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White House sends Solyndra emails to Congress

From Dan Lothian and Lesa Jansen, CNN
updated 2:13 AM EDT, Sat October 8, 2011
 Solyndra, a solar energy company, filed for bankruptcy in August 2011 after it received $535 million in federal loan guarantees.
Solyndra, a solar energy company, filed for bankruptcy in August 2011 after it received $535 million in federal loan guarantees.
STORY HIGHLIGHTS
  • Solyndra Inc. filed for bankruptcy in late August
  • The company received $535 million in federal loan guarantees
  • A House committee is looking into whether warning signs were ignored

WASHINGTON (CNN) -- The White House, under fire over loan guarantees to a solar energy company that filed for bankruptcy, sent 2,000 pages of email communication to Capitol Hill late Friday afternoon, a source familiar with the congressional investigation looking into the matter told CNN.

There appears to be no smoking gun but the email traffic provides more details about who at the White House was looped in on the deal while red flags were being raised about the financial soundness of "green" company Solyndra Inc.

Approved in May 2010, the loan allowed Solyndra to build a factory in Fremont, California, to produce state-of-the-art solar panels.

Solyndra filed for bankruptcy in late August and closed its doors, putting more than 1,000 people out of work after it received $535 million in federal loan guarantees. The bankruptcy leaves the government unlikely to get back the money it loaned. President Barack Obama touted the company in a visit last year.

The source confirmed to CNN an email from a senior adviser to former White House Chief of Staff Rahm Emanuel about the loan guarantees.

Solyndra casts shadow over solar game
A closer look at the Solyndra loan
Obama explains Solyndra decision

"Ron said this morning that the POTUS definitely wants to do this (or Rahm definitely wants the POTUS to do this?)," one White House staffer told an Obama scheduler on Aug. 17, 2009, referring to Ron Klain, former chief of staff for Vice President Joe Biden.

Also emails from Energy Department adviser Steve Spinnner shed some light on the White House's involvement in the deal.

Spinnner wrote in an Aug. 28, 2009 email that the White House and vice president's office are "breathing down my neck on this ... just want to make sure we get their questions."

Spinner wrote emails about this to another Energy Department official and also wrote directly to Solyndra. In one email he inquired about the Office of Management and Budget.

"Any word on O.M.B.?" he asked another Energy Department loan officer. "I have the O.V.P. and W.H. breathing down my neck on this."

Two Republican congressmen who head panels looking into the loan late Friday welcomed the release of the documents by the White House.

"After eight months of stonewalling by this administration, today we finally learn one of the reasons why they fought our investigation every step of the way," according to the statement from House Energy and Commerce Committee Chairman Fred Upton (R-Michigan) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Florida). "The paper trail released by the White House portrays a disturbingly close relationship between President Obama's West Wing inner circle, campaign donors, and wealthy investors that spawned the Solyndra mess."

Thursday, Obama defended his administration's handling of the Solyndra loan process.

"There were going to be some companies that did not work out; Solyndra was one of them," the president said. "But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally when you're dealing with something as complicated as this."

Upton and Stearns said "if Solyndra is evidence of Obama's regular review process, then we have significant problems and taxpayers could be on the hook for billions."

Federal analysts looking at the proposed loan in 2009 warned then of possible problems, as well as pressure from the White House to speed up a decision, according to a memorandum released last month by a House committee.

In September, agents from the Department of Energy and the FBI raided Solyndra's headquarters. Neither agency would comment on the nature of the raid, but the DOE inspector general typically investigates allegations of fraud or wrongdoing at the agency and businesses with which it does business.

In its memorandum, the House Energy and Commerce Committee headed by Upton asked how the Department of Energy and Office of Management and Budget "ignored red flags in their rush to spend stimulus dollars" by backing the loan guarantees for Solyndra.

"The political pressure to approve the Solyndra deal appears to have caused DOE and OMB to miss or disregard numerous shortcomings regarding Solyndra's financial viability," the report said.

Energy Department officials defend the decision to back Solyndra, noting that the company's loan application was nearly complete before Obama took office, and that the private sector gave the company billions in additional funding.

Upton and Stearns also claimed the Treasury Department was concerned that the Department of Energy's restructuring of the Solyndra loan in early 2011 was a violation of the law.

"Despite the plain letter of the law, DOE allowed Solyndra's investors to be moved to the front of the line for the first $75 million in the event of Solyndra's bankruptcy," the pair said in a statement Friday.

Upton and Stearns said they sent a letter to the Treasury Department seeking information about the agency's involvement with the loan and its concerns."

The head of the U.S. Department of Energy's Loan Program Office resigned amid the fiscal firestorm, DOE Secretary Steven Chu said Thursday.

The loan program's executive director, Jonathan Silver, was planning to leave his post and return to the private sector this fall, Chu said in a written statement.

However, Upton and Stearns linked the resignation to the loan

CNNMoney's Steve Hargreaves, Deirdre Walsh and CNN's Tom Cohen contributed to this report.

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