Emails: Energy Dept. Asked Solyndra to Postpone Layoff Notice Until After Election
California solar firm got half-billion-dollar federal loan, went bankrupt.
Nov. 15, 2011 — -- Emails released by Congressional investigators Tuesday suggest that the Obama administration asked solar firm Solyndra, the flagship of its green energy program, to postpone the announcement of job layoffs till after the 2010 midterm elections.
The House Energy and Commerce Committee's oversight subcommittee has been investigating the federal government's $535 million loan to Solyndra, which was backed by a major Obama fundraiser, to determine whether politics played any role in how the loan was awarded or restructured. The Department of Energy, which had made the California solar-panel maker its first loan guarantee recipient, has maintained that the loan was awarded and administered based on its merits.
But the Republican majority on the subcommittee has released emails from Argonaut Private Equity, the investment firm that backed Solyndra and is owned by Obama fundraiser George Kaiser, that the Republicans say shows that the Energy Department wanted to delay the announcement of Solyndra's layoff of 180 workers till the day after the Nov. 2, 2010 elections. According to the subcommittee, the layoffs were announced on Nov. 3, 2010, the day after the GOP landslide.
In early October, Solyndra was having financial problems and informed the Energy Department that it would need additional funds to keep operating. On Oct. 25, 2010, according to an email released by the subcommittee, Solyndra CEO Brian Harrison told the DEO that he had "received some press inquiries about rumors of problems," and also notified DOE that he wanted to tell employees about upcoming layoffs on Oct. 28.
READ the iWatch News story about the Argonaut emails.
According to a memo prepared by the subcommittee, Harrison's email was forwarded to Jonathan Silver, then head of the DOE Loan Programs Office, and to Energy Secretary Chu's chief of staff. Silver forwarded the email to Ron Klain, then Vice President Biden's chief of staff, as well as Carol Browner, then head of the White House climate change office, and another White House staffer.
On Oct. 30, 2010, according to the memo, "advisors for Argonaut Private Equity, Solyndra's largest investor, discussed the status of talks with DOE about the restructuring of the Solyndra [loan] guarantee." The subcommittee quotes an Argonaut email from from Steve Mitchell, Argonaut's managing director and a Solyndra board member, that says DOE "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."
The subcommittee's memo says, "Several emails produced by Argonaut to the Committee reference the fact that the layoff announcement was postponed because of the November 2 elections."
The subcommittee did not initially release any of the emails referenced in the memo. It subsequently released the Oct. 25 and Oct. 30 emails, as well as an Oct. 27 Argonaut email that says, "The DOE has requested a delay until after the election (without mentioning the election)," and an Oct. 30 email in which an unidentified Argonaut exec tells Ken Levit, director of George Kaiser's charity, "No announcement till after elections at doe request."
Last week the Republican majority on the Energy and Commerce committee took heat from minority members for releasing incomplete emails in an attempt to make the Obama administration look bad. The Democrats said a fuller view of the emails in question actually presented evidence that the administration worked to avoid political meddling in the Solyndra deal.
The Energy Department said Tuesday that the latest email disclosure does not dispel its point: That the award to Solyndra was awarded on merit, not politics.
"The Republican report cites internal email from Argonaut about the timing of a press release," spokesman Damien LaVera wrote in reply to questions from iWatch News and ABC News. "But as the 180,000 pages of documents that the Department of Energy turned over to the Committee indicate, the Department's decisions about this loan were made on the merits, based on extensive review by the experts in the loan program -- and nothing in this Republican Committee memo changes that."
The DOE's Solyndra loan guarantee was announced in March 2009, two months into the Obama presidency, and heralded as a sign that a traditionally slow-moving agency could more rapidly spur projects benefiting the environment and economy. In its quest to award and later support its first guarantee recipient, the Energy Department ignored warnings from government staffers, outside analysts and even Solyndra's own auditor that it was, at best, a risky bet.
WATCH the Original ABC News Report on Solyndra
READ the Original ABC News Report on Solyndra
Earlier this year, with Solyndra swimming in debt, the Energy Department agreed to a refinancing that pushed back the company's payoff date -- and, notably, let investors including Kaiser stand in line first for reimbursement should the company fail. Those investors infused $75 million into Solyndra as DOE refinanced the company's debt this February. Under a pact between the parties, this round of investors will collect first in bankruptcy, and the government next.
Energy Secretary Steven Chu, who signed off on that agreement, will testify before the House Energy and Commerce oversight subcommittee Thursday. Jonathan Silver, head of the Energy Department's loan program, resigned from his post after testifying before the subcommittee earlier this year.