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Obama Aides Discussed Solyndra Layoffs Before 2010 U.S. Election

January 18, 2012

Jan. 14 (Bloomberg) -- White House officials knew before the 2010 midterm elections that Solyndra LLC planned to fire workers after winning a $535 million U.S. loan guarantee, according to e-mails released yesterday, a disclosure that might have embarrassed the administration.

The messages don’t show that anyone from President Barack Obama’s administration directed Solyndra to delay announcing the layoffs until after the balloting. Previously released e-mails, indicating the Energy Department urged Solyndra to postpone the cuts, have been cited by House Republicans who say politics influenced Solyndra’s award and last-ditch rescue bid that put taxpayers behind $75 million in private investment.

The solar-panel maker based in Fremont, California, filed for bankruptcy protection on Sept. 6, about two years after receiving the loan guarantee.

“Here’s the deal -- Solyndra is going to announce they are laying off 200 of their 1200 workers,” Heather Zichal, a White House adviser, wrote to Carol Browner, then director of the office of Energy and Climate Change Policy, and other officials on Oct. 27, 2010. “No es bueno,” or Spanish for “it’s not good.”

Zichal later wrote White House press aides to alert them of the upcoming announcement because the administration “has made this such a high-profile investment” from the 2009 economic stimulus. Obama visited the Solyndra plant built with U.S. backing in May 2010.

The White House released the e-mails in response to a request from Republicans on the House Energy and Commerce Committee’s investigations panel, which has examined Solyndra’s loan guarantee since February.

Further Probe Sought

Stearns said in an e-mailed statement that the White House hadn’t turned over all its documents related to the Solyndra loan. Grants given to “at risk” clean-energy companies should also be investigated, he said in the statement last night.

House Republicans sought e-mails classified in 11 categories, including any documents where White House officials discussed either a decision on whether to approve the guarantee before Sept. 4, 2009, or the restructuring of the loan agreement approved Feb. 23, 2011.

Kathryn Ruemmler, counsel for Obama, said in a letter to Representatives Fred Upton, a Michigan Republican and chairman of the energy committee, and Cliff Stearns, a Florida Republican who heads the investigations panel, that the White House “did not identify” any documents in either category. Congressional investigators have now received more than 186,000 pages of documents from the administration and 72,000 pages from Solyndra investors, the letter states.

‘On the Merits’

The documents show the decision to award the guarantee in 2009 and to restructure its terms to aid the company avoid bankruptcy were made by the Energy Department “on the merits,” Ruemmler wrote in the letter, signed with Cynthia Hogan, counsel to Vice President Joe Biden.

Republicans in a Nov. 15 memo cited e-mails from advisers to the company that indicated the Department of Energy sought to delay the announcement of the 2010 layoffs.

“They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd -- oddly they didn’t give a reason for that date,” an adviser to Argonaut Private Equity of Tulsa, Oklahoma, who wasn’t identified, wrote an associate in an e-mail. Argonaut was an investor in the company.

The Republican memo said Brian Harrison, who was Solyndra’s chief executive officer, told the department he wanted to inform employees about the jobs cuts on Oct. 28, 2010, five days before the election.

Fab 2

A day after the vote, on Nov. 3, Solyndra said it was closing a manufacturing plant built before it received the U.S. aid and was firing workers to cut costs. The company shifted operations to Fab 2, a $733 million factory built with the help of the $535 million guarantee.

Energy Secretary Steven Chu told the committee at a Nov. 17 hearing that he wasn’t aware of an effort to delay the announcement, and that it wouldn’t be a “proper way to do business.”

The loan guarantee to the company has proved to be a political embarrassment for the administration, which included the loan-guarantee program in its 2009 economic stimulus as a potential job creator.

Stearns and Upton have said White House and Energy Department officials ignored red flags warning of Solyndra’s financial woes prior to the loan.

So far, Republicans have been unable to back up assertions that the White House may have intervened as payback to George Kaiser, an Oklahoma billionaire and fundraiser for President Barack Obama, whose foundation also was a major investor in Solyndra.

Kaiser has said he never lobbied the administration on Solyndra’s behalf.

--Editors: Steve Geimann, Daniel Enoch

To contact the reporter on this story: Jim Snyder in Washington at

To contact the editor responsible for this story: Jon Morgan at

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