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Becky Bowers
By Becky Bowers November 15, 2011

Solyndra ad claims President Barack Obama gave taxpayer money to help his campaign donors at failed solar company

A new TV ad airing in Florida and other states portrays President Barack Obama as a politician who showered millions of taxpayer dollars on "his friends at Solyndra," a once-hot solar company now in bankruptcy court.

Americans for Prosperity, a group that works closely with tea party activists and has been funded by the conservative Koch family, released the ad, which uses news clips and e-mail snippets to support an ominous voiceover:

"Wealthy donors with ties to Solyndra give Obama hundreds of thousands of dollars.

"What does Obama give them in return? Half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy. But loaned them the money anyway.

"And when the government found out that Solyndra couldn't make its payments, the administration changed the terms of the loan to let Solyndra continue taking taxpayer money.

"Now, Solyndra's bankrupt, and taxpayers are stuck with the bill. What's worse? The Obama administration has just approved another billion dollars in loans to solar companies who also donated money to Democrats.

"Risking billions of taxpayer dollars to help his political donors — is this the change we're supposed to believe in?"

We decided to fact-check the ad, focusing on whether the president gave "half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy."

Rise and fall of a solar panel company

Solyndra, based in Silicon Valley, formed in 2005 with a blockbuster idea: a unique type of solar cell, cylinders that didn't require pricey silicon, which promised to make them cheaper than their rivals. 

In 2006, the U.S. Department of Energy invited the company to apply for a new loan guarantee program, a program created with the support of a majority of Republicans, who controlled Congress at the time. 

The company's December 2006 pre-application was enough to vault it into a group of 16 applicants invited to submit full applications in 2007. By early January 2009, Solyndra's file had been reviewed by the department's credit committee and returned with a request for further analysis. On Jan. 15, the loan program office said "due diligence" for the Solyndra loan was scheduled to be complete by March 2009. The money was going to build a gleaming new factory in Fremont, Calif.

Obama took office Jan. 20, 2009, and one of his first legislative achievements was a major economic stimulus package. The administration pushed to finish the $535 million loan for Solyndra so it could tout the company as a poster child of the stimulus — construction jobs plus a boost to American green energy. Solyndra got the loan Sept. 3, 2009. 

As recently as 2010, the company was hailed as a Silicon Valley superstar, ranked a top clean-tech company by the Wall Street Journal and one of the "World's 50 Most Innovative Companies" by a Massachusetts Institute of Technology magazine.

But subsidized Chinese solar panels got even cheaper as the price of silicon plummeted — along with Solyndra's chances for becoming profitable. Red flags multiplied by February 2011, and the government restructured the loan to rescue the factory project.

Still, Solyndra collapsed spectacularly in August 2011. Factory employees who worked late the night before, as they often did, found their jobs had evaporated the following morning — with no notice and no severance. An FBI raid followed. Solyndra filed for Chapter 11 bankruptcy protection on Sept. 6, 2011. 

Solyndra had fallen far and fast. Its unique solar cells had once attracted more than $1 billion from private investors. Now taxpayers could lose hundreds of millions of dollars.

Friends of Barack?

The Americans for Prosperity ad says Obama helped "his friends at Solyndra." So, who owns Solyndra?

Four venture capital firms own nearly 70 percent of the company, according to bankruptcy filings. Argonaut Ventures owns the largest stake, with nearly 40 percent, while Madrone Partners own 13 percent. Two others own about 9 percent and 7 percent. 

Who was the ad talking about? The ad's fine print refers to a Daily Caller article headlined "Bankrupt solar company with fed backing has cozy ties to Obama admin." 

The story focused on "shareholders and executives" of Solyndra who "fundraised for and donated to the Obama administration to the tune of hundreds of thousands of dollars." The largest contributor listed in the story: George Kaiser, who raised $50,000 to $100,000 for Obama's campaign. (For a little context, in the big-money world of presidential fundraising, he's among 560 elite fundraisers for Obama, though not in the top tier who gathered upwards of half a million each.)

