White house knew of Solyndra layoff plans

An auction sign is shown at bankrupt Solyndra headquarters in Fremont, Calif., Monday, Oct. 31, 2011 before Wednesday's auction. Solyndra received a one half billion dollar loan guarantee from the government before filing for bankruptcy in Sept. 2011. (AP Photo/Paul Sakuma)
January 18, 2012 1:20:40 PM PST
Senior White House officials knew in late October 2010 that government-backed Solyndra was planning to lay off nearly 20 percent of its workforce just prior to the congressional elections the next month, recently released e-mails show.

E-mails released by the White House last week showed that Heather Zichal, an energy aide to President Barack Obama, relayed the news about the Fremont-based solar firm's planned layoffs to top White House officials, including Communications Director Dan Pfeiffer and senior adviser Valerie Jarrett and Vice Presidential Chief of Staff Ron Klain.

"Here's the deal ? Solyndra is going to announce they are laying off 200 of their 1,200 workers," Zichal wrote on Oct. 27, 2010. "No es bueno."

The e-mails don't show that anyone at the White House urged Solyndra to delay layoffs. The Department of Energy, however, pressured the company to hold off until after the Nov. 2 election, according to e-mails from Solyndra's biggest investor, Argonaut Private Equity.

Solyndra later delayed its layoffs until one day after the elections.

The chain of correspondence shows that both the Energy Department and White House were aware of Solyndra's plans. In November, e-mails showed that Solyndra's then-CEO Brian Harrison himself first warned the department on Oct. 25, 2010, that he planned to lay off employees and contractors and would shut down the original Solyndra factory on Oct. 28, three days later.

Three days after the White House learned of the plans, electronic correspondence released by Republicans on the House Energy and Commerce Committee investigating the federal loan to Solyndra revealed that a business unit of Solyndra's biggest investor was aware of pressure from unnamed officials at the Energy Department not to lay off workers in October, before the 2010 congressional elections.

"They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3 ? oddly they didn't give a reason for that date," Steve Mitchell, an adviser for Argonaut Private Equity, wrote on Oct. 30, 2010.

Later Argonaut e-mails also said, "The DOE has requested a delay until after the election (without mentioning the election)."

Solyndra received $535 million in the first loan from the Energy Department's $36 billion loan guarantee program, funded through the American Recovery and Reinvestment Act. However, Solyndra struggled as market conditions swiftly changed, making its thin-film cylindrical solar panels uneconomical.

Solyndra filed for bankruptcy protection in August 2011 and laid off more than 1,100 workers in September, the same month the FBI raided Solyndra's headquarters. Last month, a grand jury began probing Solyndra, which could lead to criminal indictments.

Obama visited Solyndra in May 2010, as e-mails showed his top advisers, including Jarrett and Klain, knew about Solyndra's precarious financial condition. During his visit, Obama hailed Solyndra, telling factory workers, "The true engine of economic growth will always be companies like Solyndra."

Republicans have accused the White House of backing Solyndra for political reasons. Solyndra's biggest investor, George Kaiser Family Foundation head George Kaiser, bundled $50,000 for the Obama presidential campaign in 2008. Argonaut Ventures is a unit of the Kaiser Family Foundation.

"The sad truth is the Solyndra loan was tainted by stimulus politics from the outset, being rushed out the door over the protests of the administration's top experts, layoffs delayed until after the 2010 elections and an indefensible loan restructuring, all of which has left taxpayers on the hook for half a billion dollars," said House Energy and Commerce Committee Chairman Fred Upton, R-Mich., and U.S. Rep. Cliff Stearns, R-Fla., chairman of the investigations subcommittee.

The White House, Energy Secretary Steven Chu and the Kaiser Family Foundation have denied that politics factored into Solyndra's loan. Chu said in November that he did not ask Solyndra to delay the layoffs but that his general counsel's office is investigating who at his department did.

Story courtesy of our media partners at California Watch (A Project of the Center for Investigative Reporting)


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