Solyndra, a California-based solar panel = manufacturer, declared bankruptcy in August 2011 after having received = $528 million in federal loan guarantees.

The loan guarantees, = part of the 2009 stimulus package, were the first to be allocated out of = the $18 billion Congress has committed to dole out. But the failure of = Solyndra =97 which could cost taxpayers more than a half-billion dollars = =97 has renewed the highly partisan debate in Washington over the = benefits or failings of Mr. Obama=92s stimulus program and the wisdom of = clean energy subsidies in general.

Solyndra=92s problem, = according to outsiders, was that the product looked better when it was = conceived than when it hit the market. Solyndra=92s design avoided the = use of silicon, a commodity that was selling at very high prices in 2009 = when the loan guarantee was approved but that since = crashed.

The design also sought to cut costs with an = innovative cylindrical design that reduced the labor required for = installation. But the capital costs for manufacturing were high. At the = same time, Chinese companies had ramped up their output, flooding the = market and pushing down the price of solar equipment at a time when = slack demand in Europe contributed to a surplus.

Solyndra = became one of the administration=92s most costly fumbles after the = company declared bankruptcy, laid off 1,100 workers and was raided by = F.B.I. agents seeking evidence of possible fraud.

Although = the government in such programs typically guarantees loans made to a = company by a commercial bank, this was not the case for Solyndra. It = borrowed the money from the Federal Financing Bank, part of the Treasury = Department, so in effect, the government was lending the money to the = company directly. The Energy Department gave Solyndra a conditional = guarantee for $535 million, in multiple stages, contingent on reaching a = variety of milestones, and it had received $528 million before going = under.

The Solyndra loan guarantee was the Obama = administration=92s first. The administration, seeking to forge a = =93clean energy=94 economy and provide jobs in the face of a growing = recession, picked the project partly because it was what government = officials were then fond of calling =93shovel ready.=94

The = government=92s backing of Solyndra came as the politically = well-connected business began an extensive lobbying campaign that = appears to have blinded government officials to the company=92s = financial condition and the risks of the investment, according to a = review of government documents and interviews with administration = officials and industry analysts.

Two Congressional subcommittees, the = Department of Energy=92s inspector general and the Department of = Justice, are investigating the Solyndra case.

On Sept. 23, the chief executive and chief financial = officer of the company took the Fifth Amendment before a House = subcommittee as they were verbally pummeled by committee members until = Democrats complained that the badgering was becoming = unseemly.

On Oct. 7, according to e-mails provided to = Congressional investigators, a senior Energy Department official had pushed hard for the government=92s loan, even after he = had disclosed that his wife=92s law firm represented the company and he = had promised to recuse himself from matters related to the loan = application. The official, Steven J. Spinner, then a senior member of = the Energy Department=92s loan guarantee oversight office and a 2008 = Obama fund-raiser, inquired frequently about the progress of the = loan, urging the White House budget office to move more quickly on = approving it. The e-mails provided further evidence of high-level = cheerleading on behalf of Solyndra.

On Nov. 17, testifying = before a subcommittee of the House Energy and Commerce Committee, = Secretary of Energy Steven Chu defended the loan, = telling lawmakers that the = bankruptcy of Solyndra was =93extremely unfortunate.=94 He also = rejected a suggestion put forward by a Republican that he or his = department should apologize.

Companies fail when =93the = bottom of the market falls out,=94 Mr. Chu testified. That, he said, is = what happened to the solar panel business, for two reasons that he = maintained could not be foreseen. =93This company and several others got = caught in a very, very bad tsunami,=94 he said. New plants to = manufacture solar panels started up in China and elsewhere, while the = market for the panels was softening because of economic troubles in = Europe. Prices dropped 70 percent in two and a half years, he = said.

But Republicans pursued the theme that the problem was = incompetence and political influence. Representative Clifford Stearns, = Republican of Florida, said that the policy was simply an effort to keep = President Obama on a =93green jobs pedestal.=94

A = Case of Political Favoritism?

After the bankruptcy, = Republicans on a House subcommittee charged that a final review of loan = guarantees for Solyndra may have been rushed so that Vice President = Joseph R. Biden Jr. could announce its approval at a groundbreaking in = 2009.

They released a string of e-mails that had been sent among = White House staff that they said raised questions as to whether the = Solyndra loan guarantee was pushed to approval before it was ready. But = at a hearing, officials of the Energy Department=92s loan office and the = White House budget office defended their decisions, which they said were = carefully reviewed and not politically inspired.