Kaiser, though, is neither a shareholder nor an executive of Solyndra. The Tulsa, Okla., oil billionaire is the donor behind the George Kaiser Family Foundation. The foundation focuses on poverty, community health, civic enhancement — and national energy policy. (Its National Energy Policy Institute is "an effort to establish a rational energy policy that will effectively reduce U.S. dependence on foreign oil.") The foundation, rather than hire an outside financial adviser to handle its investments, does it mostly in-house, through a subsidiary. That subsidiary is Argonaut Ventures, the largest investor in Solyndra. 

Kaiser isn't on the foundation's board or Argonaut's or Solyndra's. (And for the record, his foundation is unrelated to the Henry J. Kaiser Family Foundation, which focuses on the health care system and national health care reform.)

It's important to note here that Kaiser was never in a position to profit from Solyndra — his contributions to his foundation are "irretractable."

"He could not withdraw money from the foundation for his private use," said C. Renzi Stone, a spokesman for the foundation. "So that money is there forever. ... The investment in Solyndra would not have benefited Mr. Kaiser personally in any way."

A handful of other executives affiliated with Solyndra's management and board donated to the Obama campaign or other Democrats over the years, according to the Daily Caller story. But others didn't reach the level of Kaiser's fundraising — which Stone said could be traced to a single fundraiser at Kaiser's Tulsa home in 2007. 

Meanwhile, Madrone Partners, which owns more than 10 percent of Solyndra, is an investment vehicle for another family — the Waltons of Walmart fame. While some argue that Walmart is no longer a conservative company that focuses solely on GOP causes, a search of Federal Election Commission records for contributions from people who list Madrone as an employer still shows most cash benefited GOP recipients. General partner Gregory Penner, for example, a Walton in-law, gave primarily to Republicans, such as $5,000 to the Senate Conservatives Fund, $10,000 to the Republican Party of Kentucky and $10,000 to McCain Victory 2008. He also made smaller contributions to a handful of Democrats such as U.S. Sen. Ben Nelson of Nebraska.

House Republicans investigate

The Republican-controlled House Energy and Commerce Committee has been investigating since February 2011 how close ties may have been between Solyndra and the Obama administration. Its Oversight and Investigations Subcommittee held hearings in July, September and October, and has been collecting documents and correspondence, including from the White House.

So far, the subcommittee's work has generated more than 85,000 pages of documents, according to the White House

The committee members have pointed to e-mails that show the Obama administration was eager to confirm Solyndra's loan so the president and vice president could tout it as a stimulus success story. "Can you confirm whether there are any issues regarding a closing on Sept. 3 for a Sept. 4 VP event on Solyndra? This implies we will need to wrap up our review/approval by Sept. 1," said one Energy Department e-mail from late August.

Other e-mail shows that Steve Mitchell, Argonaut's managing director who also served on Solyndra's board, and Ken Levit, the executive director of the George Kaiser Family Foundation, exchanged messages with George Kaiser about Solyndra and the White House.

Kaiser visited Obama's White House at least 16 times to chat about energy policy, according to the Daily Caller and Tulsa World, but the foundation told reporters that Solyndra's loan never came up. 

Spokesman Stone repeated in November: "To reaffirm our previous public statements, George Kaiser had no discussions with the government regarding the loan to Solyndra."

But messages released by House Republicans on Nov. 9, 2011 include this one from Kaiser to Mitchell, copied to Levit:

"A couple of weeks ago when Ken and I were visited with a group of administration folks in D.C. who are in charge of the stimulus process (White House, not DOE) and Solyndra came up, every one of them responded simultaneously about their thorough knowledge of the Solyndra story, suggesting it was one of their prime poster children," Kaiser wrote in March 2010.

Did they talk about the loan? It's not clear.

Meanwhile, in the same batch of e-mails, they discuss that they don't expect to leverage their White House relationships for special treatment.  Mitchell noted to Kaiser and Levit, "I think the company is hoping that we have some unnatural relationship that can open bigger doors — I've cautioned them that no one really has those relationships anymore."

The path to bankruptcy

So did the administration know Solyndra was "on the path to bankruptcy"? 

The ad suggests that the Energy Department thought Solyndra would run short on cash as it built its new factory but approved the loan anyway, pointing to e-mail messages released by the House subcommittee. Those messages, written in August 2009 as the department was drafting the final loan terms, got into details about the project's "cash balance" and "working capital requirements." The loan guarantee was formally issued on Sept. 3, 2009.

