ABC investigates Westly's relationship with Obama

March 30, 2011 7:46:31 PM PDT
Former state controller Steve Westly's has close connections to the president and now that relationship is being questioned in connection to hundreds of millions of dollars in government loan guarantees.

Here's a look at the investigation done by ABC's Brian Ross and the Center for Public Integrity.

In his piece, Ross links Westly's political fundraising for President Barack Obama to a half billion in government loan guarantees to businesses linked to Westly.

When the president came to San Francisco last October, he west to Westly's house for a Kamala Harris fundraiser.

"I am delighted with the extraordinary support for the president and for Kamala Harris," said Westly.

Westly has raised a half million dollars for the Obama campaign. He attended January's White House State Dinner for the president of China. In February he met the president on the peninsula for a dinner with Apple CEO Steve Jobs and Google's CEO.

As Ross noted, Westly's venture capital company boasts that it's uniquely positioned to take advantage of the Obama administrations interest in green energy.

Ross reported that four companies tied to Westly have secured over a half billion dollars in loans and grants and the White House has since had him appointed to for the secretary of energy.

The company that got the bulk of that $512 million was Tesla. Westly is an investor in Tesla Motors, but it's not his company. Westly would not talk to Ross about the story.

"I can't speak about that now. This is an off the record meeting, I'm sorry," said Westly on camera.

A spokesman sent ABC7 a statement from Westly saying: "The Department of Energy loans mentioned in the report were all awarded before I joined the Secretary of Energy's Advisory Board, and each company went through an open and competitive application process which included significant due diligence."

Also mentioned in the Ross report was the Fremont solar panel company Solydra. In 2010 the president toured the plant which received a half billion dollar government loan from the Department of Energy. But in spite of the cash, Solyndra said it was forced to close a factory and lay off workers.

ABC7 asked Wade Randlett because Solyndra had to lay people off, does that necessarily make them a bad investment that the government put money in there? He responded, "Not at all because time will tell."

Randlett runs an alternative energy company in San Francisco and is a big supporter of the president, but he says the government should base its financial assistance on standards. Any company able to meet the standards would get the help.

"And it doesn't matter whether you like wades renewable fuel or marks renewable fuel, it's either renewable or not. As soon as the government says, 'We'll we like Wade's renewable fuel company better than Mark's renewable fuel company,' then the public starts to wonder how that decision got made," said Randlett.

Last summer government auditors found the Energy Department's loan guarantee program or LGP 'has treated applicants inconsistently, favoring some and disadvantaging others."

Tesla says it went through a competitive, transparent three-year application process before receiving its loan. Solyndra told Ross the company just needs more time to turn things around.

The White House told Ross that politics has no role in who gets loan guarantees from the government; it's all about merit.

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