The feds’ probe into the collapse of a green-tech firm favored by the White House could spell trouble for Team Obama in 2012.
Despite President Barack Obama’s steep decline in job approval, especially this summer, the president has commanded a remarkable reserve of high personal regard from voters. Even as the polls show him approaching the kind of job support last seen with his predecessor George W. Bush in the post-Katrina era, Obama has not had to deal with significant levels of personal dislike in national surveys. Generally, voters respond favorably on questions of personal integrity and political motivation, which presents a tougher challenge to Obama’s Republican opponents than Democrats faced in 2006 and 2008.
Obama has earned those high personal-quality ratings by avoiding scandal. A strong family man, the president has given no hint of bad behavior, and his Cabinet and White House staff have similarly offered no reason to suspect any misdeeds. It’s been one of the quietest White Houses on the scandal front in recent memory — but that may have changed with the implosion of a politically-connected green-tech firm in Northern California, and the apparent disappearing act of more than $500 million in taxpayer funds.
In the 2009 stimulus plan, Obama sought and received billions of dollars to subsidize a promised explosion in “green jobs.” At the time, cap-and-trade was a marquee agenda item for the White House, but Obama needed to demonstrate that the U.S. could quickly transition to alternative energy sources to replace the hydrocarbon-based energy that meets the needs of the massive U.S. economy. Obama needed a big win in green energy to show that the industry could create jobs in the worst recession the U.S. had seen in decades, as well as jumpstart green energy production to clear the way for cap-and-trade.
The Obama administration chose Solyndra as its poster child for this effort. The White House fast-tracked approval for taxpayer-backed loan guarantees. The company received $535 million from the Treasury’s Federal Financing Bank to build a new manufacturing facility. Obama himself appeared at Solyndra touting his green-jobs initiative, while Solyndra insisted as late as this summer that their financial status was strong.
Suddenly, though, Solyndra collapsed, seemingly without warning. Its employees — more than a thousand of them — showed up to work on the last day of August to discover that the company had shut its doors. And just as suddenly, we began to find out that the collapse was not unforeseen after all. Despite the assurances of Solyndra executives to members of Congress, the company’s stock price had fallen drastically over the past two years as questions arose about Solyndra’s competitiveness and financial strength. And its taxpayer-backed expansion didn’t create many new jobs, as Congress noticed in February.
It takes more than a bad bet to make a scandal — but Solyndra has connections all the way to Obama himself. When Solyndra initially applied for taxpayer subsidies, auditors at the Department of Energy questioned Solyndra’s stability. So why did the Obama administration fast-track Solyndra’s application? One reason might be that one of the chief investors in Solyndra is George Kaiser — who also was one of Obama’s campaign bundlers in 2008, raising more than $50,000. Solyndra executives made more than 20 visits to the White House between March 2009 and April 2011. Was it a coincidence that Solyndra ended up with an interest rate from the feds at one-fourth the going rate for green-jobs projects?
The curious collapse of Solyndra also turned up a strange arrangement for repayment to creditors. Despite having put up $535 million in taxpayer loan guarantees, the Obama administration didn’t insist on putting taxpayers in the most senior position for creditors if Solyndra failed. Instead, as ABC reports, Kaiser gets repaid first on a $75 million investment before taxpayers see a dime.
If that sounds fishy to you, you’re not alone. Last week, in response to an investigation by the DOE’s Inspector General, the FBI raided Solyndra, seizing its business records. Federal agents also raided the homes of Solyndra executives, seizing computers and more records. Congress, which had already opened an investigation into Solyndra’s loans, will undoubtedly press for access to this material for its own probe.
The RNC sees electoral gold in Solyndra. On Monday, the RNC launched an effort to shine a bright light on the president’s connections to Solyndra, which isn’t difficult to do, especially after ABC reported that DOE officials sat in on Solyndra’s board meetings for months before the collapse. Despite having this unprecedented access, the Obama administration did nothing to alert Congress that Solyndra would fail, and in fact, failed to respond when Solyndra executives misrepresented the status of the company to members of Congress.
There have been other controversies in the Obama administration, such as Operation Fast and Furious in the ATF office in Phoenix and the Department of Justice. But Solyndra is the first controversy that has the potential to directly stain Barack Obama himself. Indeed, Obama might find that his well of personal favorability could run dry if investigations discover quid pro quos in Solyndra’s collapse and the vaporization of over a half-billion dollars in taxpayer funds.