Solyndra Solar Panel Corporation Scandal Ablaze - ThinkProgress Sets Record Straight

Wed, 2011-09-14 12:48Steve Horn
Steve Horn's picture

Solyndra Solar Panel Corporation Scandal Ablaze - ThinkProgress Sets Record Straight

The ongoing scandal continues to blaze at Solyndra. Solyndra Corporation, a San Francisco Bay area solar panel start-up company, is under fire in the immediate aftermath of its August 31 filing for Chapter 11 bankruptcy and laying off over 1,000 workers, which is roughly one-fourth of those who were employed by Solyndra at the time.

Shortly after this development, on September 8, Solyndra was raided by the Federal Bureau of Investigation.  

Critics, such as climate change denier and Republican Party Presidential candidate Michele Bachmann, are referring to the deal as “crony capitalism” gone arwy. In an interview with Fox News' Greta Van Susteren, Bachmann stated, “This is what the American people don't want. They don't want crony capitalism. It infuriates them. We saw that with President Obama, when we saw over $500 million dollars go to Solyndra, who was a political donor of President Obama.”

The $500 million Bachmann is referring to is a loan guarantee that was given to Solyndra from the Obama Department of Energy in March 2009.

Others, such as The National Journal and The New York Post have also gone into “blame Obama” attack mode, blaming him not only for giving a loan to a company that went under, but furthermore, for taking campaign money from a fundraiser set up by George Kaiser. ThinkProgress' Stephen Lacey explains who Kaiser is and why he matters:

Because one of the Solyndra investors, Argonaut Venture Capital, is funded by George Kaiser — a man who donated money to the Obama campaign — the loan guarantee has been attacked as being political in nature.

And yet, a deeper probe shows that, while an easy scapegoat, there was another key player in this game, who has gone unmentioned by the mainstream press – former President George W. Bush.

ThinkProgress Lays Out Real Timeline

In an article titled, “Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story,” Lacey revealed that although the popular narative has been to blame Obama in exclusivity, the reality is that Solyndra was, in actuality, a project spearheaded by the Bush Administration in 2007.

Lacey wrote,

To set the record straight, Climate Progress is publishing this timeline — verified by Department of Energy officials — that shows how the loan guarantee came together under both administrations. In fact, rather than rushing the loan for Solyndra through, the Obama Administration restructured the original Bush-era deal to further protect the taxpayers’ investment.

The complete, month-by-month, year-by-year timeline, provided by Lacey and ThinkProgress in the article, can be seen below:

May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics, Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.

July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.

February 2006 – October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.

December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.

Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.

October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the “company’s second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location.”

November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra’s very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.January 2009: In an effort to show it has done something to support renewable energy, the Bush Administration tries to take Solyndra before a DOE credit review committee just one day before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE because it wasn’t ready for conditional commitment.

March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE’s credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.

June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.September 2009: Solyndra raises an additional $219 million. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1703 program. From application to closing, the process took three years – not the 41 days that is sometimes reported.

January – June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra’s ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from investors.November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month — on time and on budget — employing around 3,000 construction workers during the build-out, just as the DOE projected.

February 2011: Due to a liquidity crisis, investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company – which was a going concern – for market value, which would have guaranteed significant losses.

March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.House Energy and Commerce Committee Chairman Fred Upton (R-MI): “despite the Administration’s urgency and haste to pass the bill [the American Recovery and Reinvestment Act] … billions of dollars have yet to be spent.”And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL): “The whole point of the Democrat’s stimulus bill was to spend billions of dollars … most of the money still hasn’t been spent.”

June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50%, but analysts worry how the company will compete with the dramatic changes in conventional PV.August 2011: DOE refuses to restructure the loan a second time.

September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers and files for bankruptcy. The news is touted as a failure of the Obama Administration and the loan guarantee office. However, as of September 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3% of DOE’s loan portfolio. To date, Solyndra is the only loan that’s known to be troubled.

Meanwhile, after complaining about stimulus funds moving too quickly, Congressmen Fred Upton and Cliff Stearns are now claiming that the Administration was pushing funds out the door too quickly: “In the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning.”

Reframing the Dialogue?

​Lacey's piece is now the definitive narrative of the Solyndra saga. Whether it sticks in popular discourse, though, is anyone's best guess. Kudos to him and ThinkProgress though, for putting this on the map. 

Comments

about very little.

 

More important is the wierd weather.

I don't expect that Bush wins a third term ... Or that Obama wins a second. just as well that those guys belong to the past.

Looks like it's going to be Mitt. Let's all agree not to worship him Obama style.

Where has President Obama said that he blames George Bush?

Um, only like pretty much half the time he opens up his mouth to explain away his latest catastrophic incompetence.  The other half is Ogabe congratulating himself for something or other.

How about he's blaming Bush on this very issue!  Or are you not paying attention?

I meant specifically the Solyndra issue.

From what I can tell, the Obama administration has simply stated the obvious, that the loan was initiated and approved during the Bush administration.  I haven't seen any indication that Obama has absolved himself from all blame, since the company did go under during his administration.

Anyway, I'll have to check out various resources to get the jist of this.

