Solyndra misrepresented facts to get loan guarantee, report says
WASHINGTON – A four-year investigation has concluded that officials of the solar company Solyndra misrepresented facts and omitted key information in their efforts to get a $535 million loan guarantee from the federal government.
Solyndra was the first company to get federal loan guarantees under a program created in 2005 and expanded by President Barack Obama’s 2009 economic stimulus package.
The company’s failure soon after receiving the loan guarantee likely will cost taxpayers more than $500 million. Republicans and other critics cite it as an example of wasteful spending under the stimulus program.
The report by the Energy Department’s inspector general was released Wednesday. It’s designed to provide federal officials with lessons learned as it proceeds to grant billions of dollars in additional loan guarantees. The inspector general found fault with the department, describing its due diligence work as “less than fully effective.” The report also said department employees felt tremendous pressure to process loan guarantee applications.
In the end, however, the inspector general said the actions of the Solyndra officials “were at the heart of this matter.”
“In our view, the investigative record suggests that the actions of certain Solyndra officials were, at best, reckless and irresponsible or, at worst, an orchestrated effort to knowingly and intentionally deceive and mislead the department,” the IG’s report said.
The federal loan guarantee program for energy projects was established under President George W. Bush’s administration. After it was expanded by the 2009 stimulus law, the department disbursed more than $500 million to Solyndra. Obama personally visited the plant in 2010 to cite it as an example of economic progress stemming from the Democratic-led stimulus bill.
But in September 2011, the company laid off 1,100 employees, ceased operations and filed for bankruptcy protection.
Miles Ehrlich, counsel for the company’s former CEO, Chris Gronet, disputed the findings. “Solyndra executives were completely truthful and accurate in their representations during this loan process, and the DOE was never misled about Solyndra’s business or prospects,” Ehrlich said in a statement provided by his law office.
Ehrlich said the real cause of Solyndra’s failure had nothing to do with fraud, but was caused by the unexpected dumping of solar panels subsidized by China’s government.