Top Solyndra executives are scheduled to appear today before the House Energy and Commerce Subcommittee on Oversight and Investigations. But that’s all they’ll be doing. As reported earlier this week, Solyndra CEO Brian Harrison and CFO Bill Stover will invoke their Fifth Amendment rights and decline to answer any questions from lawmakers with respect to the $535 million taxpayer-guaranteed loan the company received before going bankrupt.
Here are a few of the questions that Harrison and Stover won’t be answering tomorrow:
Advertisement
1) Why did your company feel it was necessary to build an entirely new production facility, in an area notorious for its abundance of unused commercial real estate? Once the decision was made with respect to the need for a new facility, why did Solyndra choose the location that it did? During the loan-approval process, did anyone at the Department of Energy ever question these decisions?
Subcommittee member Brian Bilbray (R., Calif.) called it “absurd” that no one appears to have raised any concern about the decision to build a brand-new production facility. As a native Californian, Bilbray knows all too well that the business environment in the state has engendered a surplus of abandoned warehouses, any of which could be rented or retrofitted to accommodate Solyndra’s operation. Start-up businesses are constantly failing, and others are “fleeing the state” in search of more favorable economic conditions, Bilbray says.
Which raises another point about the location of the facility. Electricity costs in California, at 22 cents per kilowatt-hour, are twice as high as those in midwestern states such as Ohio. On top of that, the state has some of the strictest state and local regulatory regimes in the country in regard to air quality, water quality, storm runoff, occupational safety, hazardous-waste generation, and so on. And yet Solyndra proposed to build on 30 acres of virgin farmland in Fremont, Calif. (in the Bay area), on a site that was classified by the EPA as a “non-attainment zone,” meaning that air quality did not meet certain federal standards and local authorities needed to implement a plan to reduce pollution. All told, they chose one of the most expensive tracts of land in the country on which to build. Given the involvement of federal funds, the public deserves an explanation for that decision.
2) Solyndra officials visited the White House 20 times between March 2009 and April 2011. What was the purpose of these visits, what was discussed, and who was in attendance? Can you describe the role of George Kaiser, a major Obama fundraiser and Solyndra investor, in arranging these White House meetings?
Kaiser, a billionaire investor from Oklahoma who has openly boasted about his ability to use his Beltway connections to get his hands on federal funding, insists he did not participate in any discussions in regard to the Solyndra loan agreement. This is highly suspect. Kaiser’s foundation, the George Kaiser Family Foundation, through one of its investments arms, Argonaut Ventures, was a primary investor in the company, at one point owning a 39 percent stake. Kaiser made multiple visits to the White House in the months before the loan guarantee was formally approved, and records show he was involved in arranging a number of meetings between Solyndra executives and top administration officials.
Representative Bilbray (R., Calif.) told me he would like to know to what extent Solyndra officials made a “hard sell” to the White House regarding the “environmental benefits” of the thin-film solar-panel technology they were producing, which from an economic standpoint happens to be one of the riskiest investments of its kind. Bilbray fears the administration’s “blind faith in all things solar” caused to it make poor investment decisions.
New buildings next to abandoned buildings are common in California. All across the state one can drive by a derelict mini mall on one side of a street while a new one is under construction across the street.
@thomas -- That is true, but the crux of this is the use of taxpayer funds to build the new facility when perfectly adequate buildings were available for a fraction of the cost, and in different states.
Rule #1 for start-ups: Watch your expenses and go lean. Heck, Apple was known to use wood doors and saw horses for their desks. That's an example of the difference between private investment and public "assistance".
My question is "After the FBI was instructed to gather up all of the documents from the Solandrya offices, did they burn them or hide them under Obama's bed?"
I'll try to answer some of these questions. I have been speaking with a SOL insider for a few weeks.
The FAB2 facility was deemed "necessary" in order for SOL to produce their product at a cost that was (then) competitive. The budgeted cost was $775mm.
The company/investors put up $240mm, the DOE $535mm. The debt equity ratio for the financing was 1/3 - 2/3. That is not at all unreasonable. A substantial amount of equity was involved in FAB2. The DOE got a 1st lien on a state of the art plant. The DOE got (on time and on budget) exactly what it signed up for.
The location was driven by the talent pool. This facility was not operated by entry level workers. It was mostly engineers. This is no different that the other 1000 or so stories in the Silicon Valley. Electric costs were never the variable that would make or break the company. The price of solar panels was the the problem, not input costs.
100% of the DOE money went to build Fab2. No money was used by the company for operations. The claims the company may have spent unwisely may be true (I don't know) but the source of this spending was not the DOE.
The DOE had a first lien on FAB2. They gave that up in February 2011. The alternative at that time was an immediate BK. DOE had no choice but to take a back seat to the required new money. Folks, that is the way it works. The last money in, always has preference.
There is so much evidence that says the DOE knew what was happening in the final months. There was a critical additional financing that took place on 7/29. It was clear to any and all that the company was on the brink just six weeks before the BK. DOE was involved with the 7/29 transaction. They had a supervisory role on the Board.(the 7/29 deal had Board approval)
If the DOE says they had no idea what was coming they are either misrepresenting the facts, or the were just dumb and blind. Take your pick.
The insider has provided detailed information on the events at SOL. His words are here:
Thanks Bruce. Your links illustrate the complexity of the matter and why those of us not educated in this area should refrain from judgement until the facts are known.
Another government financed "green scam" that ended up in the toilet- Green Vehicles, Salinas, California-just a short drive down the road from Solyndra.
Anyone who, after hearing the opening statement of sub-committee chair Cliff Stearns, did NOT take the Fifth should have their head examined. It was nothing short of a prosecutor's opening statement.
Did they waste money? Did the CEO double his salary in 2009?
You need a union crew to build a new facility in CA. Follow the money and you will find Dem donors, both union and construction co owners. I am shocked, shocked to hear that donations are going on here.