ABC News Investigations of the Year: The Solyndra Scandal

Congress and a grand jury look into Obama's green energy mess.

ByABC News
December 20, 2011, 2:48 PM

Dec. 29, 2011 — -- This week, the Blotter is reprising seven different Brian Ross Unit investigations that made a difference in 2011. Today: Solyndra and the Obama administration's green energy program.

Shortly after President Obama took office in January 2009, he announced plans to loan billions of dollars to green energy companies as a way to create jobs and to help the country wean itself off of fossil fuels by adopting cleaner forms of energy like wind, solar, and nuclear.

In March 2011, ABC News, in partnership with the Center for Public Integrity, began publishing a year-long series of stories that looked into how the "green energy" funds were being distributed, and "World News with Diane Sawyer" aired the first of several reports looking at the role political influence may have played when the Energy Department selected the California solar power manufacturer Solyndra to receive the Obama administration's first loan guarantee.

WATCH the Original ABC News Report on Solyndra

READ the Original ABC News Report on Solyndra

READ full coverage of the green energy program by ABC News.

Federal auditors had flagged the $535 million loan to Solyndra, saying some applicants had benefitted from special treatment. And by September, when Solyndra had shut its doors and declared bankruptcy, members of Congress wanted answers. Congress began demanding information about the loan, which had aroused suspicion because one of the lead private investors in Solyndra was an Oklahoma billionaire who also served as an Obama "bundler," raising money during the 2008 presidential campaign.

The bundler, George Kaiser, said he never tried to parlay his political ties to Obama into a loan for Solyndra, and said the topic never came up during a series of West Wing meetings he held with senior administration officials in the days before the loan was approved. White House officials have also been vocal in disputing allegations of political favoritism, releasing over 185,000 pages of internal emails to prove there is no evidence of cronyism.

The emails, released in part as a response to Congressional subpoenas, did show there had been deep misgivings inside the Obama administration about approving the loan to Solyndra -- a company struggling to make a profit on solar panel sales at a time when aggressive Chinese competitors were driving down prices. By October it was clear the government would be fortunate to recover even a small fraction of the loan money -- especially because the Energy Department made the unusual decision to let private investors recover $75 million of their investments first, before any of the federal loan was repaid.

Impact: Since the story first appeared on ABC News, the FBI has raided the Solyndra headquarters as part of a federal investigation looking at whether Solyndra executives broke any laws when the secured the $535 million taxpayer-backed loan. Top Solyndra executives invoked their Fifth Amendment rights when they were called before Congress to testify. The government official who was overseeing the Energy Department's loan program, Jonathan Silver, resigned from his post. And by year's end, a grand jury had been empanelled to help determine whether laws were broken.

Click Here for the Blotter Homepage.