Report: Obama White House Intervened To Get Loan For Questionable Solar Energy Firm

The connections between the White House and failed solar energy company Solyndra deepen.

The investigation into the federally guaranteed loans to the now-bankrupt solar energy firm Solyndra has already begin, and ABC News reports that House investigators the White House became directly involved in the loan application process in order assist Solyndra in obtaining the loans that it has now defaulted on:

House investigators said they have uncovered evidence that White House officials became personally involved in an Energy Department review of a hot-button $535 million loan guarantee to the now-failed California solar company Solyndra.

The allegation surfaced in a letter House Energy Committee Chairman Fred Upton (R-Mich.) sent to the White House Thursday night, saying he planned to accelerate efforts to understand an investment deal that may have left taxpayers out half a billion dollars.

“We have learned from our investigation that White House officials monitored Solyndra’s application and communicated with [Department of Energy] and Office of Management and Budget officials during the course of their review,” the letter says.

Thursday’s letter, which calls on the White House to turn over correspondence between administration officials, Solyndra and its investors, presents the most pointed suggestion that the White House had direct involvement in the financing.

“How did this company, without maybe the best economic plan, all of a sudden get to the head of the line?” Upton told ABC News in an interview this week. “We want to know who made this decision … and we’re not going to stop until we get those answers.”

This isn’t necessarily a new revelation. Way back on May 24th, ABC News was reporting the Administration had cut corners on behalf of the firm in order to get the loan approved:

The Obama administration bypassed procedural steps meant to protect taxpayers as it hurried to approve an energy loan guarantee to a politically-connected California solar power startup, ABC News and the Center for Public Integrity’s iWatch News have learned.

The Energy Department in March 2009 announced its intention to award Solyndra Inc. a $535 million loan guarantee before receiving final copies of outside reviews typically used to vet such deals. An independent federal auditor who has reviewed the energy loan program said moving so quickly without completing thorough reviews risked exposing the program to claims of political influence and put taxpayers at greater risk.

“There’s a consequence if you don’t follow a rigorous process that’s transparent,” said Franklin Rusco, an analyst with the Government Accountability Office. “It makes the agency more susceptible to outside pressures, potentially.”

The Solyndra loan guarantee, advertised by the administration as part of its signature effort to create jobs while weaning the U.S. from traditional energy sources, already has drawn scrutiny on Capitol Hill. Republican members of the House Energy and Commerce Committee have requested documents from the Energy Department as part of an investigation into how the company qualified for government support and then, a year later, closed a plant, laid off workers, and eventually had to renegotiate the terms of the loan guarantee. The shortcuts at the dawn of the deal identified by government auditors have stoked more questions.

The Energy Department said at the time that they had gathered enough independent evidence to approve the loan. However, one of the the key investors in Solyndra was the Oklahoma-based George Kaiser Family Foundation. George Kaiser, who heads the foundation, is a billionaire who also happens to a man who raised large amounts of money for Barack Obama. That, combined with the reported intervention by White House officials, raises some significant questions about the role the White House played in getting a company with a terrible balance sheet a multi-million dollar federally guaranteed loan. As it turns out, though, Solyndra isn’t the only company with connections to the Obama White House that got such loans:

Several political allies of the president have ties to companies receiving Energy Department loans, grants or loan guarantees. For instance, the venture firm of another top Obama bundler, Steve Westly, has financially supported companies that won more than half a billion dollars in energy grants and loans during President Obama’s time in office, iWatch News and ABC News reported in March. Relatively few applicants succeed in winning such benefits. The Energy Department said every one of those awards was won on merit.

Perhaps that will turn out to be the case, but based on the before and after picture of Solyndra it’s pretty clear that the criteria the government was using to determine the viability of the companies it was loaning money to was nowhere near adequate. As I said yesterday, this is by no means surprising. Government bureaucrats simply don’t have the incentive to be careful with these types of decision in the manner that private investment managers do, because they face no consequences for being wrong. That. faced with the possibility of political pressure from the White House, is yet another reason why Government should not be in the venture capital business to begin with.

