobby on behalf of Solyndra. It did not disclose Solyndra as a client in government filings until 2011.

Ryan Cunningham, a senior vice president at Glover Park Group who wrote the email, works for the firm’s public relations division, said an official at Glover Park Group Monday.

Under the headings “Strong Future,” “Growth Market,” and “Made in the USA,” the email from Cunningham said Solyndra was “having big success with large big-box retail, distribution, warehousing and commercial real estate owners including recent installations including Anheuser Busch , Coca Cola , Costco and others.”

He also said the product was “ideally positioned… [with] a long-term sustainable competitive advantage.”

A spokesman for the Glover Park Group said the firm did not have to register as a lobbyist for Solyndra because its contact with the White House did not meet the legal threshold that mandates disclosure.

"Specifically, someone has to spend at least 20 percent of their time engaging in or supervising lobbying activities," said Glover Park's Jason Miner. "Ryan’s extremely limited contacts with the administration represented far less than that and so did not come close to triggering a filing."

Miner also said that Glover Park Group began working on the Solyndra account in July 2010, and it was not involved in helping the solar company land the government loan guarantees in the first place.

Congressional Democrats stressed Monday they’ve concluded Republican allegations that the Solyndra investment was rushed through under political pressure are not accurate.

In fact, they argue, “according to the documents, the decisions relating to Solyndra were made on the merits after vigorous debate and with awareness of the risks involved.”

Rep. Cliff Stearns of Florida, the Republican chairman of the Oversight and Investigations subcommittee of the House Energy and Commerce Committee, responded critically to the Democratic memo.

"Committee Democrats seem to put a greater premium on damage control rather than fact-finding," he said in a statement, "but these latest documents from a snapshot in May 2010 raise significant concerns."

Stearns said the documents show that "those closest to the president in the West Wing, advisors like Jarrett, Summers, Klain and Emmanuel, had direct involvement in the Solyndra mess, and that the Administration was fully aware of numerous red flags about Solyndra's viability, but pressed ahead anyway in an effort to secure a policy or political victory."

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Don't Miss

U.S. Video