Democrats on = the panel did not come to Solyndra=92s defense, but they did defend the = idea of government help for the solar industry, arguing that China is = doing so on a large scale and that the United States must compete. = Officials from the Department of Energy backed this notion, explaining = that government subsidies are essential to keep the United States = competitive in renewable energy, and that naturally not all companies = will succeed.

Solyndra=92s problem, according to outsiders, = was that the product looked better when it was conceived than when it = hit the market. Solyndra=92s design avoided the use of silicon, a = commodity that was selling at very high prices in 2009 when the loan = guarantee was approved but that since crashed.

The design = also sought to cut costs with an innovative cylindrical design that = reduced the labor required for installation. But the capital costs for = manufacturing were high. At the same time, Chinese companies had ramped = up their output, flooding the market and pushing down the price of solar = equipment at a time when slack demand in Europe contributed to a = surplus.

Solyndra did draw plenty of high-level attention. = Its lobbyists corresponded frequently and met at least three times with = an aide to a top White House official, Valerie B. Jarrett, to push for = loans, tax breaks and other government assistance.

During the = period when Solyndra=92s loan guarantee was under review and management = by the Energy Department, the company spent nearly $1.8 million on = Washington lobbyists, employing six firms with ties to members of = Congress and officials of the Obama White House. None of the other three = solar panel manufacturers that eventually got federal loan guarantees = spent a dime on lobbyists.

A critical piece of the stimulus = bill removed a requirement that firms like Solyndra pay a substantial = up-front fee to cover the risk of a loan, a provision that had slowed = approvals of loan guarantees. Once that was removed, loans began to flow = and Solyndra was the first to benefit.

In January 2010, four = months after the loan was finalized, Solyndra executives and lobbyists = pressed Gregory S. Nelson, an aide to Ms. Jarrett, a senior adviser to = Mr. Obama, for a meeting to boast about progress at the plant financed = with federal money and to discuss a possible second loan, according to = White House e-mails.

Positive = Assurances

Signs were increasing in 2010 that the = company=92s business plan was imploding. The dive in silicon prices, = which had started in late 2008, accelerated by the end of 2010. Solyndra = sales were growing, but so were its losses. It was forced to slash = prices much lower than its costs in order to compete with conventional = silicon panel producers. Trade publications began to question whether = Solyndra would survive =97 even its own accountant in March 2010 said it = had =93substantial doubt about its ability to continue as a going = concern.=94

But Solyndra and its lobbyists continued to = provide assurances to the White House and the Energy Department, which = still could have stopped the flow of federal money that was being given = out for construction of a new factory.

Similar positive = predictions were shared with members of Congress in 2011, after the = company sought and received permission from the Obama administration to = restructure its $535 million loan, which put private investors ahead of = the government for some of the debt if the company was = liquidated.

That disconnect has led some members of Congress = to question if Solyndra was intentionally misleading officials in = Washington.

Hide

Tuesday, December 13, 2011

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Business<= /A> >=20 Companies=20 > Solyndra

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Solyndra

Paul Sakuma/Associated Press

Updated: Nov. 17, 2011

Solyndra, a California-based solar panel manufacturer, declared = bankruptcy in=20 August 2011 after having received $528 million in federal loan = guarantees.

The loan guarantees, part of the 2009 stimulus package, were the = first to be=20 allocated out of the $18 billion Congress has committed to dole out. But = the=20 failure of Solyndra =97 which could cost taxpayers more than a = half-billion=20 dollars =97 has renewed the highly partisan debate in Washington over = the benefits=20 or failings of Mr. Obama=92s stimulus program and the wisdom of clean = energy=20 subsidies in general.

Solyndra=92s problem, according to outsiders, was that the product = looked=20 better when it was conceived than when it hit the market. Solyndra=92s = design=20 avoided the use of silicon, a commodity that was selling at very high = prices in=20 2009 when the loan guarantee was approved but that since crashed.

The design also sought to cut costs with an innovative cylindrical = design=20 that reduced the labor required for installation. But the capital costs = for=20 manufacturing were high. At the same time, Chinese companies had ramped = up their=20 output, flooding the market and pushing down the price of solar = equipment at a=20 time when slack demand in Europe contributed to a surplus.

Solyndra became one of the administration=92s most costly fumbles = after the=20 company declared bankruptcy, laid off 1,100 workers and was raided by = F.B.I.=20 agents seeking evidence of possible fraud.

Although the government in such programs typically guarantees loans = made to a=20 company by a commercial bank, this was not the case for Solyndra. It = borrowed=20 the money from the Federal Financing Bank, part of the Treasury = Department, so=20 in effect, the government was lending the money to the company directly. = The=20 Energy Department gave Solyndra a conditional guarantee for $535 = million, in=20 multiple stages, contingent on reaching a variety of milestones, and it = had=20 received $528 million before going under.