Rich Lowry calls this “Obama’s Enron.” I’m not sure I’d go that far, but at the very least it does call into question the credibility of the Administration’s entire “Green Jobs” initiative and, if political pressure was indeed applied to the Energy Department then it’s a serious public integrity problem to say the very least. Count on hearing the name Solyndra in the news a lot over the coming months.

FILED UNDER: Barack Obama, Economics and Business, Environment, Politicians, US Politics
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. john personna says:

    Rich Lowry calls this “Obama’s Enron.” I’m not sure I’d go that far, but at the very least it does call into question the credibility of the Administration’s entire “Green Jobs” initiative […]

    Very funny Doug. Very funny indeed.

  2. john personna says:

    Hasty generalization is a logical fallacy of faulty generalization by reaching an inductive generalization based on insufficient evidence. It commonly involves basing a broad conclusion upon the statistics of a survey of a small group that fails to sufficiently represent the whole population.[1] Its opposite fallacy is called slothful induction, or denying the logical conclusion of an inductive argument (i.e. “it was just a coincidence”).

  3. Tsar Nicholas says:

    In Chicago this sort of thing is standard operating procedure. Hell, just wait until the details of that Gibson Guitar DOJ shakedown come to light. It’ll make the sweetheart deal for Solyndra look like a sewing circle.

  4. Forbidden Jimmy says:

    Of course he did! It is called corruption. See Fast and Furious.
    See GE and CEO Immelt.

    Do you think that this “green job” fraud can succeed without this kind of corruption? Did it succeed in Spain?

    What was the definition of insanity?

    With the Holder JustUs Department who will do anything about it? Who will do anything about Fast and Furious? We know what they did with the NBPP! JustUs Department.

  5. Ron Beasley says:

    So Obama did a Rick Perry.

  6. Forbidden Jimmy says:

    @john personna:

    “Hasty generalization is a logical fallacy of faulty generalization by reaching an inductive generalization based on insufficient evidence.”

    What kind of normal person talks like that? Only an academic or one who is a wannabe academic, the same as the academics running this government into the ditch. Hire academics to run jobs programs and have never once had to make a payroll or deal with the health department or the OSHA types. The only experience is in books in a classroom and theory that tey have NEVER actually put inot place on even a small scale and then they are unleashed on the entire USA economy and thus the world economy. When the first batch of academic intellectuals fail, go get another group of them as replacements.

    What was the definition of insanity? Something about doing the same thing over and over again and expecting a different result?

  7. James Joyner says:

    @Forbidden Jimmy: I resent the implication that academics who employ verbiage unfathomable to those external to the linguistic milieu of their subfield are somehow not “normal persons.”

  8. @Ron Beasley:

    I’ve already written about Perry’s Crony Capitalism

  9. john personna says:

    @Forbidden Jimmy:

    Heh, if they put it at Wikipedia, they probably figured we could read it. The neat thing is of course that the dense text branches off, reminding us what inductive reasoning is, etc. It is the beauty of

    Hypertext is text displayed on a computer or other electronic device with references (hyperlinks) to other text that the reader can immediately access, usually by a mouse click or keypress sequence. Apart from running text, hypertext may contain tables, images and other presentational devices.

  10. Ebenezer Arvigenius says:

    We know what they did with the NBPP! JustUs Department.

    Honestly. I love the “new black panther” meme. It’s better that reverse baseball caps were back in the 80’s for determining who you can safely ignore.

  11. Ron Beasley says:

    @Doug Mataconis: I’m aware of that Doug. It is the sort of thing that nearly all politicians who are in a position to do so will do. You and I may not like it but it is a reality and never surprises me or even disappoints me anymore.

  12. CB says:

    @Ron Beasley:

    that is an incredibly sad statement. yet i am in wholehearted agreement, and i doubt we are alone.

