As the Biden administration seeks to launch a series of radical environmental proposals promising a government-subsidized new green future, it is important to remember: we’ve heard this song before.
Judicial Watch filed a Freedom of Information Act (FOIA) against the Office of Management and Budget and the U.S. Department of Energy seeking records of communications between Ron Klain, President Biden’s chief of staff, and bankrupt solar panel manufacturer Solyndra. Solyndra was one of the most prominent failures in the Obama-Biden administration’s attempt to force expensive alternative energy onto American consumers.
Solyndra was founded in 2005, manufacturing rooftop solar panels chiefly for commercial applications. Through political contacts it became the centerpiece of Obama administration efforts to prove that affordable solar power was the wave of the future, and could create good paying jobs. In 2009, then-Energy Secretary Steve Chu arranged for $535 million in Federal loan guarantees for the company, at favorable terms of around one percent interest. A later review by the Government Accountability Office found the Department of Energy announced Solyndra’s loan approval “prior to completion of external reviews required under procedures,” but no matter. The ends justified the means.
Solyndra promised that it would create 3,000 construction jobs and 1,000 permanent manufacturing positions. At a September 2009 kick-off event for the construction of the Fremont production plant, then-Vice President Biden, appearing via remote hookup, assured the public that “these are jobs that won’t be exported.”
But financial realities overtook political rhetoric. In 2010 the company tried to springboard from Obama’s largesse into a lucrative initial public stock offering (IPO), but despite the loans and the hype, the numbers simply weren’t there. In the first three quarters of 2009, the company only grossed $59 million against outlays of $108 million. An independent audit by the firm Price Waterhouse Cooper assessed 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.” The investment community cooled to the IPO and it was withdrawn. And despite Biden’s claim, after the failed IPO attempt Solyndra exported half its manufacturing to China.
President Obama made a high-profile visit to Solyndra in May 2010, announcing that it was “leading the way to a brighter and more prosperous future.” But even presidential intervention was not enough to change the realities of the marketplace, and Solyndra later laid off its 1,100 workers and filed for bankruptcy.
Judicial Watch is seeking to uncover the full back story to the Solyndra debacle and expose what role Biden and his staff played in it, as well as who profited from White House political connections, and how. Internal emails discovered by investigators for the House Energy and Commerce Committee in 2011 show that the Obama-Biden administration was closely following the Solyndra case, “even as analysts were voicing serious concerns about the risk involved.”
Ron Klain was in the mix from the beginning. When doubts about the planned sweetheart loan were raised, Klain cautioned in a March 7, 2009, email, “If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY.” A White House budget analyst reiterated on March 10 that “this deal is NOT ready for prime time.” But nine days later it went forward.
Klain was instrumental in getting President Obama to visit Solyndra, and when concerns arose about the optics should the company fail, Klain wrote to Obama aide Valerie Jarrett, “Sounds like there are some risk factors here, but that’s true of any innovative company POTUS would visit. It looks OK to me. … The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012—but that to me is the reality of saying we want to help promote cutting-edge, new-economy industries.”
It soon became clear this was a losing gamble. In late October 2010, shortly before the midterm Congressional elections, Solyndra CEO Brian Harris notified the Department of Energy that the company would be shutting down its new factory and laying off workers. White House energy adviser Heather Zichal e-mailed Klain, “Here’s the deal: Solyndra is going to announce they are laying off 200 of their 1,200 workers. No es bueno.” The White House then pressured Solyndra to delay announcing the closure to November 3, the day after the election, to avoid the political fallout. It hardly mattered, since on Election Day Republicans saw the largest electoral gains in decades.
Chief of Staff Klain’s name seems to pop up wherever you look in the troubling Solyndra story. And it is important to get the truth out as the White House plans to fund more such boondoggles with sweetheart loans and other such deals in its headlong attempt to show that the government is somehow smarter than the marketplace when it comes to affordable energy. So remember this when John Kerry tells energy workers whose lives are being turned upside down by reckless Biden edicts to make “better choices” and “go to work to make the solar panels.” We have been down this road before. It failed, and it will again.
Chris Farrell is director of investigations and research for Judicial Watch, a nonprofit government watchdog. He is a former military intelligence officer.