House Democrats responded to this idea in September, saying that "a career agency official who served in the Bush administration" had responded to the concern raised on those messages. That official's e-mail, also from August, said that equity investors, who had already pumped over $1 billion into the company, wouldn't let a short-term cash crunch keep Solyndra from finishing its project.

And in fact when Solyndra later restructured its Energy Department loan, private investors did throw in $75 million to keep the company on track. (Of course, that's the subject of its own uproar: The terms of the deal put that $75 million loan ahead of taxpayers' investment. House Republicans say that was illegal; Energy Department lawyers had cleared it at the time.)

The idea of the loan guarantee program was to push technology from research and development into commercial production — an inherently risky process. Energy Department officials questioned whether Solyndra had the cash to complete its factory project but concluded private investors would continue to bankroll the company. That's rather different from the ad's claim of political favoritism.

The sky-high price of high-grade silicon, one of the keys to marketing Solyndra's silicon-free design, dove from almost $1,000 a pound in early 2008 to less than $100 a pound a year later, according to the Los Angeles Times. That left its technology much more expensive than competing flat panels, and paved the way for its struggle to survive. Solyndra argued, the Times reported, that it just needed time to get its prices down. But it never did catch up. 

Autumn Hanna of Taxpayers for Common Sense has been highly critical of the loan guarantee program since it started in 2005. She noted the program — backed by both Republicans and Democrats over the years — had "too few protections for taxpayers and too little rules governing the decision making." (The Government Accountability Office raised similar concerns in 2008 and 2010.)

"This was a recipe for fiscal disaster, and Solyndra will likely be just the tip of the iceberg," she said.

Our ruling

Solyndra's story is unfinished. FBI and congressional investigations continue, and more information about the loan guarantee program may yet come to light. 

The TV ad says "(President Barack Obama gave) half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy." Some of this is correct, while some isn't supported by the existing evidence.

First, the money wasn't Obama's to give. Solyndra's request predated his administration, and career Energy Department officials handled the deal.

Second, e-mails so far don't show an administration pushing through a loan to help Obama's "friends at Solyndra." Rather, it appears the administration asked the Energy Department officials to hurry the regular process, so the administration could burnish its stimulus efforts. 

Third, while e-mails raised doubts about Solyndra's liquidity as the Energy Department finalized the loan, those questions were answered by an official who argued investors would step in to protect the project — red flags, yes. But awareness in the White House the company would dissolve? No.

The government wasn't the only blindsided investor — private investors put up far more, and stand to lose more, than taxpayers.

Featured Fact-check

The Solyndra story might be one of the poor design of the Energy Department's loan guarantee program — something the Government Accountability Office has pointed out since 2008.  And with the congressional investigation ongoing, we may learn more about the Obama administration's role in the loan program — perhaps better supporting the ad's claims. For now, though, information in the public record does not support the ad's claim that the Obama White House is a pay-to-play cash machine for the politically well-connected. We rate this ad's claim Mostly False.

Our Sources

Americans for Prosperity, "Obama's Green Energy Scam," accessed Nov. 3, 2011

E-mail interview with Katie Glenn, CRC Public Relations, on behalf of Americans for Prosperity ad, Nov. 8, 2011

New Yorker, "Covert operations: The billionaire brothers who are waging war against Obama," Aug. 30. 2010

NPR, "Who's raising money for tea party movement?" Feb. 19, 2010

Los Angeles Times, "Koch brothers now at heart of GOP power," Feb. 6, 2011

Americans for Prosperity, "About Americans for Prosperity," accessed Nov. 11, 2011

The Guardian, "Billionaire Koch brothers fund Solyndra ad against Obama," Nov. 2, 2011

Los Angeles Times, "Koch brothers now at heart of GOP power," Feb. 6, 2011

Chicago Tribune, "Obama's Solyndra scandal reeks of the Chicago Way," Sept. 18, 2011

USA Today, "Obama defends clean-energy loan," Oct. 6, 2011

Daily Caller, "Bankrupt solar company with fed backing has cozy ties to Obama admin," Sept. 1, 2011