Is anybody else surprised that the government didn't throw even more money at this company?

I mean it's an solar panel company in the age of government bailouts and stimulus jobs under the presidency of a man who promises lower sea levels.

How did this company not get bailed out?

Does not compute.

President Obama is promising lower sea levels?  When has he said that?

 

Inauguration speech I believe - I'll see if I ca find it

"The journey will be difficult. The road will be long. I face this challenge with profound humility, and knowledge of my own limitations. But I also face it with limitless faith in the capacity of the American people. Because if we are willing to work for it, and fight for it, and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth. This was the moment - this was the time - when we came together to remake this great nation so that it may always reflect our very best selves, and our highest ideals. Thank you, God Bless you, and may God Bless the United States of America."

- Obama June 3, 2008. in St Paul

This is pretty good messiah talk, but my favorite phrase he came up with was "we are the ones we've been waiting for"
- totally loaded with savior tones - it's what he used to do best - very entertaining

Oh, of course it is reasonable to promise to slow the rise of the oceans.  If he is capable of encouraging some means for beginning to reduce CO2 emissions, the sea level rise rate would eventually slow down since the ocean warming expansion and glacial melt would slow.

 

Rick:

Would a transparent carbon tax be a reasonable way to help reduce CO2, or would that be too likely to be used as a power grab?  How would you reduce CO2 emissions without allowing those in power to grab more power?

A carbon tax might be a reasonable way to create revenue. But yes the revenue will afford opportunities for power and abuse of power. It's a difficult problem.

As far as reducing CO2 goes, I think that's just a function of the economy- poor people burn less stuff.

I'm more of a critic than a problem solver here because a lack of critical input allows for unchecked and unrealistic half baked ideas about how to fix the world. Well that's my justification of the moment anyway.

That's why the carbon tax would be transparent.  Either an unbiased third party group arbitrates the distribution to the proven best technologies or the revenues are distributed evenly to the people and let market forces decide how to spend the revenue on the relatively cheaper carbon-less technologies.  The tax could start small, and the gov't could be kept out of the money decision making.  It sounds like a solution with manageable risk that can address a problem with high future risk, a win-win.

Anyway, I won't bother you much more with trying to contribute, and let you get back to criticizing.

Reducing CO2 emissions does not have to equate to poverty.  There are technologies that exist today that can provide energy without emissions.  The carbon tax would encourage the replacement of CO2 emitting activities with other means of providing energy and quality of life services.

Well that is the idea, but in the real world wealth produces CO2. (see Al Gore) The only real demonstrated way to reduce CO2 is to reduce wealth. Take money away from people and they burn less fossil fuel.

If you want a drastic reduction in CO2, induce mass poverty (see North Korea)

The idea that we can manipulate the system to maintain wealth and yet reduce CO2 has not been demonstrated.

(there was a story a few months ago that the first lady went in a different plane than the President to the same event because of a 4 hour scheduling conflict - a married couple arranging two large aircrafts to go to the same event for convenience - wealth produces CO2)

One could more accurately say that wealth as we have defined it today is energy intensive. If the airplanes that the Obamas used were run off a sustainable biofuel blend, then their wealth would not produce net CO2.

In any case, there seems to be an example of cognitive dissonance here.  On one hand you hold a view as fact that reducing CO2 will require mass poverty.  On the other hand you have scientists present you with a problem such as global warming that requires reductions in CO2, lest climate changes too far causing disruptions and poverty.

So, when confronted with these two ideas, something has to give.  Also, it seems you have some bias against Al Gore, which can also lead one to distance oneself from causes he is associated with.

It's pretty easy to have a bias against Al Gore. Ask his wife.

Anyway I think we can agree that the world is in a mess. I say you can't fix it. Prove me wrong.

Ok, we're on it.  If you like, you can offer support and/or encouragement at any time.  :P

"I say you can't fix it. Prove me wrong."

What would qualify as being "fixed" Rick?

 

 

The world has so many horrific problems - but this blog is climate oriented so let's just stay with that. "fixing" the climate would mean that human beings demonstrate that they can collectively (love that word) control CO2 levels and set them at 350. And they can do that while trasitioning off fossil fuels and keeping human poverty to something comparable to current levels.

Do that or even take a strong step in that direction in my lifetime and I will be shocked and will probably die of heart failure on the spot.

Most governments including ours here in Australia are starting with a Carbon Tax as like a pre-amble into an ETS, which will be entirely a free market system where the government wont be involved at all.

 

 

> under the presidency of a man who promises lower sea levels.

Nah, he didn't promise it, but seems to be getting it anyway, for now :-)

http://www.jpl.nasa.gov/news/news.cfm?release=2011-262

 

 

 

[x]
No dumping
The former owner of a Youngstown, Ohio, excavating company pled guilty to illegally dumping thousands of gallons of contaminated fracking wastewater into a storm drain that led to the Mahoning River. 
 
Benedict Lupo, 63, will be sentenced on June 16 for violating the Clean Water Act. His sentence could range from probation to up to three years in federal prison. The federal prosecutor in the case intends to seek the maximum sentence....
read more