The claim that the many beneficiaries (like Solyndra and Fisker Automotive) of President Obama’s green energy stimulus program received their millions of taxpayer dollars based on measurable metrics rather than political favoritism has always been undermined by the circumstantial evidence, but documents obtained by Complete Colorado indicate the White House applied direct pressure to its own Department of Energy to reward (another) one of its allies.
The company that reaped the benefit was Abound Solar, which filed for bankruptcy in June. In a copy of a June 2010 email, as analysts who evaluated applications were discussing doubts about the Loveland, Colo.-based solar panel manufacturer, DOE Loan Program Executive Director Jonathan Silver informed an agency credit advisor “that the WH (White House) wants to move Abound forward.” Another message from that loan program credit adviser, James McCrea, describes an atmosphere of “transaction pressure under which we are all now operating….”
The documentary evidence would seem to contradict a claim made by President Obama in a weekend interview with KUSA, Denver’s NBC affiliate, who was dismissive of what he considered to be only a few failures in DOE’s stimulus grant and loan decisions.
“These are decisions, by the way, that are made by the Department of Energy,” the president said. “They have nothing to do with politics.”
At least one reason the Obama administration would have an intense interest in seeing Abound receive a loan guarantee is because one of the top investors in the company is Pat Stryker, a bundler for the president’s campaign and top donor to Democrats. Reports about White House logs show the billionairess may have visited up to three times contemporaneous to the progress of Abound’s loan application at DOE. Stryker has donated $475,599 to federal Democrat candidates and causes over the 2008 to 2012 election cycles, according to the Center for Responsive Politics. Included in that amount is $11,900 in maximum contributions to President Obama’s two campaigns for the White House. Stryker also was an $87,500 bundler for the president’s Inaugural Committee, and donated $50,000 herself. The Sunlight Foundation reported that she gave $35,800 to the 2012 Obama Victory Fund, and she’s also given roughly $50,000 this cycle to Democratic campaign committees.
Over a year ago the Washington Post – citing familiar-sounding emails – reported similar circumstances in which the White House urged a decision to be made on a loan to Solyndra so that Vice President Joe Biden could announce it at the groundbreaking ceremony of the company’s new plant in September 2009. The Energy Department had provided initial approval, but the Post reported that administration officials subjected the Office of Management and Budget to repeated inquiries about final approval. Another Obama bundler, George Kaiser, stood to benefit from government support for his investment (owned by funds for his family foundation) in Solyndra.
“We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week),” one OMB official wrote in August 2009. Another mentioned “the time pressure we are under to sign-off on Solyndra.”
As for Abound Solar, The Daily Caller reported earlier this month that the company sold defective or underperforming products, and cited inside sources at the company who claimed officials knew their panels were faulty before they received taxpayer dollars. Abound received a reported $70 million out of a total $400 million stimulus loan guarantee – financing that was closed on in December 2010, two months after Abound knew its panels were catching fire – before DOE cut it off. The news site reported that the company’s lead quality engineer “blew the whistle” in an October 2010 manager’s meeting but was “basically told to shut up and sit down.”
“Our solar modules worked as long as you didn’t put them in the sun,” an internal source told The Daily Caller News Foundation.
And if Stryker herself didn’t know all along there were technical problems with Abound’s products, she at least should have known fairly early, since her own Bohemian Foundation headquarters was victimized by some broken panels. A November 2010 email revealed that an Abound salesperson asked a company engineer to go to Stryker’s Bohemian headquarters to “take down the broken modules (I think 14 total) as well as 4 that we shipped them originally….” The email indicated that the four panels would undergo “failure analysis.”
But I doubt she ran to the White House or DOE saying “There’s been a terrible mistake….”
But if Stryker didn’t know, then DOE’s analysts on the Abound loan application certainly did. Another email obtained by CompleteColorado.com showed that McCrea, the credit adviser, showed that some fellow bureaucrats had deep reservations about awarding Abound the money. McCrea raised questions about the limited supply and expected price trajectory of cadmium telluride for Abound’s panels, and also its limited human resources to manage the sizable project they proposed.
“I was talking with Technical today,” McCrea informed two colleagues, apparently about other evaluators of Abound’s application, “and they still have major (underlining McCrea’s) issues with the transaction.”
“One issue is the two plant issue I raised in my initial review,” McCrea continued. “The second plant in Indiana would potentially stretch management’s ability to deal with it in addition to the Colorado location simply since they will need to heavily support two complex start ups in very different locations.”
Abound had planned to refurbish a former transmission plant in Tipton, Ind. for the production of its panels. Hoosier State officials in Gov. Mitch Daniels’s administration had even crowed about the hundreds of jobs Abound would create. Somehow the severe doubts expressed by those within DOE never reached Indiana. Nevertheless, only a few days after the disconcerting DOE email exchanges, President Obama announced Abound’s loan guarantee and boasted the two plants would create 1,500 permanent jobs and produce “millions of state-of-the-art solar panels each year.”
Beyond government, independent financial assessors recognized the risks Abound presented. Colorado Watchdog noted a March House Congressional Oversight Committee report – titled “The Department of Energy’s Disastrous Management of Loan Guarantee Programs” – which explained how credit evaluator Fitch Ratings “described Abound as lagging in technology relative to its competitors, failing to achieve stated efficiency targets, and expecting that Abound Solar will suffer from increasing commoditization and pricing pressures.” Fitch determined there was only a 45-percent likelihood that Abound would repay its loan to taxpayers.
So in other words, there were multiple flashing lights and sirens surrounding the company that should have told the White House that Abound was unworthy of taxpayer support.
But those warning lights were unheeded, apparently because they needed to get Pat Stryker’s baby to the hospital.
Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.