Federal Election Commission, individual contributor search, accessed Nov. 8-14, 2011

Washington Post, "Solyndra solar company fails after getting controversial federal loan guarantees," Aug. 31, 2011

Washington Post, "Obama administration e-mails: Giving more taxpayer money to Solyndra was risky," Sept. 15, 2011

Washington Post, "Solyndra violated loan terms in 2010 but got more federal money, DOE confirms," Sept. 28, 2011

National Journal, "FBI raids bankrupt solar company Solyndra," Sept. 8, 2011

Daily Caller, "Panel: Green jobs company endorsed by Obama and Biden squandered $535 million in stimulus money," Feb. 22, 2011

Daily Caller, "More solar companies led by Democratic donors received federal loan guarantees," Sept. 29, 2011

Los Angeles Times, "Solyndra's collapse is a tale of too much dazzle," Sept. 24, 2011

Oakland Tribune, "Solyndra cools solar industry," June 21, 2010

Oakland Tribune, "Solyndra's meltdown raises a widening array of questions about the fallen solar star," Sept. 26, 2011

Oakland Tribune, "Solar maker Solyndra closes its Fremont operations, lays off 1,100 workers and prepares to file for bankruptcy," Aug. 31, 2011

Solyndra, "Solyndra suspends operations to evaluate reorganization options," Aug. 31, 2011

Oakland Tribune, "Solyndra workers loved their jobs at the solar company," Sept. 26, 2011

Washington Post, "FBI searches office of Solyndra; lawmakers say they were misled about firm's finances," Sept. 8, 2011

Department of Energy, "Timeline of the Energy Department's Review and Approval Process for the Solyndra Loan," accessed Nov. 8, 2011, "Obama's Solyndra Problem," Oct. 7, 2011, Barack Obama bundlers, accessed Nov. 14, 2011

George Kaiser Family Foundation, About GKFF, accessed Nov. 14, 2011

George Kaiser Family Foundation, Areas of Focus, accessed Nov. 14, 2011

Interview with C. Renzi Stone, spokesman for the George Kaiser Family Foundation, Nov. 14, 2011

E-mail interview with Autumn Hanna, senior program director, Taxpayers for Common Sense, Nov. 14, 2011

Taxpayers for Common Sense, "Uranium loan guarantee is a bad bet," Nov. 3, 2011

Taxpayers for Common Sense, "DOE Loan Guarantees: Overview, Risks and More," Nov. 3, 2011

Taxpayers for Common Sense, "Department of Energy: Loan Guarantee Program Overview," Sept. 21, 2011

Taxpayers for Common Sense, "Taxpayer Risks with the Loan Guarantee Program," April 10, 2011

House Energy & Commerce Committee, Press Release, "As White House Threatens to Defy Subpoena, New Emails Offer Glimpse of Close Ties Between Solyndra Investor & West Wing," Nov. 9, 2011

National Legal and Policy Center, "The Solyndra - Walmart Connection," Sept. 29, 2011

House Energy & Commerce Committee, Hearing, Subcommittee on Oversight and Investigations business meeting to consider subpoena for OMB records relating to DOE's loan guarantee to Solyndra, Inc., July 14, 2011

House Energy & Commerce Committee, Hearing, Solyndra and the DOE Loan Guarantee Program, Sept. 14, 2011

House Committee on Energy and Commerce, Committee Investigators Seek Answers from Solyndra Investors, Sept. 21, 2011

House Committee on Energy and Commerce, Letter to Argonaut Private Equity regarding Solyndra investigation, Sept. 21, 2011

House Committee on Energy and Commerce, Letter to Madrone Capital Partners regarding Solyndra investigation, Sept. 21, 2011

House Committee on Energy and Commerce, Letter to U.S. Energy Secretary Steven Chu, Sept. 21, 2011

Rep. Cliff Stearns, "Stearns' letters request all Solyndra loan information exchanged among the White House, DOE, and two venture capital firms," Sept. 21, 2011

House Energy & Commerce Committee Democrats, "Committee Memo Clarifies Incorrect Assertions Regarding Solyndra Investigation," Sept. 22, 2011

