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White House Knew Solyndra Investment Risks

by Keith Koffler on October 3, 2011, 4:15 pm

Senior White House officials understood the risks of committing taxpayer dollars to  Solyndra but proceeded anyway, according to internal Obama administration email transcripts released today.

Quotes from the emails are included in a story this afternoon by POLITICO, which obtained the documents from House Democrats, who argued that there were “no smoking guns” among the emails.

But the missives offer a sense of the willingness of White House officials to play loose with taxpayer dollars even as deficits were skyrocketing, the economy was wilting, and President Obama was trying to pass a nearly $1 trillion overhaul of the health care system.

In a Christmastime 2009 email exchange with Brad Jones of Redpoint Ventures, an investment firm with financial connections to Solyndra, then-National Economic Council Director Larry Summers acknowledged that the government was a lousy instrument for picking successful companies to invest in.

“The allocation of spending to clean energy is haphazard; the government is just not well-equipped to decide which companies should get the money and how much,” Jones wrote. “One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million; while that is good for us, I can’t imagine it’s a good way for the government to use taxpayer money.”

Summers replied on Dec. 26: “I relate well to your view that gov is a crappy vc [venture capitalist] and if u were closer to it you’d feel more strongly. But suppose we think there are all kinds of externalities to renewable investments. What should we do?”

The reference to a government loan of $580 million appears to refer to the Solyndra guarantee, though the number is in error. Solyndra received $535 million.

In a spring 2010 email exchange with White House senior adviser Valerie Jarrett discussing whether concerns over Solyndra’s finances should preclude a visit to the company President Obama – which he eventually made – Vice President Biden’s Chief of Staff Ron Klain suggested the White House well understood that fair percentage of the investments made in green projects would be sent down a rathole.

“The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012 — but that to me is the reality of saying that we want to help promote cutting edge, new economy industries.”

Jarrett had been warned by California venture capitalist Steve Westly, who raised more than $500,000 for Obama and was on a high-level DOE volunteer advisory panel on energy issues, that Solyndra was trouble.

“A number of us are concerned that the president is visiting Solyndra,” Westly wrote White House senior adviser Valerie Jarrett on May 24, 2010. “[T]here is an increasing concern about the company because their auditors, Coopers and Lybrand, have issued a ‘going concern’ letter. … Many of us believe the company’s cost structure will make it difficult for them to survive long term.”

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srdem65 October 3, 2011 at 4:43 pm

I seem to recall that at the time of this loan proposal, MrEmanuel was playing forest ranger and trying to stamp out raging fires of enthusiasm and foolishness of the newly elected administration wherein they thought they could pass any bill or spend any amount of money on anything they wanted without any interference from those pesky Repubs. Banking on the support and silence of the MSM, they went headfirst into the healthcare act, the stimulus and now it appears that they were “rewarding” their friends with taxpayer backed loans.

Even as more and more information on the shaky financial prospects of these patronized companies comes to light, the DOE is STILL passing out loans and grants .

There’s no one to stop them. No one to call them to account because of the majority the Dems hold in the Senate and the highly politicized DOJ.
We can hold our breath waiting for the MSM to investigate but all that will happen is that we turn blue.
The only way the whole truth will emerge is when a competing company that was denied the same bite at the taxpayers money apple files a lawsuit claiming discrimination or worse.

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BeeCee October 3, 2011 at 5:46 pm

Couldn’t agree more as to a competitor filing suit, litigating. Maybe we’ll see some honest ‘political forensics’.

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Janna October 3, 2011 at 8:45 pm

Never….they will end up dead.

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Star October 3, 2011 at 5:37 pm

Summers was such a genius–men understood such things, women didn’t–blah blah. What a joke. What are “externalities”? Unrelated things like wanting to prop up your friends?

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Keith Koffler October 3, 2011 at 9:28 pm

Star – I agree – “All kinds of externalities” sounded a lot like more than benefits to the environment to me.

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Star October 4, 2011 at 10:53 am

“The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012 — but that to me is the reality of saying that we want to help promote cutting edge, new economy industries.”

Also–Our Gal Val seems to be saying that tanking if a sign of cutting-edgeness.

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Susan October 3, 2011 at 5:53 pm

Great detective work Keith. All I can say is wow. Our tax dollars are being flushed down the toilet with so little disregard. Where was Obama on all this? He was probably off watching ESPN or shooting hoops with Reggie Love while Valerie Jarrett plays venture capitalist with the public treasury.

I agree with srdem. There is no one to stop them. There is not much we can do about it but contact our representatives, and I’ve done that…repeatedly. The deck is stacked against all of us who don’t belong to the DC clique.

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Susan October 3, 2011 at 8:30 pm

Correction: Our tax dollars are being flushed down the toilet with so little regard. Sometimes my mind gets ahead of my fingers.

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Keith Koffler October 3, 2011 at 9:30 pm

They framed this as investing to ensure that such a recession never happens again, but it was just throwing money at stuff they liked.

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Lizzy October 3, 2011 at 6:27 pm

These sixties wannabe’s are playing with our country like we were a very large petri dish for their grand experiment. They treat our money like Monopoly money it has no meaning or consequence for them. As seen being flagrantly thrown in our faces by Barak & Michelle Obama. They play us all for fools and we are starting to see European style riots in our streets.
We are treading in dangerous territory with no checks and balances and a
DOE and DOJ as willing participants. Come on GOP stand up where are the
brave souls who will put country above self? Where are you?

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Just2old October 3, 2011 at 7:44 pm

They’re on the way. Hopefully, they’ll get there in time! We pray they will.

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Keith Koffler October 3, 2011 at 9:31 pm

Great point Lizzy – it’s only occurred to them to worry about spending and the deficit as they realize that’s what’s on the country’s mind and Election Day is coming.

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Knothead October 3, 2011 at 9:00 pm

I am realisticly thinking this admit NOTHING astration is loaded with fools led by a modern day Prince of Thieves. Honestly does the President still believe the majority still regard him as their hero or are they to intimadated to say this President is a failure as an American and even as a human being..
sighed then signed,
KNOTHEAD (address unknown)

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Knothead October 3, 2011 at 10:45 pm

I wonder what the inside of an Obama political prison would look like. With my last post I just may find out if current trends continue.

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Star October 4, 2011 at 10:54 am

Then we will all get to meet.

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anneinarkansas October 4, 2011 at 11:22 am

They all knew is was not a winner and they did not care.
I could not believe that Obama said that hindsight is 20/20
Lame excuse for failure and worse.

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