Feds Visit Homes of Solyndra CEO, Execs
Solyndra CEO painted rosy picture in weeks before collapse.
Sept. 9, 2011 — -- This story has been updated.
Federal agents have expanded their examination of the now-bankrupt California solar power company Solyndra, visiting the homes of the company's CEO and two of its executives, examining computer files and documents, iWatch News and ABC News have learned.
Agents visited the homes of CEO Brian Harrison and company founder Chris Gronet and a former executive, according to a source who agreed to speak only on the condition of anonymity because of the legal sensitivity of the situation.
Gronet, reached at his home Friday morning, did not dispute that his home was visited by federal agents a day earlier.
"I'm sorry," Gronet said, "you probably understand full well that I cannot comment." The third executive could not be immediately reached.
Solyndra spokesman David Miller confirmed agents visited Harrison's home on the same day the FBI and Energy Department Inspector General seized boxes of records from the company's headquarters.
"Yeah, they did go to his house and speak to him briefly," Miller said. "I don't know what they may have taken. I believe they took a look at his computer."
Julie Sohn, a spokeswoman with the FBI in San Francisco, declined to discuss details of the government's investigation. "Unfortunately, our affidavits are still sealed so we can't go into any details," Sohn said.
The raid and visits come amid increasing evidence the Justice Department and Inspector General are exploring whether Solyndra mislead the government in securing its $535 million loan in 2009 -- and landing a vital refinancing of that loan earlier this year. Beginning in March, ABC News, in partnership with iWatch News/the Center for Public Integrity, was first to report on simmering questions about the role political influence may have played Solyndra's selection as the Obama administration's first loan guarantee recipient. One of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama "bundler," raising money during the 2008 presidential campaign.
Members of Congress leading a House investigation of the DOE loan have focused specifically on visits Solyndra CEO Harrison made to Washington in July, when he said the company was on sound footing and expanding.
Less than two months after that visit, Solyndra fired 1,100 workers and filed for bankruptcy – a stinging collapse for the Obama administration, which made the Solyndra loan a showpiece as its first investment in green energy technology.
Democrats Now Questioning Solyndra Deal
Republican members of the House have said that bankruptcy indicates the deal was doomed from the start. Now, even Democratic leaders are questioning whether Solyndra misled the government.
"Less than two months ago, Mr. Harrison met with us and other Committee members to assure us that Solyndra was in a strong financial position and in no danger of failing," Reps. Diana DeGette, D-Colorado, and Henry Waxman, D-California, wrote to Republicans leading the investigation. "These assurances appear to contrast starkly with his company's decision to file for bankruptcy last week."
Those questions reveal a significant turn, as DeGette and Waxman were among members to vote against subpoenaing the White House budget office for records on the loan. Now, they are among those posing questions -- as the House has called Harrison to testify next week.
Miller, the Solyndra spokesman, noted that Harrison was not with the company when it secured the loan in 2009. He was, however, the chief executive when Solyndra landed a government refinancing that extended its payment period.
When Harrison came to Washington in July, he said, the company was hoping to land more financing to stay afloat. "When we were there, the circumstances of the company, business was good, we had record shipments. We had momentum in the marketplace," Miller said.
The Energy Department was keeping a close eye on Solyndra during those crucial months – sitting in on board meetings as an observer as part of the loan restructuring, iWatch News and ABC reported Thursday. That raises key questions: Did DOE miss obvious warning signs of the company's troubles in the final months before its collapse?
Obama Bundler Backed Solyndra
In 2009, the Energy Department put Solyndra's application on a fast-track for approval, and announced the award with great fanfare. The generous terms of the government loan included the lowest interest of all the green projects benefitting from Energy Department help, iWatch News and ABC News found.
And as part of the deal, the Energy Department agreed that if the company went bust, private investors could recoup their losses before the government. Republicans in Congress called the investment "a bad bet" and said it "put taxpayers at unnecessary risk."
One of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama "bundler," raising money during the 2008 presidential campaign.
The bundler, George Kaiser, has declined to comment. His firm, Argonaut Ventures and its affiliates have been the single largest shareholder of Solyndra, according to SEC filings and other records. The company holds 39 percent of Solyndra's parent company, bankruptcy records filed Tuesday show.
Energy officials have repeatedly denied allegations that Solyndra received special treatment, saying the selection process was even handed. Until two weeks ago, the Obama administration held out Solyndra as a model for its green energy program, which was devised to create jobs and spur investment in cleaner sources of energy. President Obama personally visited the Solyndra plant last year, and his Energy Department made it the first to win approval of a federal loan guarantee. The $535 million federal investment enabled the company to build a sprawling manufacturing facility.
Under terms of the bankruptcy filing, investors including Argonaut -- which led a $75 million round of financing for Solyndra earlier this year -- will stand in line before the federal government and other creditors to recoup losses. Energy officials confirmed this arrangement, saying that after private investors including Kaiser recover $75 million, the U.S. government would have a chance to seek $150 million of its investment. Private investors will not be made whole, however, and stand to lose almost a billion dollars.
Kaiser has declined interview requests for months from iWatch News and ABC News. Calls went unreturned again on Thursday. HisTulsa-based George Kaiser Family Foundation, which in 2009 cited a $342 million investment value in Solyndra, issued a statement after Solyndra's collapse, citing "serious challenges in the marketplace, especially the drastic decline in solar panel prices during the past two years caused in part by subsidies provided by the government of China to Chinese solar panel manufacturers."
Energy officials have said they viewed the Solyndra venture as a possible "game changer" in the green energy movement.
"Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment," a spokesman said this week.
Editor's Note: An earlier version of this story stated that the homes of Solyndra executives had been searched. Solyndra officials say that while agents visited homes of key executives, they did not search them.