House Energy & Commerce Committee, Hearing, From DOE Loan Guarantee to Bankruptcy to FBI Raid: What Solyndra's Executives Knew," Sept. 23, 2011

Mercury News, "Solyndra executives invoke the Fifth Amendment at Congressional hearing," Sept. 23, 2011

Bloomberg, "Kaiser Charity Sought Solyndra Plant After Billionaire Founder Aided Obama," Sept. 26, 2011

House Energy & Commerce Committee, Press Release, Upton, Stearns Comment on Explosive White House Documents on Solyndra," Oct. 7, 2011

St. Petersburg Times, "Cliff Stearns, from obscure Florida congressman, to leading Solyndra investigation," Oct. 8, 2011

House Energy & Commerce Committee, Hearing, Continuing Developments Regarding Solyndra Loan Guarantee," Oct. 14, 2011

Associated Press, "Treasury officials: Never saw a loan like Solyndra," Oct. 14, 2011

San Francisco Chronicle, "Solyndra's loan under fire; Energy chief to be grilled on restructuring," Oct. 15, 2011

Tulsa World, "Kaiser never mentioned Solyndra in White House visits, official says," Oct. 16, 2011

House Energy & Commerce Committee, Press Release, "Committee Serves Subpoena After White House Fails to Turn Over Internal Solyndra Documents — Upton Disappointed with White House Response," Nov. 4, 2011

White House response to House Energy & Commerce Committee, Nov. 4, 2011

Wall Street Journal, "Panel subpoenas emails on Solyndra," Nov. 4, 2011

House Energy & Commerce Committee, Press Release, "As White House Threatens to Defy Subpoena, New Emails Offer Glimpse of Close Ties Between Solyndra Investor & West Wing," Nov. 9, 2011

Washington Post, "Lawmakers seek White House documents on Solyndra loan guarantee," July 14, 2011

Daily Caller, "Solyndra officials made numerous trips to the White House, logs show," Sept. 8, 2011, Recipient profile: Solyndra, accessed Nov. 4, 2011, Loans - Award Summary: Solyndra, accessed Nov. 4, 2011

YouTube, "Solyndra Loan Guarantee Announcement," uploaded Sept. 9, 2009 (Biden)

YouTube, "Pr. Obama at Solyndra (1) California Solar Plant," uploaded May 26, 2010 (Obama)

The White House, "Background on the President’s Visit to Solyndra, Inc. in Fremont, CA," May 25, 2010

The White House, "Statement from Vice President Biden on New CBO Report on Recovery Act Job Impact," May 25, 2010

The White House, "Remarks by the President on the Economy," May 26, 2010

The White House Blog, "Solyndra: Illustrating a Recovery Act Supply Chain," May 26, 2010

Washington Post, "Obama's focus on visiting clean-tech companies raises questions," June 25, 2011

Associated Press, "Obama admin reworked Solyndra loan to favor donor," Sept. 16, 2011

Bloomberg, "Obama Team Backed $535 Million Solyndra Aid as Auditor Warned on Finances," Sept. 12, 2011

Los Angeles Times, "Solyndra investors are sought for questioning in House inquiry," Sept. 20, 2011

New York Times, "In Rush to Assist a Solar Company, U.S. Missed Signs," Sept. 23, 2011

Los Angeles Times, "GOP: Solyndra deal was rushed," Sept. 15, 2011

Wall Street Journal, "Solyndra Came Close to Landing Navy Deal," Oct. 14, 2011

The Hill, "House GOP demands White House release Obama's emails on Solyndra," Oct. 19, 2011

Bloomberg, "Obama Miracle is White House Free of Scandal: Jonathan Alter," Oct. 27, 2011

New York Times, Joe Nocera, "Hooray for Federal Loans!" Oct. 3, 2011

Time, Michael Grunwald, "Big Name Investors Behind Obama's Failed Green Tech Bet First in Line to Recoup Losses," Sept. 3, 2011

Bloomberg Newsweek, Joshua Green, "Solyndra flop stains a good program," Oct. 13, 2011

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Solyndra ad claims President Barack Obama gave taxpayer money to help his campaign donors at failed solar company

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