Emails Warned Solar-Panel Company Could Go ‘Belly-Up’ by 2012 Election; Obama Says, ‘Hindsight Is Always 20-20’ (Source: AP)

Tuesday, October 4, 2011

Top White House officials dismissed concerns about solar-panel maker Solyndra LLC before President Barack Obama visited the company in May 2010, newly released emails show.

Mr. Obama defended the Solyndra investment in an ABC News interview on Monday, saying that “hindsight is always 20-20.” The president said Solyndra “went through the regular review process and people felt like this was a good bet.”

The new emails show that the debate about Mr. Obama’s visit went as high as Valerie Jarrett, a confidante of the president, and Ron Klain, then chief of staff to Vice President Joe Biden. In one email, Mr. Klain said that Solyndra and other clean-technology energy ventures could go “belly-up” by Election Day 2012, but that the visit “looks like it is OK.”

The emails were included in a memo prepared by Democratic congressional staffers and sent to Democratic members of a panel of the House Energy and Commerce Committee.

They offer the latest evidence that White House and Department of Energy officials discounted warning signs about Solyndra, which received a $535 million loan guarantee from the Energy Department in 2009 and filed for bankruptcy protection last month.

President Barack Obama toured Solyndra LLC with Executive Vice President Ben Bierman in May 2010.

Staffers at the Office of Management and Budget sounded alarm bells after Solyndra failed to go forward with a planned initial public offering and received a warning from its auditor about its ability to continue as a “going concern,” the emails show.

By late 2010, Solyndra ran into such severe cash problems that it violated terms of its loan, and the government restructured its agreement in a way that allowed private investors, who agreed to provide a $75 million loan, to be paid ahead of the U.S. if the firm was liquidated.

Just days ahead of the president’s 2010 visit, an email from one OMB staffer to another indicated growing worry about the political risks. “I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future, given 1) what we just heard today from DOE that Solyndra is delaying their IPO at least until the end of the year, and 2) what the auditors said about Solyndra making it through the year absent new financing,” the email said.

Before Solyndra, Lawmakers Said Loan Program Was Slow

Another OMB staffer wrote, “Hope doesn’t default before” Mr. Obama’s May 26 visit.

Two days before the visit, Steve Westly, a California venture capitalist who raised funds for Mr. Obama’s 2008 presidential campaign, emailed Ms. Jarrett to express concern about the visit, saying it could “haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.”

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