Treasury Inspector General Opens Probe Into Obama's Solargate

Tyler Durden's picture

In the latest installment of what is rapidly becoming Obama's Keynesian Solargate, we learn that the Treasury Department's Inspector General has opened an investigation of the now defunct $528 million government loan to Solyndra which has no chance of getting repaid, following what will be a pennies on the dollar liquidation of the company, especially since it is primed by a $75 million term loan to George Kaiser, a documented Obama "bundler" as was documented previously. Per the AP, "A spokesman said Thursday that the inspector general is reviewing the role and actions of the Federal Financing Bank, a government corporation supervised by the Treasury Department. The bank provided the low-interest loan to the Fremont, Calif.-based company." The "concern" is that Obama has pushed levers to get the investment in a venture controlled by a "friend" on a fasttrack, with the White House Office Of Management Supervision urging the DOE to release the funds without proper diligence. "The House energy committee released documents Wednesday that appeared to show senior staff at the White House Office of Management and Budget chafing about having to conduct "rushed approvals" of a loan guarantee for Solyndra. Republican members of the committee said the emails raised questions about whether the loan was rushed to accommodate a Solyndra groundbreaking ceremony in September 2009 that featured Vice President Joe Biden and Energy Secretary Steven Chu." And while there is more, we will spare the Treasury IG some time (assuming he is at least a little less corrupt than everyone else in the administration and actually plan on conducting a legitimate investigation) and advise him to simply look at campaign and other contributions by Solyndra's equity backers which features the George Kaiser Family Foundation, U.S. Venture Partners, CMEA Ventures, Redpoint Ventures, Virgin Green Fund, Madrone Capital Partners, RockPort Capital Partners, Argonaut Private Equity, Masdar and Artis Capital Management. When in doubt, always follow the buck... especially when it is looking for a very fast turnaround courtesy of taxpayer capital IRR padding.

And speaking of the "more"

We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around," said one of the emails from an unidentified OMB aide to Biden's office.

 

In another email exchange obtained by the committee, an Energy Department official asked a staff member at OMB if "there is anything we can speed along on the OMB side." Again, neither official was identified.

 

"I would prefer that this announcement be postponed," the OMB official replied. "This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right."

 

White House spokesman Jay Carney said Wednesday the emails don't suggest that the White House was pushing for the loan to be made.

Of course, and Europe may or may not do everything in its power to lever up on its sovereign bailout, as per Timmy G who is about to teach the ECB all about the benefits of unlimited private upside, and unlimited taxpayer downside, courtesy of Bernanke's own brilliant TALF construct, which worked at a time when QE 1 and 2 would still be able to add $2+ trillion to the balance sheet of the Fed, but will have some serious trouble now that every central bank's assets are full to the brim.

Anyway, back to Solyndra:

Solyndra once was the showcase for President Barack Obama's efforts to increase investment in renewable energy and to generate jobs. But the marketplace for its products changed dramatically over the past year. Chinese companies have flooded the market with inexpensive solar energy panels, and Europe's economy weakened demand from customers. The result has been an unprecedented drop in solar cell prices this year. Two other solar panel manufacturers also filed for bankruptcy in the past month.

 

Administration officials stressed that private investors thought so highly of Solyndra's prospects that they put more than $1 billion of their own money into the company.

And there it is: to find out why this deal was massively botched up, just find out what influence said PE firms injected on Obama. And also find out what other equity investors stand to lose if the DOE does not dispense with the balance of its "stimulus" loans in time:

The Obama administration is moving to finalize as many as 15 loan guarantees for renewable energy companies before a federal stimulus program ends on Sept. 30. Republicans question whether that could lead to more loans to companies that fail like Solyndra.

The answer? A resounding yes. But we will give the president one thing: he sure is creating entry level bankruptcy attorney and financial advisor jobs, and a whole lot of billable hours, which will be funded by the bankrupt estate, which, incidentally means, the US taxpayer.