This page has been archived and commenting is disabled.

Why Was Congress Forced To Subpoena Head Of Obama's Budget Office To Get Info On Solyndra?

Tyler Durden's picture




 

As more developments arise in the Solyndra case, we find the specifics of how it was none other than Jacob Lew, the head of the Office Management Bureau, elsewhere known as the guy who puts together all those forecasts that Obama pulls out of his hat as seeing growth of 3.7% in 2012 here and budget savings of $4 trillion there, got subpoenaed, and not just over anything, but over the deal that is rapidly becoming Obama's Solargate: Solyndra. As a recap: the man who is the "expert" on how the US will get out of its multi-trillion deficit had to be subpoenaed by Congress to explain his secretive actions that ended up most likely harming US taxpayers for reasons still unknown (but not for long), and what is far worse, Congress has to subpoena the head of the OMB because it failed to exercise proper oversight of the stimulus money in the $787 billion American Recovery and Reinvestment Act... and all this under the tutelage of a White House which recently won an award for Anti-Secrecy....which was present to the president by among other Gary Bass of OMB Watch...And somehow we are expected to believe that fiscal stimulus in America has even a remote chance of being allocated productively (a fatal Keynesian flaw which Andy Lees described earlier) instead of pumping up crony capitalism schemes that enrich vested interests, and which drown in opacity and obscurity over which not even Congress has any supervision?

Lew subpoena link here.

And where it gets fun is reading through the slides that have been prepared as part of the production for current and future testimony... and believe us, there will be much more future testimony, as republicans have smelled blood shooting straight out of a punctured artery and are now circling around a president who probably doesn't even realize the danger he is in...

Full slidedeck:

 

Combing through some of the production is the fact that the OMB knew precisely and to the dot, way back in August 2009 when Solyndra would run out of cash. From August 19, 2009: "While debt coverage is robust under stress conditions, the project cash balance goes to $62,000.00 in September 2011. Under the assumption that a small amount of cash is tied up in working capital, the project will face a funding shortfall." Also, the fact that the OMB was looking at a shell company that had absolutely no working capital should probably have set off a few alarms: from the same email - "I'm concerned that we still have a major outstanding issue. The attached model represents the Base Case that was utilized by Fitch and the project team. In this version, all working capital assumptions were eliminated, suggesting that Fab2 will hold no A/R, inventory or A/P balances... The issue of working capital assumptions has been a major issue repeatedly raised since December. Furthermore, the assumption of no working capital at the project company is inconsistent with the model we looked at just yesterday and the project team "due diligence update.... In addition to the critical issue above, we have a number of other modeling issues that need to be addressed. For example, as stated yesterday, property taxes don't seem to appear in the model..." Sigh. Only in America...

But where it gets downright surreal, is that as we reported previously Imperial Capital has been retained at a $150K/month fee, and seeks to collect a $1 million success and $1 million sale fee (all expenses paid of course, and since they are comped by the taxpayer- they are uncapped: a first in a bankruptcy advisor engagement letter), in order to.... liquidate the company.  To wit from an August 27 2009 email exchange:

August 279, 2009, 3:10 pm

The credit subsidy model that OMB approved last October for the Title XVII loan guarantee program assumed a workout scenario for recoveries. However, we made it clear to DOE that decision as to whether work out or liquidation should be assumed in the model for specific cases, would be made on a case by case basis. Given the time pressure we are under to sign-off on Solyndra, we do't have time to change the model to assume liquidation.

Reply -> August 27, 2009, 4:20 pm

So we know what to say if asked, what are the arguments for assuming a workout vs. liquidation?

Reply -> August 27, 2009, 4:31 pm

We don't know. I would assume that usually one would assume liquidation. (And in fact the first credit assessment that Fitch did, coincidentally for Solyndra stated that as a startup, Fitch would assume liquidation).... We essentially kicked the can down the road, and then Fitch rode to our rescue by stating that as a startup assumes liquidation.

Something tells us that the judge overseeing the Solyndra Bankruptcy case will be happy to hear that the one possible outcome for the company is a liquidation. If after this Imperial still continues to collect $150,000 a month for over a year as it liquidates a company, a process that adds no value to the estate and can be done for pennies on the dollar by MBA grads, then surely someone else has ridden to their particular top line rescue.

