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WH Budget Official: Oh, We Made Far Worse Loans Than Solyndra

Happy Monday, Obama administration.  According to a new tranche of emails obtained by ABC News, the political wreckage of the Solyndra scandal could get significantly more grisly before all is said and done.  In one particularly incriminating note, a staffer at the White House's Office of Management and Budget candidly frets that "bad days" lie ahead:


Emails released earlier this month show that at least one official of the Office of Management and Budget worried that Solyndra was just the tip of the iceberg when it came to ill-conceived government loans to green energy companies.  “(W)hat’s terrifying is that after looking at some of the ones that came next, this one [Solyndra] started to look better,” the official emailed. “Bad days are coming.”  Rep. Darrell Issa, R-Calif., chair of the House Committee on Oversight and Government on October 7 wrote to Energy Secretary Dr. Steven Chu to see just what other problematic loans might exist. Specifically, Issa is seeking “additional information regarding the loans approved on the final day of the program,” ones made to First Solar Inc, SunPower Corp., and ProLogis Inc.

The questions clearly suggest the concern that the Department of Energy officials in charge of the loan program did not conduct due diligence before sending billions in loan guarantees out the door — a concern that seems to have been shared by officials of the Department of Management and Budget.

How comforting.  Remember, the ominous "terrifying" and "bad days" descriptors come not from GOP investigators, but from within Obama's own budget team.  And those words were not employed to describe the Solyndra loan, but other loans within the broader "green energy" program.  Just last week, the president asserted that even though Solyndra didn't "work out," he remains confident that the loan guarantee program is good for America's economic health:


Now, we knew from the start that the loan guarantee program was going to entail some risk, by definition. If it was a risk-free proposition, then we wouldn't have to worry about it. But the overall portfolio has been successful. It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It's helped create jobs. There were going to be some companies that did not work out; Solyndra was one of them. But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally when you're dealing with something as complicated as this. But I have confidence that the decisions were made based on what would be good for the American economy and the American people and putting people back to work.

Obama's vision helps explain why even more hefty federal loans continue to fly out the door -- despite internal and external due diligence worries -- to politically-connected "green" companies, including one with substantial ties to Nancy Pelosi's brother-in-law.  According to the Washington Post, additional emails indicate that President Obama and/or former White House Chief of Staff Rahm Emanuel were directly involved in the administration's efforts to spotlight Solyndra as a stimulus "success" story -- an impulse that eventually led to an infamous presidential visit to the failing company's headquarters in 2010.  Still more internal documents reveal that the Obama Energy Department pressed ahead with a plan to refinance Solyndra's loan (on which the company had already defaulted) even after receiving warnings that the scheme could actually violate the law:


Energy Department officials were warned that their plan to help a failing solar company by restructuring its $535 million federal loan could violate the law and should be cleared with the Justice Department, according to newly obtained e-mails from within the Obama administration.  The e-mails show that Energy Department officials moved ahead anyway with a new deal that would repay company investors before taxpayers if the company defaulted. The e-mails, which were reviewed by The Washington Post, show for the first time concerns within the administration about the legality of the Energy Department’s extraordinary efforts to help Solyndra, the California solar company that went bankrupt Aug. 31.

In addition to the stench of intentional lawlessness, the Los Angeles Times drops another damaging revelation atop this fetid heap -- an egregious case involving a clear conflict of interest at best, and rank cronyism at worst:

A top fundraiser for President Obama was far more involved in the $535-million loan guarantee to now-bankrupt solar equipment maker Solyndra than the administration had previously disclosed, according to newly released emails. Steven Spinner, a former Energy Department official, was supposed to be recused from the decision to select Solyndra to participate in the agency's $25-billion program to back loans for renewable energy projects because his wife's law firm represented the company.

A flurry of emails from early August to early September 2009 portrayed Spinner as impatient to show that the stimulus act was producing jobs, especially at so-called clean technology firms such as Solyndra.  He was deeply involved in coordinating a "big event" to announce the approval of Solyndra's loan guarantee, which he envisioned involving "golden shovels, bulldozers, hardhats, etc," according to an Aug. 20, 2009, email.  In addition, the emails showed that he was in close contact with Solyndra executives to plan the event.  In late August 2009, Rogers wrote to Spinner in another email exchange: "Thanks for driving Solyndra."  Federal records show that Allison Spinner's firm, Wilson Sonsini Goodrich & Rosati, received $2.4 million in federal funds for legal fees related to the Solyndra loan guarantee.


Spinner, incidentally, now works at the Center for American Progress, a lefty think tank.  Quite a path, isn't it?  Wealthy Silicon Valley investor to major Obama campaign bundler to DOE loan advisor to CAP.  Naturally, both Spinner and the White House insist that his involvement in the Solyndra matter wasn't the least bit improper.  Oh, of course not.  Just like fellow deep-pocketed Obama donor and Solyndra backer, George Kaiser, didn't say a peep about the proposed loan when he visited the White House at least four times directly before the company's application was approved (against the advice of Bush and Obama-era budget and energy staffers, mind you).  This whole thing stinks, and if the OMB official quoted above is correct, there's a lot more pain ahead. 

UPDATE - Read the Wall Street Journal's sharp editorial on this debacle.

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