1. SOLYNDRA:

Emails reveal company's decline; GOP charges forward with subpoena vote

Published:

Exactly one year ago today, Solyndra's deteriorating financial situation was brought into sharp focus with the announcement that the company would shut down its original manufacturing facility and lay off dozens of employees as part of a "consolidation plan" aimed at keeping the struggling company afloat.

Thousands of pages of newly released emails by the White House and Department of Energy offer a glimpse into how that announcement was received by anxious high-level officials in the Obama administration whose confidence in Solyndra appeared to be wavering even before DOE approved a controversial restructuring of the company's $535 million loan guarantee less than four months later.

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Solyndra, a solar manufacturer that was given a $535 million loan guarantee and touted by the White House as a model for the clean energy economy, has filed for bankruptcy. E&E examines how it got there and what it means. Click here to read the report.

The White House is now under fire over Solyndra and -- despite yesterday's document dump -- will likely find itself on the receiving end of a subpoena by the House Energy and Commerce Committee, which is voting on whether to take that step at a business meeting this morning.

Late last evening, House Democrats urged Republicans to cancel the meeting in the wake of the latest document release, but panel Republicans released their own statement reiterating their intention to move ahead with the vote.

"Sadly, despite our outreach, the White House still refuses to turn over internal Solyndra-related communications," committee Chairman Fred Upton (R-Mich.) and his top investigator, Rep. Cliff Stearns (R-Fla.), said in a statement last night. "We have exercised extraordinary restraint and patience these last eight months in the face of an administration that has fought our efforts to protect taxpayers every step of the way. Our document requests have been reasonable, yet the stalling tactics from the Obama administration have been prodigious."

House Republicans believe the Solyndra debacle was caused by Obama administration officials who played politics with the DOE loan program and worried more about press events than the payoff for taxpayers. The White House contends that the program was run by career staffers who, despite the eventual bankruptcy of Solyndra, made decisions based on what they thought would be in the best interest of the government's $535 million investment.

Getting 'in front of the story'

When it comes to Solyndra's November 2010 layoffs, both sides are likely to find evidence to support their reading of the situation in the trove of emails released yesterday.

The exchange begins on Oct. 25, 2010, with an email from Solyndra CEO Brian Harrison to Frances Nwachuku, the DOE official charged with managing the agency's loan guarantee portfolio.

Harrison informed Nwachuku that the company had begun receiving press inquiries about rumors of problems at Solyndra, and he informed DOE about the communication strategy he intended to employ to manage the situation.

"The story is starting to leak outside Solyndra," Harrison wrote. "It is our view inside Solyndra that while not desirable from DOE perspective we need to internally announce to employees and with one selected press member on Thursday of this week. ... It is our belief that it is better for all parties to get in front of the story and control the messaging rather than get behind the story and on the defensive."

Harrison went on to assure Nwachuku that there would be no mention of DOE in the internal communication that went out.

The email was quickly forwarded up the ladder at DOE and then sent to Ron Klain, former chief of staff to Vice President Joe Biden, and Carol Browner, President Obama's top energy and environmental adviser.

By Oct. 28, 2010, Aditya Kumar, an aide to former White House chief of staff Rahm Emanuel, questioned DOE's chief of staff about what the implications of the layoff announcement would be.

The next day the head of DOE's loan program headed to a meeting at the Office of Management and Budget for a confidential briefing that explained the impact the consolidation effort would have on the DOE loan.

That document acknowledged that Solyndra's financial condition had deteriorated and indicated that the consolidation would require adjustments to DOE's loan terms. But despite the adjustments and the layoffs that the consolidation would cause, DOE indicated that it was supportive of the plan because it offered "potential improvement of DOE's recovery prospects." The consolidation would allow the company to move ahead with production in the new facility that DOE helped fund under a refocused sales and marketing strategy.

That same day, Browner's top deputy, Heather Zichal, sent an ominous email to DOE chief of staff Rod O'Connor.

"So how do we think this lay off announcement impacts the loan we gave them?" she wrote. "They build the manufacturing facility but it calls into question the longer term viability of the company?"

Five days later, the layoffs of 40 employees were announced along with plans to not renew contracts with 150 temporary workers.

"We're adjusting our plans to be more in line with where the market is and where our business is at the moment," Harrison said at the time.