There is much more in the docs entered into the record (link). And there will be much more when Lew testifies and brings the whole can of worms of OMB's corrupt business practices (ignoring their horrendous excel track record) into the open.

Just how much credibility will anything coming out of the OMB, the organization that is supposedly in charge of quantifying the cost-benefit analysis of America's near brush with austerity and forecasting the consequences of Obama's fiscal decisions, after the Congressional theater is fully done crucifying him? And by implication, the entire administration?

h/t John Poehling

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 09/19/2011 - 22:35 | 1687194 Libertarians fo...
Libertarians for Prosperity's picture

 

 

Forget Solyndra!  Our politicians are struggling!  

I was having some difficulty understanding why Obamanomics was going to destroy small businesses and lead to more unemployment until I listened to Republican senator John Fleming this morning.  In a MSNBC interview, he was complaining that his Subway sandwich shops only pay him about $600,000 in annual income.  After he pays all his bills and feeds his family, he only has about $400,000 left to invest in equipment, expansion and other opportunities.  

http://www.youtube.com/watch?v=HW2VW-Z1M94

This is outrageous!  I'm going to be setting up a website to help our politicians through this difficult time in our nation's history. I rarely ask for donations, but if you could spare a little change from what's left of your paycheck, I'm sure our representatives would be endlessly grateful. 

Many thanks....

 

Mon, 09/19/2011 - 22:44 | 1687208 nope-1004
nope-1004's picture

Obama lied about what he would do when in office, now suspicion surrounds him with respect to financial favors?  (ie. elitist back-slapping?)

So.... is he a banker?  Must be.

Aaaaaaaaaaaaaaaaaaaaaaaaand...................... it's gone!

(our tax dollars, that is)

 

Mon, 09/19/2011 - 22:50 | 1687233 X.inf.capt
X.inf.capt's picture

im sorry, but this hunt is a smokescreen for something....but for what?

Tue, 09/20/2011 - 00:55 | 1687647 Bruce Flea
Bruce Flea's picture

More likely, Obama didn't know what he was getting in to in the first place, and has been played like the proverbial fiddle being sat up to take the fall from all sides.

That's a tough chair to sit in no matter who you are. There's a reason no one smart enough to do it, ever wants the job.

 

Mon, 09/19/2011 - 22:52 | 1687227 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Maybe if we went back to the Constitution and made corporations rewrite their charters every seven years we would not have to deal with bullshit fascist oligarchs, then, would we?

Mon, 09/19/2011 - 22:55 | 1687242 DoChenRollingBearing
DoChenRollingBearing's picture

@ Libertarians fo...

Have you ever given someone a job?  Or invested in equipment or other opportunities?

I started two small businesses and co-founded a third.  They ALL FAILED (for various reasons, including my incompetence).  I lost money...  But, I helped employ a couple of other people for a while.  It was my FOURTH business that was the charm: our business in PERU, founded with my in-laws there.  Finally, a business that is working out, although it took us 10 years to get to a positive Retained Earnings.

You provide no context for Fleming's wealth.

- 1, red for you.

Mon, 09/19/2011 - 23:30 | 1687371 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I gave him one too, which means most people have stopped reading his posts.  Smart.

Tue, 09/20/2011 - 00:38 | 1687623 fuu
fuu's picture

People still read his posts? I just junk the smiley on principle alone now. He had some funny moments as Redneck Repugnicant once upon a time, until the ban. Now he is just too bitter to get it right.

Tue, 09/20/2011 - 01:07 | 1687669 DoChenRollingBearing
DoChenRollingBearing's picture

Ahh...  So that's who he is.  Explains a lot.  Thanks for letting us know.

Tue, 09/20/2011 - 06:34 | 1687960 Dangertime
Dangertime's picture

You are right.  Let's just confiscate the wealth of whoever has it.

Long live freedom!!!!!

Mon, 09/19/2011 - 22:34 | 1687196 buzzsaw99
buzzsaw99's picture

That's racist.

Mon, 09/19/2011 - 22:43 | 1687218 Muddy1
Muddy1's picture

What did Obama know and when did he know it?  Oh, sorry, I slipped back to the days of the Watergate hearings on TV.

