Skip to content Skip to footer

Emails Show Energy Dept. Sought to Hide Solyndra Layoffs Until After 2010 Elections

As solar panel startup Solyndra planned a round of layoffs last year after securing a half-billion dollar government loan, the Department of Energy dispatched an unusual request: Hold off announcing the cutbacks until after the mid-term elections. That request, detailed in a new House Energy and Commerce memo released Tuesday, suggest that political fallout factored in the Energy Department’s handling of the maiden green energy loan guarantee announced under the Obama administration. Solyndra did make the layoff announcement, the documents say, on Nov. 3 — a day after the Nov. 2 mid-terms.

As solar panel startup Solyndra planned a round of layoffs last year after securing a half-billion dollar government loan, the Department of Energy dispatched an unusual request: Hold off announcing the cutbacks until after the mid-term elections.

That request, detailed in a new House Energy and Commerce memo released Tuesday, suggest that political fallout factored in the Energy Department’s handling of the maiden green energy loan guarantee announced under the Obama administration.

Solyndra did make the layoff announcement, the documents say, on Nov. 3 — a day after the Nov. 2 mid-terms.

The company’s layoffs, of 180 full and part time workers, cast a cloud over President Obama’s initial green energy investment and escalated fears — later founded — that taxpayers could lose their investment in the upstart firm. Earlier this year, Solyndra fired 1,100 workers, filed for bankruptcy and faced a raid by federal agents – a free-fall that cast a larger cloud over the Energy Department’s multi-billion dollar loan portfolio.

The disclosure about the timing of the first layoff announcement is detailed, according to the committee memo, in an email from a private firm backing Solyndra, Argonaut Private Equity.

Truthout doesn’t take corporate funding – this lets us do the brave reporting and analysis that makes us unique. Please support this work by making a tax-deductible donation today – click here to donate.

In late October 2010, as Solyndra’s finances withered, executives with Argonaut – founded by billionaire Obama bundler George Kaiser — were in contact with Energy Department officials about a pending restructuring of the company’s government loan.

Argonaut “noted that ? DOE continues to be cooperative and have indicated that they will fund the November draw on our loan … 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 give a reason for that date,” said the committee report.

The 2010 mid-term elections were held Nov. 2. Solyndra’s announcement that it was shuttering a plant and laying off workers came a day later.

“Several emails produced by Argonaut to the Committee reference the fact that the layoff announcement was postponed because of the November 2 elections,” said the 14-page memo written by staff of the Subcommittee on Oversight and Investigations.

Earlier in October, Solyndra CEO Brian Harrison emailed the Energy Department to alert it that the company was fielding reporters’ calls about its finances. “Solyndra has received some press inquiries about rumors 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,” wrote Harrison. He said the announcement of layoffs was coming later that month. In the end, it came after the mid-terms.

Harrison’s email went to Jonathan Silver, then executive director of the DOE Loan Programs Office, and to Chu‘s chief of staff. Silver, the records say, forwarded the correspondence to others including former White House energy czar Carol Browner and Ron Klain, then chief of staff to Vice President Joe Biden. Silver resigned earlier this year amid questions over the Solyndra refinancing.

The Energy Department said Tuesday that the new disclosure does not dispel its point: That the award to Solyndra was made on merit, not politics.

“The Republican report cites internal email from Argonaut about the timing of a press release,” spokesman Damien LaVera wrote in reply to questions from iWatch News and ABC News. “But as the 180,000 pages of documents that the Department of Energy turned over to the Committee indicate, the Department’s decisions about this loan were made on the merits, based on extensive review by the experts in the loan program — and nothing in this Republican Committee memo changes that.”

Yet the newly released records are sure to escalate questions hovering over not only the failed loan, but Chu’s involvement in a deal that the department pushed quickly ahead in the face of abundant red flags.

The loan guarantee was announced in March 2009, just two months into the Obama presidency, and heralded as a sign that a traditionally slow-moving agency could rapidly spur projects benefiting the environment and economy. In its quest to award and later support its first guarantee recipient, the Energy Department ignored warnings from government staffers, outside analysts and even Solyndra’s own auditor that it was, at best, a risky bet.

Earlier this year, with Solyndra swimming in debt, the Energy Department agreed to a refinancing that pushed back the company’s payoff date – and, notably, let investors including Kaiser stand in line first should the company fail. Those investors infused $75 million into Solyndra as DOE refinanced the company’s debt this February. Under a pact between the parties, this round of investors will collect first in bankruptcy, and the government next.

Chu, as secretary, signed off on that agreement.

“On March 3, 2011, Secretary Chu stated in an interview that DOE was ? confident Solyndra could ? ‘repay the loan,‘ and that ? ‘sales have been going up‘ in recent months,’ ” said the committee memo.

In truth, Solyndra had been fighting for survival for months.

In late August, the company shut the doors at its Fremont, California plant, fired workers and, shortly after, filed for bankruptcy. The federal raid soon followed. CEO Harrison recently resigned. Solyndra has said it committed no crimes.

Energy officials say they back potentially game changing technologies and that each investment carries a level of risk. Some, like Solyndra, fail.

Thursday, Chu will appear before the Republican-led committee that said it is exploring three key questions:

  • How did the stimulus program and Chu‘s directive to move quickly in awarding loan guarantees impact the review of Solyndra’s application?
  • Should DOE have foreseen the coming financial collapse in this case?
  • Did DOE protect taxpayers in negotiating Solyndra’s loan — and subsequent restructuring?

His testimony comes amid a new inspector general report, issued Tuesday, that calls for a restructuring of key components in the Energy Department. Notably, the report suggests a new item be added to a “Watch List” of significant issues meriting attention. That item: The DOE’s Loan Guarantee Program.

“Given the significance of the funds involved and the Government's exposure to risk, we believe that heightened and continued focus on this program is necessary,” the IG concluded.

We’re not going to stand for it. Are you?

You don’t bury your head in the sand. You know as well as we do what we’re facing as a country, as a people, and as a global community. Here at Truthout, we’re gearing up to meet these threats head on, but we need your support to do it: We must raise $16,000 before midnight to ensure we can keep publishing independent journalism that doesn’t shy away from difficult — and often dangerous — topics.

We can do this vital work because unlike most media, our journalism is free from government or corporate influence and censorship. But this is only sustainable if we have your support. If you like what you’re reading or just value what we do, will you take a few seconds to contribute to our work?