While Solyndra's CEO assured Congress that its finances were improving, the company was preparing documents showing its weakening health, a House committee learned last week.
House Republicans released a memo yesterday outlining how they see the Solyndra story, from its origins under President George W. Bush's Department of Energy to bankruptcy and a Federal Bureau of Investigation raid last week.
Solyndra received a $535 million federal loan in 2009 to build a solar-manufacturing plant in California, but the company collapsed suddenly two weeks ago, igniting criticism of the White House's clean energy plan. The Republicans' memo previews how Republicans will question the company and DOE brass when they arrive on Capitol Hill tomorrow.
In July, the memo says, CEO Brian Harrison met with several members of Congress to say that Solyndra's revenues were growing. However, last week, staff from the House Energy and Commerce Committee met with DOE and heard a different story.
"DOE Loan Programs Office staff stated that during that same period [July], the company was preparing to restate some of its projected financial statements to reflect increasing market and pricing pressures on its products, resulting in decreased revenues," the memo says.
When Solyndra's investors found out, they balked at providing further funding to the company. DOE began looking for other investors, in the hopes of "restructuring" Solyndra's debt load and keeping the company running.
DOE had already done this once -- in February, when it took the unusual step of giving private investors the first claim on repayment, in exchange for Solyndra getting a $75 million lifeline.
OMB saw risk of loan, but later approved it
DOE couldn't find enough investors for another round, and it informed the company on Aug. 30. The Solyndra board met, agreed to file for bankruptcy, and announced that the next day, according to the memo.
The document also offers new details on how Solyndra was processed through DOE, a point of interest for congressional investigators who want to know if it was properly vetted.
Solyndra got its first approval from DOE in August 2007, when it scored 88 out of 100 in a technical review. It submitted a full application in August 2008, the memo says.
After President Obama's election, the Solyndra application made it to an approval committee. But the committee found too many holes, such as the absence of an independent market analysis, to approve it.
DOE hired a consultant to write that analysis, which it received on March 6, 2009. The application proceeded. Eleven days later, it arrived at a more senior approval board that included Energy Secretary Steven Chu.
This board negotiated terms with Solyndra and issued a "conditional commitment" -- an outline of the deal, assuming Solyndra met certain conditions. The company got to work raising its part of the money.
The last hurdle was Solyndra's "credit subsidy cost": essentially, a measure of how risky the loan was. DOE had given the Office of Management and Budget a figure, according to the Republican memo, but OMB felt DOE had underestimated the riskiness of the loan.
OMB recommended adjustments, which DOE accepted, and the loan guarantee was finalized on Sep. 2, 2009.
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