Wow, I bet the White House and DOE are kicking themselves for ignoring this guy. Check out this e-mail between OMB staff from Jan. 31, 2011, subject line: “Solyndra optics.” It was written as DOE officials were engaged in negotiations to restructure the Solyndra loan guarantee in light of the company’s obvious financial troubles. The second paragraph is eerily prescient, and shows just how skeptical the budget wonks were about Solyndra’s prospects:
Although the decision has already been made for OMB not to play an active role in determining what to do with Solyndra, the Director/S-1 meeting tomorrow might present an opportunity to flag to DOE at the highest level the stakes involved, for the Secretary to do as he sees fit (and be fully informed and accountable for the decision). Although optics are generally out of our lane, it may be worthwhile for the Director to privately make this point to the Secretary:
Given the PR and policy attention Solyndra received since 2009, the optics of a Solyndra default will be bad whenever it occurs. While the company may avoid default with a restructuring, there is also a good chance it will not. If Solyndra defaults down the road, the optics will arguably be worse later than they would be today. At that point, additional funds have been put at risk, recoveries may be lower, and question will be asked as to why the Administration made a bad investment, not just once (which could hopefully be explained as part of the challenge of support innovate technologies), but twice (which could easily be portrayed as bad judgement, or worse). In addition, the timing will likely coincide with the 2012 campaign season heating up, whereas a default today could be put in the context of (and perhaps even get some credit for fiscal discipline / good government because the Administration would be limiting further taxpayer exposure) letting bad projects go, and could make public steps it is taking to learn lessons and improve / limit future lending.
In the end, obviously, DOE agreed that optics were generally out of OMB’s lane, and pushed ahead with the restructuring anyway. Furthermore, in what appears to be a blatant contravention of federal law, DOE awarded priority status to Solyndra’s private investors in the event of a future default. But they learned their lesson right? Er, maybe not.
Terminology question: by "optics" should I infer "political fallout"?
Reply to this commentLinkReport Abuse"Optics" meaning "how will this LOOK to the public".
Reply to this commentLinkReport AbuseFor real. It's not we're all wonks to the nth here. :D
Reply to this commentLinkReport AbuseI never saw "optics" used this way before Obama.
Reply to this commentLinkReport AbuseNo, it's been in circulation for years in gov't circles. Buzzword for 'how will this look?"
Reply to this commentLinkReport Abuse"People have got to know whether or not their President is a crook. Well, I'm not a crook."
Reply to this commentLinkReport Abuse-- Barack Hussein Nixon
This is stunning. Totally stunning. Obama is an abysmal failure of epic proportions. I can't believe his arrogance and stupidity combined. It's a toxic mix for the country.
Reply to this commentLinkReport AbuseIf a tree falls in the forest and the MSM don't report on it, does it make a sound?
Reply to this commentLinkReport AbuseIf that tree involves indictments, criminal trials and prison, thankfully, the tree makes such a sound that even the MSM can’t avoid reporting on it. These Solyndra loans represent corruption at the highest levels.
Reply to this commentLinkReport AbuseIt would have been nice if there weren't so many names redacted. As best I can tell, the career bureaucrats - almost all of whom expressed profound doubts and skepticism about this deal - all had their names redacted. The political appointees - who you might expect, all were acting politically - all seem to not have had their names redacted.
Two things jumped out at me. First, the career employees seemed to be executing the kind of due diligence a taxpayer would expect. And second, the political appointees completely ignored pretty sage and prescient advice just to help their boy out. It's sickening.
I realize $500M isn't all that much against the backdrop of a $3T budget, but it's still $500M. If you were going to try to secure that kind of capital in the private market, it would be an INSANE deal in terms of size. Something like that would be analyzed until it didn't move any more, and then it would be analyzed again particularly because we're talking about a relative start-up company.
There's a reason Solyndra couldn't go to the private equity firms: They were a horrible risk with limited (if any) upside. Only our government is stupid enough to write that kind of paper.
Reply to this commentLinkReport AbuseI think your analysis is fantastic as usual, Scott. The GOP is developing an antipathy to government employees which I don't think is justified. As these emails show, these guys were well informed and producing work products of extremely high quality. It is not their fault that their advice was ignored, and I can't imagine how we could wish for more of any government employees, no matter how much we paid them.
Reply to this commentLinkReport AbuseIncidentally, I did a quick Google search on the un-redacted names. One of them, a Lachlan W. Seward, seems to be the guy who is (or was) in charge of handing out the government-guaranteed research loans for the big electric car push a couple years ago. There's a NYTimes story detailing the ire of several of our Senators because most of the allocated money still hadn't been lent. Seward essentially responds that the due diligence is laborious and time-consuming process, which is why most of the money had not yet been lent.
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Let's hope that those $25B in loans weren't as risky as this one clearly was.
Reply to this commentLinkReport AbuseSeward's folly....
Reply to this commentLinkReport AbuseAnd that, class, is how to write a CYA memo....
Reply to this commentLinkReport AbuseMy exact thought when considering these memos. Sure these guys are sharp. But consider exactly how good your posterior-camouflage skills need to be in this administration. Is there any doubt that without these memos, we'd be hearing the president saying, "This is not the DOE underling I knew," and throw him under the bus?
Reply to this commentLinkReport AbuseThey've seen how The Boss operates...and got out ahead of the 24-hour news cycle. Obama has on numerous occasions blamed unnamed, unidentified underlings for his and the the Administration's screw ups.
Reply to this commentLinkReport Abuse"Given the PR and policy attention Solyndra received since 2009..."
Wasn't there a new President in 2009? What was his name? Just sayin'.
My real point: Has anybody noticed the swift and nearly immediate nature of these email leaks? I think there is a group of folks inside the Administration that said "If this comes to a head, I'm releasing everything I can find. I am not going to jail for Obama." It's becoming clear that there were people forced into this drug deal.
These are very specific emails with very specific officials identified. It is pretty clear to even a causual student of the Federal Bureaucracy that the Solyndra scandal goes all the way to the top. There must be some incredibly damning information still to be uncovered. Won't be long before Obama officials start taking the 5th.
Reply to this commentLinkReport AbuseYup...the rats are deserting the ship. After gnawing a few extra holes in the hull on the way out.
Reply to this commentLinkReport AbuseIt's totally astonishing that we would allow a halfwit particle physicist to influence the splashing of half a billion bucks on a low tech solar company (headquarters in the south bay, just like chumpass Chu and his crony buddies)without an avenue to prosecute and throw these clowns in jail. This is the most corrupt executive in the history of this Nation. Horrifying.
Reply to this commentLinkReport AbuseI hardily agree, the Noble Prize does not translate into a competent administrator.
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