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Obama Fundraiser Pressed on Solyndra Loan at Energy Department

FBI Probing Solyndra for Possible Fraud
Federal Bureau of Investigation (FBI) agents enter the Solyndra LLC headquarters in Fremont, California, U.S. Photographer: David Paul Morris/Bloomberg.

A fundraiser for President Barack Obama who became an Energy Department official pressed colleagues to act on Solyndra LLC’s application for a $535 million U.S. loan guarantee after he was barred from participating in the decision, according to e-mails.

Steve Spinner, who advised the loan guarantee program, was recused from discussions about aiding Solyndra, the California maker of solar panels that filed for bankruptcy Sept. 6, two years after getting the aid. Spinner’s wife worked at a law firm that represented the company.

Spinner raised at least $500,000 for Obama’s 2008 presidential campaign, according to the Center for Responsive Politics. E-mails obtained yesterday show Spinner was active in discussions related to the loan guarantee, which is the subject of a congressional investigation. The Federal Bureau of Investigation is also investigating the company for possible fraud.

Republicans seized on the e-mails, part of a new batch of documents the White House sent to congressional investigators, as further support for their contention that the decision to aid Solyndra was politically tainted and economically unsound.

“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,” House Energy and Commerce Chairman Fred Upton, a Michigan Republican, and Representative Cliff Stearns, a Florida Republican and chairman of the investigations panel, said in a statement.

‘Getting Itchy’

In an Aug, 28, 2009, e-mail, Spinner wrote to another Energy Department official 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.” He added, “They’re getting itchy to get involved if needed. I don’t want that.”

In the e-mail, Spinner asked if officials in the Office of Management and Budget, which was responsible for helping to weigh the risks of the loan guarantee, had signed off on the project. “How ---- hard is this?” Spinner wrote.

In another e-mail, to Aditya Kumar, an aide to White House Chief of Staff Rahm Emanuel, Spinner listed Solyndra’s major investors and attached a biography of George Kaiser, an Oklahoma billionaire and Obama fundraiser whose family foundation invested in the solar panel company.

Republicans have cited Kaiser’s connection with Solyndra to suggest political considerations influenced the award. The White House and the foundation say Kaiser didn’t lobby for the guarantee.

Spinner’s Departure

Spinner left the department at the end of September 2010, the Energy Department said. Spinner, who is now a fellow at the Center for American Progress, a Washington organization that advises Democrats, didn’t respond to phone and e-mail requests for comment.

Spinner, who has described himself as an investor in clean-technology and Internet companies, tried to allay doubts about helping Solyndra, the e-mails show.

Responding to an Aug. 19, 2009, e-mail from Kumar noting concerns in the White House’s Energy and Climate Change office about the Solyndra deal, Spinner responded, “It’s a great announcement that will be well received.”

The e-mails show White House interest in promoting Solyndra even after early indications the company was facing financial difficulties.

Obama’s Interest

Kumar, Emanuel’s aide, wrote in an Aug. 13, 2009, e-mail that Obama “definitely wants” to take part in an event announcing final approval of the loan guarantee.

Vice President Joe Biden ended up participating by video feed. Energy Secretary Steven Chu attended the groundbreaking on Sept. 4, 2009 for the new plant to be paid for in part with the U.S. loan.

The new documents don’t undermine the administration’s position that the decision on the loan was merit-based, an administration official who asked not be identified discussing the materials sent to Congress, said yesterday. Spinner was merely seeking an answer on the loan as the groundbreaking date approached, the official said.

In a Sept. 29 news release, the Energy Department said Spinner was barred from engaging in discussions affecting specific loan applications in which his spouse’s law firm was involved.

The firm, Wilson, Sonsini, Goodrick & Rosati, has said Allison Spinner didn’t do work for Solyndra, according to the department statement. Steve Spinner joined the department at the end of April 2009 after it had given a conditional commitment for the award, according to the statement. Solyndra won final approval in September 2009.

Allowed to ‘Oversee’

Because Spinner’s wife didn’t participate in or benefit from her law firm’s work for Solyndra, he “was authorized to oversee and monitor the progress of applications, ensure that the program met its deadlines and milestones, and coordinate possible public announcements,” Damien LaVera, an Energy Department spokesman, said yesterday in an e-mail.

“He was not allowed to make decisions on the terms or conditions of any particular loan guarantee or decide whether or not a particular transaction was approved,” LaVera said.

The e-mails sent to Congress yesterday also show a Treasury Department official expressed concern that a restructuring of Solyndra’s loan guarantee approved by the administration in February may have violated the law and Department of Energy regulations because it gave taxpayer debt a back seat to $75 million in new investment in the case of liquidation.

Subordinating Loan

“Our legal counsel believes that the statute and the DoE regulations both require that the guaranteed loan should not be subordinate to any loan or other debt obligation,” Mary J. Miller, assistant secretary for financial markets at the Treasury, wrote in an Aug. 17, 2011, e-mail to Office of Management and Budget Deputy Director Jeffrey Zients.

Energy Department spokesman LaVera said yesterday that the two departments discussed the issue and lawyers with his agency determined the restructuring was legal “based on a careful analysis of the statute.”

By the time Miller wrote the e-mail, the company was approaching bankruptcy and administration officials were discussing Solyndra’s request for a second loan restructuring. The Energy Department denied that request on Aug. 30, and the company closed its doors the next day.

Officials in the White House, including from the chief of staff’s office and National Economic Council, were aware of Solyndra’s dire financial state in the weeks before its collapse, the e-mails show.

Solyndra a ‘*#-@storm’

After participating in one conference call on Solyndra, Heather Zichal, deputy assistant to the president for energy and climate change, wrote to an OMB official on Aug. 26, “*#- @storm.”

On Aug. 11, one OMB official wrote another responding to an attached news article that quoted Jonathan Silver, the executive director of the loan guarantee program, describing it as “the largest and most successful clean energy funding effort in U.S. history.”

“I wonder if he was unaware of the true situation at Solyndra,” the OMB official wrote. “Or if he was trying to salvage something by showing DoE confidence.”

Silver resigned from the post this week to take a position at a Washington policy center.

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