[Waynno]

WASHINGTON — The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.

Obama admin reworked Solyndra loan to favor donor *| ajc.com

By MATTHEW DALY
The Associated Press

WASHINGTON — The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.


FILE - In this Aug. 31, 2011, file photo, Solyndra workers leave Solyndra in Fremont, Calif. Newly released emails show that the Obama administration was worried about the financial health of a troubled solar energy company even as officials publicly declared the company in good shape. An email from a White House budget official to a co-worker discussed the likely effect of a default by Solyndra Inc. on President Barack Obama’s re-election campaign. (AP Photo/Paul Sakuma, File)
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Even with the federal help, Solyndra filed for Chapter 11 bankruptcy protection earlier this month and laid off its 1,100 employees.

The Fremont, Calif.-based company was the first renewable-energy company to receive a loan guarantee under a stimulus-law program to encourage green energy and was frequently touted by the Obama administration as a model. Obama visited the company's Silicon Valley headquarters last year, and Vice President Joe Biden spoke by satellite at its groundbreaking.

Since then, the implosion of the company and revelations that the administration hurried Office of Management and Budget officials to finish their review of the loan in time for the September 2009 groundbreaking has become an embarrassment for Obama as he sells his new job-creation program around the country.

An Associated Press review of regulatory filings shows that Solyndra was hemorrhaging hundreds of millions of dollars for years before the Obama administration signed off on the original $535 million loan guarantee in September 2009. The company eventually got $528 million.

Given the company's shaky financial condition, Republican lawmakers say the decision to restructure the loan raises questions about whether the administration protected political supporters at taxpayers' expense.

"You should have protected the taxpayers and made some forceful actions here after this analysis," Rep. Cliff Stearns, R-Fla., told a top Energy Department official this week. "Because you should have seen the problems. And you should have said, 'Taxpayers need to be protected and this has got to stop.' "

The loan restructuring is one element congressional investigators are focusing on as they look into the federal loan guarantee Solyndra received under the economic stimulus law.

Under terms of the February loan restructuring, two private investors — Argonaut Ventures I LLC and Madrone Partners LP — stand to be repaid before the U.S. government if the solar company is liquidated. The two firms gave the company a total of $69 million in emergency loans. The loans are the only portion of their investments that have repayment priority above the U.S. government.

Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. The foundation is headed by billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama's 2008 campaign, federal election records show. Kaiser has made at least 16 visits to the president's aides since 2009, according to White House visitor logs.

Madrone Partners is affiliated with the Walton family, descendants of Wal-Mart founder Sam Walton. Rob Walton, the eldest son of Sam Walton, contributed $2,500 last year to the National Republican Congressional Committee.

The AP review also found that officials at Solyndra had been seeking a second round of loans from the Energy Department to expand the company's Silicon Valley headquarters. The request for a second loan was denied.

"We have incurred significant net losses since our inception, including a net loss of $114.1 million in 2007, $232.1 million in 2008 and $119.8 million in the first nine months of fiscal 2009, and we had an accumulated deficit of $505 million at Oct. 3, 2009," the company said in a December 2009 filing to the SEC. "We expect to continue to incur significant operating and net losses and negative cash flow from operations for the foreseeable future."

Energy Department spokesman Damien LaVera said Friday that the company's financial losses were not uncommon for a high-tech startup and were a major reason Solyndra applied for the federal loan. The loan program is intended to help promising companies that cannot receive financing through private banks because of high risk.

Jonathan Silver, executive director of the Energy Department's loan program, said DOE officials faced a stark choice late last year and early this year: Refuse to allow the loan restructuring, "thereby ensuring that Solyndra would close its doors immediately" or allow the company to accept emergency financing, "thereby giving it and its almost 1,000 workers a fighting chance at success, and the government a higher expected recovery on its loan."

The decision by Energy Secretary Steven Chu was not an easy one, Silver told the House Energy and Commerce Committee, but appeared to be the right action at the time.

"Without DOE's agreement to restructure Solyndra's loan, the company likely would have faced bankruptcy much earlier — in December 2010" or soon after, Silver said. "Restructuring gave them a fighting chance to compete and succeed, and kept approximately 1,000 workers from losing their jobs."