The Solyndra loan guarantee was the Obama administration=92s first. = The=20 administration, seeking to forge a =93clean energy=94 economy and = provide jobs in=20 the face of a growing recession, picked the project partly because it = was what=20 government officials were then fond of calling =93shovel ready.=94

The government=92s backing of Solyndra came as the politically = well-connected=20 business began an extensive lobbying campaign that appears to have = blinded=20 government officials to the company=92s financial condition and the = risks of the=20 investment, according to a review of government documents and interviews = with=20 administration officials and industry analysts.

Investigating What Went Wrong

Two Congressional subcommittees, the Department of Energy=92s = inspector general=20 and the Department of Justice, are investigating the Solyndra case.

On Sept. 23, the chief executive and chief = financial=20 officer of the company took the Fifth Amendment before a House = subcommittee as=20 they were verbally pummeled by committee members until Democrats = complained that=20 the badgering was becoming unseemly.

Read=20 More...

On Oct. 7, according to e-mails provided to Congressional = investigators, a=20 senior Energy Department official had=20 pushed hard for the government=92s loan, even after he had disclosed = that his=20 wife=92s law firm represented the company and he had promised to recuse = himself=20 from matters related to the loan application. The official, Steven J. = Spinner,=20 then a senior member of the Energy Department=92s loan guarantee = oversight office=20 and a 2008 Obama fund-raiser, inquired frequently about the progress of=20 the loan, urging the White House budget office to move more = quickly on=20 approving it. The e-mails provided further evidence of high-level = cheerleading=20 on behalf of Solyndra.

On Nov. 17, testifying before a subcommittee of the House Energy and = Commerce=20 Committee, Secretary of Energy Steven=20 Chu defended the loan, telling=20 lawmakers that the bankruptcy of Solyndra was =93extremely = unfortunate.=94 He=20 also rejected a suggestion put forward by a Republican that he or his = department=20 should apologize.

Companies fail when =93the bottom of the market falls out,=94 Mr. Chu = testified.=20 That, he said, is what happened to the solar panel business, for two = reasons=20 that he maintained could not be foreseen. =93This company and several = others got=20 caught in a very, very bad tsunami,=94 he said. New plants to = manufacture solar=20 panels started up in China and elsewhere, while the market for the = panels was=20 softening because of economic troubles in Europe. Prices dropped 70 = percent in=20 two and a half years, he said.

But Republicans pursued the theme that the problem was incompetence = and=20 political influence. Representative Clifford Stearns, Republican of = Florida,=20 said that the policy was simply an effort to keep President Obama on a = =93green=20 jobs pedestal.=94

A Case of Political Favoritism?

After the = bankruptcy,=20 Republicans on a House subcommittee charged that a final review of loan=20 guarantees for Solyndra may have been rushed so that Vice President = Joseph R.=20 Biden Jr. could announce its approval at a groundbreaking in 2009.=20

They released a string of e-mails that had been sent among White = House staff=20 that they said raised questions as to whether the Solyndra loan = guarantee was=20 pushed to approval before it was ready. But at a hearing, officials of = the=20 Energy Department=92s loan office and the White House budget office = defended their=20 decisions, which they said were carefully reviewed and not politically=20 inspired.

Democrats on the panel did not come to Solyndra=92s defense, but they = did=20 defend the idea of government help for the solar industry, arguing that = China is=20 doing so on a large scale and that the United States must compete. = Officials=20 from the Department of Energy backed this notion, explaining that = government=20 subsidies are essential to keep the United States competitive in = renewable=20 energy, and that naturally not all companies will succeed.

Solyndra did draw plenty of high-level attention. Its lobbyists = corresponded=20 frequently and met at least three times with an aide to a top White = House=20 official, Valerie B. Jarrett, to push for loans, tax breaks and other = government=20 assistance.

During the period when Solyndra=92s loan guarantee was under review = and=20 management by the Energy Department, the company spent nearly $1.8 = million on=20 Washington lobbyists, employing six firms with ties to members of = Congress and=20 officials of the Obama White House. None of the other three solar panel=20 manufacturers that eventually got federal loan guarantees spent a dime = on=20 lobbyists.

A critical piece of the stimulus bill removed a requirement that = firms like=20 Solyndra pay a substantial up-front fee to cover the risk of a loan, a = provision=20 that had slowed approvals of loan guarantees. Once that was removed, = loans began=20 to flow and Solyndra was the first to benefit.

In January 2010, four months after the loan was finalized, Solyndra=20 executives and lobbyists pressed Gregory S. Nelson, an aide to Ms. = Jarrett, a=20 senior adviser to Mr. Obama, for a meeting to boast about progress at = the plant=20 financed with federal money and to discuss a possible second loan, = according to=20 White House e-mails.

