Tim Rogers: Obama Administration's loan to Solyndra seems like B.S.

Good morning.

“Seems B.S.”

That is what a White House official who was involved in planning President Obama’s 2010 trip to the headquarters of now failed solar energy company Solyndra wrote in an email about a story that had appeared in a trade publication just before the president’s visit that said the company was not doing well financially.

That was probably the wrong choice of words for that White House official to use.

Because right now, there are a lot of things about this Solyndra deal that “seems B.S.” to the American public, but stories warning that this company might fold aren’t one of them.

In case you haven’t heard of Solyndra, it was a Silicon Valley-based solar energy company whose main claim to fame is that somehow it hoodwinked the Obama Administration into giving it $528 million in federal loans under the stimulus bill. Now, the federal government is scrambling to see if it can recover any of that money in the wake of the company declaring bankruptcy last month and laying off 1,100 people.

I haven’t thought that Obama was doing a very good job for a long while now, but if what is being reported about the Solyndra fiasco is true, than his administration has been even more shoddy and lackadaisical with our money than most of us feared.

The most devastating of these revelations is that according to The Associated Press, the Obama administration restructured the loan in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.

According to the AP, The loan restructuring, which was done in February, assured two private investors — Argonaut Ventures I LLC and Madrone Partners LP — that they would be repaid before the U.S. government if the solar company were to be liquidated. That means they would be repayed before us, the taxpayers, and if there isn’t enough for us, then too bad.

The bigger question is if the government thought for a moment that this loan was in trouble why did they restructure it and why was all of this kept quiet?

Not surprisingly, the answer appears to be that Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. According to the AP, the foundation is headed by billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama’s 2008 campaign, federal election records show, and he has made at least 16 visits to the president’s aides since 2009, according to White House visitor logs.

Let’s see if I have this straight. Obama, who is out on the campaign trail right now arguing that everyone needs to pay their fair share, made a shady deal to place the interests of on high-powered, billionaire campaign supporter above the interests of the American people.

Mr. Kaiser should have been politely and firmly told no. Mr. Kaiser should have been told that he and every other private investor will have to wait in line behind the American people should Solyndra have to declare bankruptcy.

The other obvious question that people are asking now is why did the Obama Administration lend all this money to this company in the first place.

You would think that if the U.S. government were to hand out $528 million in loan guarantees to a company, that we would know this company inside and out.

But the truth is we didn’t. And from the moment the Obama Administration started talking about giving this loan to Solyndra, other federal officials were saying hold on a moment.

Among the problems that seem to be emerging is that the Energy Department, which runs the loan guarantee program, did not have the necessary quality control to properly manage the program.

According to the AP, In July 2010, the Government Accountability Office said the Energy Department had bypassed required steps for funding awards to five of 10 applicants that received conditional loan guarantees and congressional investigators say one of them was Solyndra, which was the first company to get such a loan.

DOE Inspector General Gregory Friedman wrote a report that said the program “could not always readily demonstrate, through systematically organized records ... how it resolved or mitigated relevant risks prior to granting loan guarantees.” And outside of government, a report last year by PricewaterhouseCoopers said Solyndra had suffered recurring losses from operations and negative cash flows, raising “substantial doubt about its ability to continue as a going concern.”

So we created an inadequate program to loan out hundreds of millions of taxpayer money to companies that we didn’t know if they were going to make it or not.

I get that sometimes life is not a 100 percent guarantee, but I would like to think that we aren’t loaning out money on what seems to be about a 1 percent chance that the government knew what it was doing.

I don’t know about you, but this Solyndra deal, and the stuff that we are now finding out about it, seems like a shovel-ready load of B.S. to me.

Tim Rogers is editor of The Daily Citizen. He can be reached at timrogers@daltoncitizen.com.

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