Mon, 09/19/2011 - 22:47 | 1687225 narnia
narnia's picture

any idea who executed the document subordinating the taxpayer's interest in this boondoggle?  

Mon, 09/19/2011 - 22:50 | 1687230 ISEEIT
ISEEIT's picture

Don't get too excited. The Corporate press will minimize this. They have selected their guy. Obama and his band of tools will be treated like the retard who gets an award for 'best effort'. The more silly of you you will jump to the assumption that I am a heartless Conservative who is picking on retards. Maybe even an Ayn Rand fan. So I'm a little bit of each but my point  is that cheerleading the leftist black guy hurts our ENTIRE society. The retard fans get hurt, the Leftist get hurt. Normal people get hurt. When the country allows for emotion to trump reality, WE ALL GET HURT.

Puting the retard in charge felt real good. Now what do we do? This guy couldn't run a Mcdonald's and yet he now runs a nation. WTF?

Mon, 09/19/2011 - 22:51 | 1687236 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I would say 'Whatever gets Obama out of office' but then we would have  Biden.  Ugh, it has been tweedle dee and tweedle dum in the WH for how long now?  Seems like forever.....

Mon, 09/19/2011 - 23:06 | 1687268 Ima anal sphincter
Ima anal sphincter's picture

I'm tired of getting my head kicked.......time to stand up. Maybe......."take it back."

 

KTB

Mon, 09/19/2011 - 23:12 | 1687295 pain_and_soros
pain_and_soros's picture

Obama can genuinely plead ignorance - he only knows what he reads from a teleprompter, but even that is forgotten by the end of the day....

A clueless, compromised & corrupted community organizer aka POTUS.  what a farce the US has become.

Mon, 09/19/2011 - 23:15 | 1687310 Yen Cross
Yen Cross's picture

  Some (Eric Holder) Termite is trying to save face?   After ( FAST & FURIOUS) ? 

 

            SARC/ (:

Mon, 09/19/2011 - 23:17 | 1687311 SqueekyFromm
SqueekyFromm's picture

Q: "Why Was Congress Forced To Subpoena Head Of Obama's Budget Office To Get Info On Solyndra?"

A: Hmmmm. This is a example of NEO-Transparency which exists on a continuum and ranges from Clear to Opaque. This concept was pioneered by none other than Mark Twain, who noticed the Quantum Aspects of muddy water, wherein one could take a muddy river that you couldn't see through, and then scoop it out one glass at a time, and never come across a muddy glass of water. 

Later, Heisenburg and some physicists at Copenhagen, noticed the same thing occurred with snuff. Whereas one could sniff a whole jar of snuff and not get sneezy, but just put a little dab in your nose and whew!!! This in turn led to the Copenhagen Interpretation which allows you wiggle room when things are not up to snuff.

Squeeky Fromm, Girl Reporter

Mon, 09/19/2011 - 23:18 | 1687317 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Are you the sister of the stick figure with the boner? 

Mon, 09/19/2011 - 23:53 | 1687470 Uncle Remus
Uncle Remus's picture

Hmmmm.

Mon, 09/19/2011 - 23:44 | 1687430 DoChenRollingBearing
DoChenRollingBearing's picture

Well that was a strange but nice comment, Squeeky!  Green for you!  Tell your editor I said so.

Mon, 09/19/2011 - 23:17 | 1687314 delacroix
delacroix's picture

KTB ?     kill the bastard ?

Mon, 09/19/2011 - 23:19 | 1687321 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The dudes at your door wearing sunglasses are not delivering a pizza.

Mon, 09/19/2011 - 23:56 | 1687486 Uncle Remus
Uncle Remus's picture

Why yes, they're all loaded. Why do you ask?

Tue, 09/20/2011 - 00:07 | 1687534 Ima anal sphincter
Ima anal sphincter's picture

bankers

Mon, 09/19/2011 - 23:18 | 1687320 digalert
digalert's picture

Remember Bernie Maddoff?

A distraction to please the serfs.

Wonder if this SolarGate is stage show for what's behind the curtain. Something bigger, much bigger. Billions in grift all under the watchful eye of bureaucrat thieves with WH stamp of approval.