Positive Assurances

Signs were increasing in 2010 that the company=92s business plan was = imploding.=20 The dive in silicon prices, which had started in late 2008, accelerated = by the=20 end of 2010. Solyndra sales were growing, but so were its losses. It was = forced=20 to slash prices much lower than its costs in order to compete with = conventional=20 silicon panel producers. Trade publications began to question whether = Solyndra=20 would survive =97 even its own accountant in March 2010 said it had = =93substantial=20 doubt about its ability to continue as a going concern.=94

But Solyndra and its lobbyists continued to provide assurances to the = White=20 House and the Energy Department, which still could have stopped the flow = of=20 federal money that was being given out for construction of a new = factory.

Similar positive predictions were shared with members of Congress in = 2011,=20 after the company sought and received permission from the Obama = administration=20 to restructure its $535 million loan, which put private investors ahead = of the=20 government for some of the debt if the company was liquidated.

That disconnect has led some members of Congress to question if = Solyndra was=20 intentionally misleading officials in Washington.

Hide

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The=20 Solyndra Loan Inquiry

The chairman of the House subcommittee investigating = the=20 Solyndra loan objects to an editorial.

December 2, = 2011=20

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Sola= rCity=20 Wins Financing for Military Housing Plan

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November 30, 2011=20

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November 25, 2011=20

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Federal=20 Subsidies for Renewable Energy

Readers respond to a recent front-page article about = government=20 support for the alternative energy industry.

November 19,=20 2011=20

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Energy=20 Secretary Chu Defends Solyndra Loan

By MATTHEW L. WALD

Steven Chu, the energy secretary, said the = company=92s later=20 bankruptcy was =93extremely unfortunate,=94 but he saw no need to=20 apologize.

November 18, 2011=20

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Energy= =20 Secretary Steven Chu to Defend Solyndra Loan to Congress

By MATTHEW L. WALD

Steven Chu, in advance testimony before a House = committee, will=20 defend the program that loaned $535 million to Solyndra, the solar-panel = maker=20 that went bankrupt.

November 17, 2011=20

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Solyndra=20 Has a Cousin in the Poorhouse

By MATTHEW L. WALD

Steven Chu, the energy secretary, compared the market = misfortunes of Beacon Power, a manufacturer of mechanical batteries, = with the=20 price decline that undid Solyndra.

November 17, = 2011=20

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Report=20 Calls for Changes in the Energy Department

By MATTHEW L. WALD

Only half of the $13 billion spent annually on 16 = federal=20 laboratories goes to actual research, a ratio that could be improved, a = new=20 report says, by combining operations.

November 16, = 2011=20

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S= olyndra=20 Was Asked to Delay Layoff News Till After Midterms, Memo Says

By MATTHEW L. WALD

Energy Secretary Steven Chu has been asked to testify = on the=20 failed solar equipment company before a House subcommittee.

November 16, 2011=20

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Solyndra=20 E-Mails Released by Lawmakers

By MATTHEW L. WALD

The e-mails were released by a Congressional = committee=20 investigating the default by the solar power company Solyndra on a $528 = million=20 government loan.

November 10, 2011=20

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U.S.=20 and China on Brink of Trade War Over Solar Power Industry

By KEITH BRADSHER

Chinese solar panel manufacturers, which had = virtually no=20 presence in the American market three years ago, now hold more than half = of=20 it.

November 10, 2011=20

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By PAUL KRUGMAN

Will our political system delay the energy = transformation now=20 within reach?

November 7, 2011=20

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House=20 Panel Votes to Subpoena Solyndra Documents

By MATTHEW L. WALD

Republicans assert that White House documents could = show that=20 it had extensive contact with a campaign donor who was also a Solyndra=20 investor.

November 03, 2011=20

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Solyndra=20 Auction Brings Out Bargain Hunters

By MICHAEL KANELLOS

Solyndra, the failed solar company that became a = political=20 flashpoint, is selling off its equipment, but how much the auction will = bring in=20 is uncertain.

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Milestones:=20 Solyndra=92s Meltdown

In August 2011, after receiving over $500 million in = federal=20 loan guarantees, Solyndra, a solar panel manufacturer, declared = bankruptcy. The=20 company=92s collapse has renewed the debate in Washington over the = stimulus=20 program and clean energy subsidies.

Interactive = Feature=20

Blinding=20 Officials to a Solar Energy Company=92s Condition

Government documents are evidence of a major lobbying = campaign=20 that appears to have blinded government officials to Solyndra=92s true = financial=20 condition.

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