The chief executive and chief financial officers of Solyndra, the California solar panel manufacturer that took a half-billion dollars in federal loan guarantees in 2009 and promptly went bankrupt, leaving taxpayers on the hook, were given an opportunity to explain themselves today before a congressional committee today. They took the Fifth.
It appears that this Solyndra thing has legs. The company was a centerpiece of Barack Obama's Green Jobs agenda, and he touted it as an example of how the federal government can partner with private firms to jumpstart a "brighter and more prosperous future." Hence the $535 million in loans that the federal government essentially co-signed. Unfortunately, as the New York Times reports today, Solyndra was a Potemkin company.
[B]ehind the pomp and pageantry, Solyndra was rotting inside, hemorrhaging cash so quickly that within weeks of Mr. Obama's visit, the company canceled plans to offer shares to the public. Barely a year later, Solyndra has become one of the administration's 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.
It turns out that several federal bureaucrats in the approval process for the loan guarantees had an inkling about Solyndra's true financial state and tried to block the company's application. But the White House, eager for a political prop to show policy-in-action, fast-tracked the approval and ignored warning signs.
The FBI is now investigating to see if Solyndra misled the government in its application (which could rather conveniently let the White House off the hook), and the House's energy and government reform committees are both looking into whether political palm-greasing played a role in the guarantees—according to the Times, "George B. Kaiser, a billionaire from Tulsa, Okla., was a fund-raiser for Mr. Obama's 2008 campaign and the backer of a foundation that is Solyndra's leading investor."
Solyndra was also unusual in that, unlike other solar power firms vying for guarantees under the Department of Energy program that issued them, it launched an aggressive $1.8 million lobbying campaign—which is kind of strange for a process that should ostensibly be bureaucratic and merit-based in nature.
Anyway, get ready to hear a lot about solar panels.
[Image via AP]