The rapidly evolving scandal surrounding a $535 million government loan to Solyndra, a California solar energy company, that shuttered its doors and filed bankruptcy last week, has now been connected to the office of Vice-President Joe Biden.
Emails obtained by investigators for the House Energy and Commerce Committee and released to ABC News demonstrate how deeply involved the White House was at the highest levels in fast-tracking the approval of the politically well connected start-up in direct conflict with numerous private as well as government warnings that the survival of the company was very doubtful.
On March 10, 2009 according to ABC a White House budget analyst warned in an email that "This deal is NOT ready for prime time." That followed an email from Ronald A. Klain, Chief of Staff to the Vice-President on March 7 that said, "If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY."
The White House and the Department of Energy pressed forward and fast-tracked the approval of the first green energy loan of the Obama Administration in March, 2009. In addition to questions about possible political cronyism and corruption, the terms of the loan included a subordination of the taxpayer's interest to private investors and the lowest interest rate of any such loan approved by the Obama Energy Department.
As reported earlier this week on these pages, numerous industry analysts had raised questions about the viability of Solyndra's business model. Peter Lynch, a solar industry analyst, explained in simple terms to ABC News the folly of Solyndra's plan; "It's very difficult to perceive a company with a model that says, well, I can build something for six dollars and sell it for three dollars. Those numbers don't generally work."
In 2008, the investment analysis agency Fitch rated Solyndra "B+" – right between "highly speculative" and "speculative." Dun & Bradstreet rated the company only "fair."
PricewaterhouseCoopers had filed a public audit with the SEC that Solyndra "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern."
