Newly released emails from Solyndra executives show that the Department of Energy pressured the failed solar energy company to postpone announcing layoffs until after the 2010 midterm elections.First reported by The Washington Post, the emails show a Solyndra investor warning the company against announcing layoffs before the Nov. 2 elections, because the company’s loan draw for December had yet to be approved by the Department of Energy.
Democrats suffered a “shellacking,” in that race — and an announcement that a program funded by the controversial stimulus program was in trouble, likely would have hurt Democrats further.
Energy Secretary Steven Chu will testify before the committee on allegations that his department mismanaged the loans for political reasons.
Read the email chain, from the House Energy and Commerce committee, below:
On October 8, 2010, Solyndra executives informed DOE that the company’s “situation has changed quite dramatically.” Mr. Bill Stover, Solyndra’s CFO, informed DOE that it would not be able to raise capital by the end of the year, as it originally had planned to do, and “without access to FFB loan funds in October, November, and December for work that has been completed, Solyndra would run out of cash in November”38
During October, documents produced to the Committee show that the company was working with its investors and bankers to identify a structure for a deal and potential new capital to bring into the company while DOE analysed potential financial models for the deal. On October 25, 2010, Solyndra Chief Executive Officer (CEO) Brian Harrison emailed DOE and stated that “Solyndra has received some press inquiries about rumours of problems (one of them with quite accurate information) and we have received inbound calls from potential investors. Both of these data points indicate the story is starting to leak outside Solyndra.”39
Harrison went on to state that he would “like to go forward with the internal communication [to employees regarding layoffs] on Thursday, October 28.”40
Harrison’s email was forwarded to Jonathan Silver, the Executive Director of the DOE Loan Programs Office, and to Secretary Chu’s Chief of Staff. Silver, in turn, forwarded the email to Carol Browner, Ron Klain, and another White House staff member in Browner’s office. Browner responded, “[w]hat’s the announcement?” to which the Secretary’s Chief of Staff responded, “Left you a VM on your cell.”41
On October 30, 2010, advisors for Argonaut Private Equity, Solyndra’s largest investor, discussed the status of talks with DOE about the restructuring of the Solyndra guarantee, and noted that “DOE continues to be cooperative and have indicated that they will fund the November draw on our loan (app. $40 million) but have not committed to December yet. They did push very hard for us to hold our announcement of
the consolidation to employees and vendors to Nov. 3rd– oddly they didn’t’t give a reason for that date.”42 The 2010 federal elections were on November 2; the following day, Solyndra announced that it was shutting down its Fab 1 facility and laying off workers. Several emails produced by Argonaut to the Committee reference the fact that the layoff announcement was postponed because of the November 2 elections.
In November, Secretary Chu, in response to questions about Solyndra, noted the importance of government support for renewable energy. The DOE also released a statement, stating that “Solyndra now plans to double rather than triple production of solar panels by 2013, and construction for the company’s new facility is ahead of schedule.”43 The Secretary did not mention the financial problems then facing the company.
38: October 11, 2010, email between Solyndra and DOE regarding ―Solyndra advance material
39: October 25, 2010, email between Solyndra and DOE regarding ―Internal announcement
41: October 26, 2010, email regarding ―Internal announcement.
42: October 30, 2010 email between Argonaut staff regarding ―One more DoD contact idea,‖ AVI-HCEC-0017729.Majority Memorandum for November 17, 2011 Oversight and Investigations Subcommittee Hearing Page 10
43: Iris Kuo, Energy Secretary Chu declares ‗Sputnik’ moment on green race against China, November 30, 2010, at http://venturebeat.com/2010/11/30/what-energy-secretary-chu-says-on-solyndra-the-decline-in-green-investing/.
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