A top Department of Energy official in charge of the office that awarded Solyndra LLC $535 million in loan guarantees insisted the company was "headed in the right direction" months before the firm went bankrupt and saw its offices raided by the FBI.
"This is a company that doubled their revenues and essentially doubled them again, year over year," Jonathan Silver, Energy Department loans chief, said in an April 2011 interview with SNL Renewable Energy Weekly, a trade publication.
"They are going in the right direction."
In fact, four months after the comments, Solyndra fired 1,000 employees, ceased operations, filed for bankruptcy, saw its offices raided by the FBI and its top two executives hauled before Congress, only to invoke their Fifth Amendment right to refuse to testify.
In public statements prior to Solyndra's collapse, Mr. Silver seemed confident the company was going to succeed. During the same April 2011 interview, Mr. Silver, a venture capitalist before joining the Energy Department, said Solyndra had sold hundreds of thousands of solar panels around the world and that it "has been misunderstood by the popular press."
"It's not as if this is some kind of startup that is not working," he said.
Mr. Silver, who was not with the Energy Department in 2009 when the loan guarantees were awarded, was not made available by the Energy Department for an interview for this article, in response to written questions about whether he was relying on financial information from Solyndra when he made the statements.
"As part of their review of loan applications and monitoring of the projects we support, career staff in the [Department of Energy] loan office review audited financial information provided by the companies under the penalty of law," Energy Department spokesman Damien LaVera told The Washington Times in an email.
There's no doubt Solyndra's financial reporting is coming under sharp scrutiny these days after the FBI raided the company's headquarters last month. What's more, the Justice Department last week sought a trustee to oversee the company in bankruptcy, saying Solyndra executives haven't been forthcoming when asked for information about its contracts with customers.
Yet while the company's collapse last month seemed sudden, there were signs of trouble. In November 2010, for instance, Solyndra announced it was closing its older plant and laying off 135 temporary workers and 40 full-time staff. But Mr. Silver later said the so-called layoffs were misunderstood.
"The number of people that work at Solyndra today is 300 greater than before the project got under way," he said in the April 2011 interview. "The plant that was closed ... was a small, early prototyping plant, which was never intended to be a long-term facility.
"The rationale for doing some of these things got lost in the headlines," Mr. Silver said. "People said, 'People got laid off.' Actually, they had a set of contract workers whose work was done."
Solyndra thought so much of Mr. Silver's comments that company executives included a quote from him in a three-page memo they sent in June 2011 to the House Committee on Energy and Commerce, which had opened an investigation into the $535 million loan-guarantee package that the Energy Department awarded to Solyndra in 2009.
The memo, titled "Exceeding Expectations: Solyndra Today," gave a glowing portrait of the California solar company's prospects. It noted that while Solyndra does not publicly release its quarterly financial results, the company was "on track for this year.
"In a highly competitive global marketplace, Solyndra continues to win large projects on commercial rooftops around the world, and we are confident on the merits of our differentiated, lightweight, simple to install cylindrical rooftop and greenhouse products," the memo said.
And if lawmakers didn't take the company's word for it, Solyndra also included comments it attributed to Mr. Silver in the memo to Congress.
"The company in question, Solyndra, built an enormous robotics factory to produce solar panels on time and under budget," Mr. Silver said in a May 2011 radio interview, according to the Solyndra memo.
"There are actually more people working there today than when we first funded them," Solyndra quoted Mr. Silver as saying. "The story has been a little misunderstood."
The remarks were similar to those reported weeks earlier by Environment & Energy Daily, a trade publication, at a time when Republicans on the Energy and Commerce Committee were raising questions about the company's finances.
"It's been badly misunderstood in public discussions," Mr. Silver said. "Things have not gone wildly awry, though they somehow have been reported that way."
Two weeks after Solyndra collapsed, Mr. Silver testified to the House Energy and Commerce Committee's investigations subcommittee. By then, there was no doubt Solyndra was no longer exceeding expectations.
At the hearing, Mr. Silver blamed the company's collapse on Chinese solar companies, backed by the government with tens of billions of dollars in credit, flooding the market with cheap panels, as well as declining demand for solar panels in Europe.
Mr. Silver acknowledged concerns, however, about Solyndra's "cash-burn rate" in questioning by Republican Rep. Cliff Stearns of Florida, chairman of the investigations subcommittee.
"I'm just saying, with all your experience as a venture [capitalist], I'm surprised you didn't see this cash-burn rate as a serious flag," Mr. Stearns said.
"We did, we did, we did, congressman" Mr. Silver replied, "and we talked with the company about it regularly. But I need to underscore something I said before. As lenders, and particularly with lender-liability issues, we are not actually in a position to force a company to do anything."
Asked whether Solyndra ever misled the Energy Department, or if he thought the company was not providing federal officials with "all appropriate information," Mr. Silver said, "I have no reason, sitting here today, to believe that we were misled."
Solyndra's troubles have been magnified by the public support it won from the top reaches of government, including a tour of the company last year by President Obama and remarks by Vice President Joseph R. Biden and then-California Gov. Arnold Schwarzenegger at a 2009 groundbreaking ceremony.
On Monday, Mr. Obama said he didn't regret the loans to Solyndra, saying that "there are going to be some failures, and Solyndra's an example." As China and other countries pour money into clean-energy technology, Mr. Obama said, "We've got to make sure that our guys here in the United States at least have a shot."
Also Monday, House Energy and Commerce Committee Democrats said in a seven-page memo that new documents don't support accusations that Solyndra benefited from political favors, but rather show disagreement between the Office of Management and Budget and the Energy Department on Solyndra's prospects.
One person, Steve Westly, managing partner of the Westly Group, even reached out to White House aide Valerie Jarrett to warn against a visit by Mr. Obama to Solyndra, according to emails released Monday.
"I just want to help protect the president from anything that could result in negative or unfair press," Mr. Westly wrote. "If it's too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc."
In turn, White House officials contacted the Energy Department, which responded with what the memo calls a defense of Solyndra.
"Bottom line is that we believe the company is okay in the medium term, but will need some help of one kind or another down the road," Rod O'Connor, chief of staff for the Energy Department, wrote to Ronald Klain, Mr. Biden's then-chief of staff.
Mr. Klain nonetheless reported back to Ms. Jarrett, "Sounds like there are some risk factors here — but that's true of any innovative company that POTUS would visit. It looks like it is OK to me, but if you feel otherwise, let me know."
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at email@example.com.
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