  13. jan says:

    Yes, Rick Perry’s cronyism has already been dissected here, and hardily condemned.

    Obama’s own brand of cronyism, catering to special interest groups, and going off-site to see lobbyists, something he chastised when he was running for office is on display now. And, as Tsar mentioned above, and I’ve also brought up in several posts, there is the DOJ’s Gibson Guitar harassment going on that is just blooming in the media, finally getting the public’s attention.

    None of it speaks well of the politicians involved. However, what is more telling is how partisans react to it. I have already said Perry’s dalliance in special treatment to others (donors) bothered me. Now, what I’m reading here is a shrug of the social progressive’s shoulders when there is indication that Obama’s cronyism slip is showing as well.

    That’s hypocritical, IMO. And, I think that’s what I find most discouraging about political partisanship. If someone crosses the line in the group you associate with, it’s rationalized as “No big deal.” But, if a similar injustice or type of misconduct occurs in the opposition’s party, it becomes a sensational event.

  14. Drew says:

    “Obama White House Intervened To Get Loan For Questionable Solar Energy Firm”

    Bad credit decisions? This is impossible, just as volumes of government mandated CRA loans never happened.

    Bloggers and commenters at this very sight tell me so.

  15. Tano says:

    Government bureaucrats simply don’t have the incentive to be careful with these types of decision in the manner that private investment managers do, because they face no consequences for being wrong.

    So what is the failure rate for businesses that receive private-investment loans?

  16. @Ebenezer Arvigenius:

    As a connoisseur of the fine art of the pun, I resent him just for debasing the form by propogating such crap as “the JustUs department”.

  17. michael reynolds says:

    Ah, right on time: a GOP-fabricated pseudo-scandal. Is it that close to election already?

  18. Drew says:

    “So what is the failure rate for businesses that receive private-investment loans?”

    For venture start up – zero. That’s because VENTURE CAPITAL DEALS are funded by VENTURE EQUITY, not 1/3rd by LOANS. Metered money comes later.

    This is called taxpayer SUBSIDY.

  19. Jay Dubbs says:

    Can I be the first to say — Impeachment. Let the fun begin.

  20. john personna says:

    FWIW, there is a piece up at Forbes claiming that Solyndra is not typical and is sort of the failure rate expected in the whole program:

    Critics have seized on the news of Solyndra’s bankruptcy to condemn the Department of Energy’s Loan Guarantee Program, which provided a $535 million loan guarantee in 2009. The National Review’s Greg Pollowitz writes that Solyndra’s failure shows “why the government should not play venture capitalist.” Yet the fact is that, when judged by its entire diverse portfolio of investments, the LGP has performed remarkably well. Indeed, with a capitalization of just $4 billion, DOE has committed or closed $37.8 billion in loan guarantees for 36 innovative clean energy projects. The Solyndra case represents less than 2% of total loan commitments made by DOE, and will be easily covered by a capitalization of eight to ten times larger than any ultimate losses expected following the bankruptcy proceedings.

    The broad success story of the LGP shows why federal investment in clean energy is necessary to help early-stage clean energy technologies achieve scale and reach commercialization. The inherent uncertainty in investing in novel technologies, coupled with the high capital costs and long time horizons, prohibits most venture capital funds from investing in large-scale clean energy projects. Financing tools and direct investment from the federal government can help bridge this well-known “Commercialization Valley of Death,” and the LGP is an effective way of doing that.

    Instead of “picking winners and losers,” as the program’s critics allege, the program actually reduces risk for a suite of innovative clean energy technologies and allows venture capitalists and other private sector investors to invest in the best technology. Rather than picking winners, the LGP enables innovative companies to compete in the marketplace, allowing winners to emerge from competition. And while Solyndra is shutting its doors, companies like SunPower, First Solar, and Brightsource Energy, which also received loan guarantees and other support from the federal government, are industry leading success stories.