Mon, 09/19/2011 - 23:29 | 1687364 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Do not look behind the curtain!  It is the great and powerful.....lizard headed....fire breathing....all knowing....big tittied.....uzi holding.....thing!

Mon, 09/19/2011 - 23:46 | 1687442 DoChenRollingBearing
DoChenRollingBearing's picture

Yes!  Something is rotten backstage.  We will likely see some of this before long.  

In the meantime: gold and silver will help you through, they will help you worry less about the nasty things behind the curtain.

Tue, 09/20/2011 - 01:00 | 1687653 Bruce Flea
Bruce Flea's picture

Only if you have it in your hand.  Don't trust the paper saying you own it...

Mon, 09/19/2011 - 23:57 | 1687491 Uncle Remus
Uncle Remus's picture

Wait - is that a shower curtain?

Tue, 09/20/2011 - 00:40 | 1687624 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The solar shower ain't workin'!  There is a dirty Wizard about!

Mon, 09/19/2011 - 23:22 | 1687337 sitenine
sitenine's picture

For the acronym challenged:
OMB = Office of Management and Budget

Mon, 09/19/2011 - 23:48 | 1687447 DoChenRollingBearing
DoChenRollingBearing's picture

Oh, I thought it was Office of Management and Bitchez.  Thanks for clearing that up.  ;-)

Tue, 09/20/2011 - 00:44 | 1687635 OldPhart
OldPhart's picture

It's Orifice Made Bigger

Mon, 09/19/2011 - 23:24 | 1687345 imapopulistnow
imapopulistnow's picture

I suppose if one has absolute contempt for business it is not difficult to rationalize sending money to one's cronys instead.  "It isn't criminal, it's progressivism."  We are so screwed.

Tue, 09/20/2011 - 00:13 | 1687557 Cardinal Fang
Cardinal Fang's picture

I think it is funny that the Obama Administration would buck the recommendations of the DOE, They have all them thar supercomputers and such at Los Alamos and Livermore and all. There musta been some all powerful mojo comin' down hill to override those projections. You really have to wonder at that. For the government to believe some entrepeneur's scratch on the back of a napkin over some Federally empowered bean counter with access to all of the computing power of the entire Western Hemisphere. I'm sorry, but that's just dumb.

Tue, 09/20/2011 - 03:22 | 1687813 DosZap
Tue, 09/20/2011 - 06:20 | 1687946 gwar5
gwar5's picture

More government control of the economy = control of the masses. The cronyism and central planning gives government control over business. Extortion and pay to play. Has nothing to do with the idealistic rhetoric. All lies and fascism with no free markets.

The current regime is just way worse than the previous and counts on the MSM to cover for them. The corporate MSM conglomerates, with significant ownership by the squids, are counting on $60 Billion/year in taxpayer subsidies in the future (if Obama survives) in exchange for continued favorable propaganda.  Doesn't look like it's going to help.

Tue, 09/20/2011 - 06:59 | 1687975 No Mas
No Mas's picture

Not sure if people need to be reminded that this is pretty much like the foreclosure fraud issue. 

Listen closely; NOTHING IS GOING TO HAPPEN!

There will be a lower level guy whose head will roll but NO ONE of any importance will have a problem.  BHO will be fine.  There will be lawyers making a lot of money, politicians will manage to fund raise off of this, but there will be no justice.

So, get over the dreams of justice and payback.  It is not going to happen.  ZH will run article after article on the subject and people will vent and nothing will change.

Why?  Simple.  The people who investigate the foreclosure fraud, the financial fraud and the political fraud are the same people who commit the foreclosure fraud, the financial fraud and the political fraud; only the names are changed.

And the american voter is, and I mean this in a literal sense, as dumb as a bag of rocks and cares nothing about these things.  They care to be entertained and provided with "jobs."

So, expect more of the same.  Wash, rinse and repeat.  I guess one day it will come crashing down but I doubt any of us will still be posting on ZH by the time that happens.

Tue, 09/20/2011 - 07:30 | 1688004 Thievery Corporation
Thievery Corporation's picture

Amateurs. The bankers are the pros.

Tue, 09/20/2011 - 08:26 | 1688149 SofaPapa
SofaPapa's picture

It's so pathetic.  All I can do is laugh.  What else is there to do?

Do NOT follow this link or you will be banned from the site!