Republicans were not impressed.

"If their model was weak to begin with, and then the market gets worse, doesn't that mean that maybe we should have just not thrown good money after bad?" asked Rep. Morgan Griffith, R-Va. "Because now we're in a worse position in the bankruptcy courts to get our money back."

GOP presidential candidate Michele Bachmann called the Solyndra loan an example of "crony capitalism" that benefited political donors.

"It's wrong to abuse executive authority with unilateral actions" Bachmann said at a campaign event Friday in California. "And of course the other problem with Solyndra is the fact that it appears there was crony capitalism, that there were political donors that benefited by this $535 million loan."

Newly released emails show the White House was worried about the likely effect of a default by Solyndra on Obama's re-election campaign.

"The optics of a Solyndra default will be bad," an OMB official wrote in a Jan. 31 email to a colleague. "The timing will likely coincide with the 2012 campaign season heating up."

The budget official, whose name is blacked out in the email, wondered whether Solyndra should be allowed to restructure its loan.

"Questions 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 supporting innovative technologies), but twice (which could easily be portrayed as bad judgment, or worse)," the email says.

Associated Press writer Gillian Flaccus in Costa Mesa, Calif., contributed to this story.

Follow Jack Gillum at Jack Gillum (@jackgillum) on Twitter and Matthew Daly at Matthew Daly (@MatthewDalyWDC) on Twitter

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More on Legislation in California, I happen to be an outdoor enthusiast

I am very concerned about how all this effects our tourism and recreation
access to public lands,... Lands that belong to you and me, the public

Sooner or later the entire nation will be facing these issues, not only California

CALIFORNIA LEGISLATION: RENEWABLE ENERGY DEVELOPMENT

A number of renewable energy bills are being considered that could have a significant impact on access to public lands, particularly in the Southern California desert region. Many, of these lands currently support a diverse range of outdoor recreation activities, including non-motorized and motorized uses. Visitors include OHV recreationists, campers, hikers, gem and mineral collectors, photographers, wildlife viewers, and many others.

The following bills are currently pending or were recently approved by the Governor.

ABX1 13: Energy: renewable resources: endangered species: environmental impact reports (Pérez-D)
Status: 8/29/2011 – Approved by the Governor. Chaptered by Secretary of State.

Summary: ABX1 13 expands existing siting and permitting provisions for renewable energy projects enacted to facilitate permitting of solar energy projects in a specified desert region, to include a broader range of renewable energy projects in the desert and, for specified provisions, other regions of the state. The bill establishes new provisions to govern review of renewable energy projects under the California Environmental Quality Act (CEQA) and to support planning and permitting of renewable energy projects in the San Joaquin Valley. The bill directs the Department of Fish and Game to develop a Natural Communities Conservation Plan for renewable energy in the San Joaquin Valley and requires the California Energy Commission to provide grants to local governments for renewable energy planning efforts.


AB 982: Energy: Land exchange for renewable energy-related projects (Skinner-D)
Status: 9/16/2011 - This bill was approved by both houses. The bill was enrolled and presented to the Governor on 9/16/2011.
Summary: AB 982 requires the State Lands Commission (SLC) to enter into a memorandum of agreement (MOA) by April 1, 2012, with the United States Secretary of the Interior to facilitate land exchanges that consolidate state "school lands" in the California desert into contiguous holdings that are suitable for large-scale renewable energy-related projects. The bill requires SLC to submit a land exchange proposal within 240 days of the execution of the MOA.

SB 618: Local Government: Solar Use Easement (Wolk-D)
Status: 9/16/2011 – This bill was approved by both houses. The bill was enrolled and presented to the Governor on 9/16/2011.
Summary: This bill would allow local governments and landowners to mutually rescind a Williamson Act contract on marginally productive or physically impaired land and simultaneously entered into a solar-use easement. The Williamson Act provides landowners with lower property tax assessments in return for a ten-year commitment to use land for only agricultural or open use purposes. The solar-use easement would require that the land be used for solar photovoltaic facilities under similar terms of a Williamson Act contract. The bill would also require any lead or responsible agency to expedite its review of permits for solar photovoltaic facilities that are located on marginally productive, physically impaired, or disturbed land, as defined in the bill.

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