    So that’s the “improper generalization” I was talking about up top. Solyndra is 2% of the loan guarantees, they have not all failed.

  21. john personna says:

    Or as Drew might describe it to us, Solyndra is part of a diverse portfolio.

  22. Tlaloc says:

    Government bureaucrats simply don’t have the incentive to be careful with these types of decision in the manner that private investment managers do, because they face no consequences for being wrong.

    wait what incentive do private investment managers have to be careful? They get paid regardless, after all…

    The government at least has accountability measures (as we see here).

  23. Jeremy R says:

    House investigators said

    We’ll see, but as long as this is all just innuendo coming from the House GOP (accusations of favoritism) I’m not expecting them to deliver much beyond that.

  24. TheColourfield says:


    They always say you can count on death and taxes.

    I think we should add one more to the equation, “Drew is as sharp as a bag of hair”

    Let’s see some evidence on CRA, you know, those loans with a much lower default ratio.

  25. Solar energy is fine for plants, but for humans it is nothing but a ridiculous boondoggle. It never pays for the energy inputs without subsidies and never will. Also, contrary to the GREENSHIRT’S baloney, it is very polluting:

    “Solar power is not all sunshine. It has a dark side—particularly in developing countries, according to a new study by a University of Tennessee, Knoxville, engineering professor.

    “A study by Chris Cherry, assistant professor in civil and environmental engineering, found that solar power heavily reliant on lead batteries has the potential to release more than 2.4 million tons of lead pollution in China and India.”

  26. john personna says:


    Let me guess, you hate the EPA, and that countries without strong EPAs suffer pollution.

    (Solar technologies are varied, it takes a certain kind of troll to lump them all into one.)

  27. Andy says:

    Thhe problem isn’t that this company failed, or that this company received a half-billion before failing. The problem is that the White House apparently used political influence during the loan approval process. Would this company have received the loan guarantee absent WH intervention? If the answer us “no” then the WH is responsible for losing a half-billion of taxpayer money.

  28. john personna says:


    Even “influence” has to be divided down. Influence, why? Because it was good for the WH, or because the WH honestly believed it was good for the country?

  29. john personna says:

    (Note that VCs don’t expect 100% success rate. Far from it. They expect low success rate, but they expect the rare successes to be so good the compensate for the whole effort. That’s the nature of an R&D portfolio.)

  30. jan says:


    The problem is that the White House apparently used political influence during the loan approval process.

    That is the underlying problem and the reasoning given behind this investigation, in all the articles I’ve read about it. The question being asked is why this company went to the front of the line for it’s taxpayer funding? I don’t think the “intentions” behind this subsidy is very important, like personna, is trying to insert. Instead, the main issue is was there a violation of processing this Solar firms’s funding, to retroactively determine whether or not there was any malfeasance or undo WH pressure exerted to give money to this company.

    Failure is a secondary consideration, IMO. Most innovative ventures have a higher risk of failure. However, if the money was granted, without a proper business model presented beforehand, then some vital steps were skipped over in having this business venture even qualify for such a monetary gift.

  31. john personna says:


    Jan, when you say “taxpayer funding” you demonstrate lack of understanding. It was a loan guarantee, which, should all have gone well, would have been zero funding.

    The purpose of this portfolio of guarantees was to stimulate green energy development at low cost. If one or two of them fail, it is still low cost, though of course it would have been better if none of them had.

    The thing naive critics don’t get is that it isn’t outlandish that one or two of the guarantees would be [invoked]. There is going to be a natural failure rate.

    So the real question is why the administration liked this company, and if they should have known that it was going to be one of the failures, or if that was bad luck, bigger Chinese subsidies and dumping, or whatever.

  32. john personna says:

    Blast from the past: Obama’s Bid to End Oil Subsidies Revives Debate

    It talks about oil companies receiving $4 Billion (as in Billion) in subsidies. But let’s talk about a $500M loan guarantee, which may not be completely invoked (net resolution value will be whatever the deal was, and after whatever the company managed to pay).

