The ongoing scandal continues to blaze at Solyndra. Solyndra Corporation, a San Francisco Bay area solar panel start-up company, is under fire in the immediate aftermath of its August 31 filing for Chapter 11 bankruptcy and laying off over 1,000 workers, which is roughly one-fourth of those who were employed by Solyndra at the time.
Critics, such as climate change denier and Republican Party Presidential candidate Michele Bachmann, are referring to the deal as “crony capitalism” gone arwy. In an interview with Fox News‘ Greta Van Susteren, Bachmann stated, “This is what the American people don’t want. They don’t want crony capitalism. It infuriates them. We saw that with President Obama, when we saw over $500 million dollars go to Solyndra, who was a political donor of President Obama.”
The $500 million Bachmann is referring to is a loan guarantee that was given to Solyndra from the Obama Department of Energy in March 2009.
Others, such as The National Journal and The New York Post have also gone into “blame Obama” attack mode, blaming him not only for giving a loan to a company that went under, but furthermore, for taking campaign money from a fundraiser set up by George Kaiser. ThinkProgress‘ Stephen Lacey explains who Kaiser is and why he matters:
Because one of the Solyndra investors, Argonaut Venture Capital, is funded by George Kaiser — a man who donated money to the Obama campaign — the loan guarantee has been attacked as being political in nature.
And yet, a deeper probe shows that, while an easy scapegoat, there was another key player in this game, who has gone unmentioned by the mainstream press – former President George W. Bush.
ThinkProgress Lays Out Real Timeline
In an article titled, “Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story,” Lacey revealed that although the popular narative has been to blame Obama in exclusivity, the reality is that Solyndra was, in actuality, a project spearheaded by the Bush Administration in 2007.
To set the record straight, Climate Progress is publishing this timeline — verified by Department of Energy officials — that shows how the loan guarantee came together under both administrations. In fact, rather than rushing the loan for Solyndra through, the Obama Administration restructured the original Bush-era deal to further protect the taxpayers’ investment.
The complete, month-by-month, year-by-year timeline, provided by Lacey and ThinkProgress in the article, can be seen below:
May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics, Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.
July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.
February 2006 – October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.
December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.
Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.
October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the “company’s second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location.”
November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra’s very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.January 2009: In an effort to show it has done something to support renewable energy, the Bush Administration tries to take Solyndra before a DOE credit review committee just one day before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE because it wasn’t ready for conditional commitment.
March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE’s credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.
June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.September 2009: Solyndra raises an additional $219 million. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1703 program. From application to closing, the process took three years – not the 41 days that is sometimes reported.
January – June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra’s ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from investors.November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month — on time and on budget — employing around 3,000 construction workers during the build-out, just as the DOE projected.
February 2011: Due to a liquidity crisis, investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company – which was a going concern – for market value, which would have guaranteed significant losses.
March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.House Energy and Commerce Committee Chairman Fred Upton (R-MI): “despite the Administration’s urgency and haste to pass the bill [the American Recovery and Reinvestment Act] … billions of dollars have yet to be spent.”And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL): “The whole point of the Democrat’s stimulus bill was to spend billions of dollars … most of the money still hasn’t been spent.”
June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50%, but analysts worry how the company will compete with the dramatic changes in conventional PV.August 2011: DOE refuses to restructure the loan a second time.
September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers and files for bankruptcy. The news is touted as a failure of the Obama Administration and the loan guarantee office. However, as of September 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3% of DOE’s loan portfolio. To date, Solyndra is the only loan that’s known to be troubled.
Meanwhile, after complaining about stimulus funds moving too quickly, Congressmen Fred Upton and Cliff Stearns are now claiming that the Administration was pushing funds out the door too quickly: “In the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning.”
Reframing the Dialogue?
Lacey’s piece is now the definitive narrative of the Solyndra saga. Whether it sticks in popular discourse, though, is anyone’s best guess. Kudos to him and ThinkProgress though, for putting this on the map.