    Why? Because $500 million is emotionally larger than $4 billion … because it’s green.

  33. jan says:

    @john personna:

    personna, where did the ‘loan’ come from, and who is going to be taking it in the shorts because of the bankruptcy?

    Oftentimes failure has nothing to do with so-called ‘bad luck,’ and more to do with bad judgment in looking long range into the future. That’s why there is supposed to be some kind of neutral oversight for these matters. After all, if someone is eagerly willing to loan you money, there is little incentive to do the necessary research to see what may be down the road (like Chinese competition) complicating one’s business model, don’t you think?

    Again, I have no problems with the risk component — IMO every capital venture implies a certain amount of risk. But, when it’s your own money, you tend to dot the i’s and cross your t’s more carefully, than when someone else is fiscally assuming the risk, such as was the case of the government.

    Also, just because this is a “green energy” failure, I don’t think it should get an “affirmative action” kind of pass. It should go through all the rigors of qualification as does any other company requesting such monetary assistance. That’s why “the front of the line” aspect of this loan is what is being investigated.

  34. jan says:

    @john personna:

    Why? Because $500 million is emotionally larger than $4 billion … because it’s green.

    When all else fails try moral equivalency. Or, better yet just do the apples to oranges comparison of green energy to the on-going oil subsidy debate in order to silence debate on how right or wrong this loan to Solyndra was.

    As an aside, never mind that oil companies already have a higher marginal tax rate of 41% as compared to 26% paid by other businesses in the S & P’s.

    However, mainly your insertion of oil as a rationale for the Solyndra debacle is like saying if someone steals a small amount of money that should be overlooked, in lieu of others stealing larger amounts. Also, evaluating the merits or demerits of an action by “intent” is placing more weight on one’s personal emotional view or prejudice of that event, rather than the event itself, which oftentimes produces irrational swings of justice.

  35. NickNot says:


    The question that John Personna brings up – of this being a loan guarantee (and implied not a federal grant, or even fed money) intrigued me. So here is a PR:

    indicating that the “U.S. Department of Treasury’s Federal Financing Bank” was the loaning institution. Sounds a little like one crook looked at the other and said “the big guy said loan ’em the money”.

  36. jan says:


    Thanks for the link!

  37. john personna says:


    If I made $5 ever time a cheater said “marginal tax rate” instead of “effective tax rate” I’d have quite the cash flow.

    Sorry, you are the one trying for moral focus and ignoring the math. It is mathematically true that $4B in subsidies, which reduce a low effective tax rate, happen every year, and total much, much, more than this one-time $500M.

  38. john personna says:

    Exxon Mobil Corp.’s robust balance sheets have become a poster child for what The New York Times dubs the “paradox of the United States tax code.”

    The company’s large 2010 profits allowed them to lead Fortune 500’s annual ranking of the nations’ most profitable firms for the eighth time in a row. But the oil giant’s average effective tax rates are roughly half the 35 percent tax rate that currently stands as the high-water mark for American corporations. Meanwhile, Exxon Mobil and other big oil companies continue to exploit tax loopholes for nearly $4 billion in subsidies each year. These subsidies include write-offs for drilling costs and a deduction for domestic production that was intended for manufacturers, not big oil producers.

  39. jan says:

    @john personna:

    …but, you’re off topic again, and trying to refocus on oil rather than Solyndra. Oil is only a side issue here. I responded to you bringing up oil, by citing a marginal tax rate percentage, and now that has become the issue and not Solyndra.

  40. john personna says:


    No, it is the same issue. It is energy subsidies. We just divide them politically green vs. brown.

    I am actually for unwinding ALL the energy subsidies, but I expect you are uncomfortable about why that won’t happen. It isn’t because a few million go green. It’s because a few billion go brown.