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California Democratic Party among Solyndra’s creditors

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Out of the hundreds of out-of-work employees, vendors, investors and other creditors in the bankruptcy of government-backed solar-panel maker Solyndra LLC, one name stands out: the California Democratic Party.

Why California Democrats would be creditor to a company that received more than a half-billion dollars in federal loans to build a solar-panel plant isn't clear. Even party officials say they're not sure.

The California Democratic Party's communications director, Tenoch Flores, said the organization was not owed "any funds in any form" by the California-based company. He said he was unclear why the party would be listed as a creditor in Solyndra's bankruptcy filing.

According to campaign-finance records, Solyndra donated $7,500 to the California Democratic Party in October 2010. It's legal in California for corporations to make donations. But that doesn't explain why the company would identify the Democratic Party as a creditor in its bankruptcy filing a year later.

A Solyndra spokesman did not respond to messages seeking more details about the filing.

Solyndra's spending habits are under sharp scrutiny after it fired more than 1,000 employees, filed for bankruptcy this month and had its offices raided by the FBI.

Just two years ago, the company received federal loan guarantees of more than $500 million, money it burned through but hasn't repaid. Because of a subsequent loan restructuring, taxpayers won't be repaid before the private investors who poured $75 million into the company earlier this year as it tried to stay afloat.

The Washington Times reported last week that law firms that took credit for helping to push through the federal loan package were paid millions of dollars reported through the federal Recovery Act.

The same month Solyndra donated to the California Democrats, the company also contributed $1,000 each to three California state Assembly candidates, according to data from the National Institute on Money in State Politics.

The state Democratic organization was identified in a document called a "creditor matrix." It's a standard filing in bankruptcy cases, where the debtor provides an alphabetical list of the names and addresses of all creditors. In the Solyndra case, the list runs more than 100 pages.

In an affidavit along with the court filing, the company's chief executive, W.G. Stover Jr., swore under penalty of perjury that that creditor list was true and accurate to the best of his knowledge and that the information came from a review of the company's books and records.

Powerful lobbying

Beyond being listed as a creditor, the state Democratic Party's ties to Solyndra aren't clear, but a fuller picture could emerge as the bankruptcy case unfolds. What is clear, based on public records, is that despite its well-known business failings, Solyndra was no novice when it came to politics.

Company officials visited the White House on numerous occasions, hired an expensive team of Washington lobbyists and, in the months before its bankruptcy, walked the halls of Congress to personally assure lawmakers that "business was booming," as one lawmaker later recalled.

In the wake of the company's collapse and subsequent raid by the FBI this month, Solyndra's top two executives, citing their Fifth Amendment rights, refused to testify last week before the House Energy and Commerce investigations subcommittee, which has been looking at the Solyndra loan deal for months. In bankruptcy records, the company blamed stiff foreign competition and an oversupply of solar panels for its fast downfall.

But the committee is investigating whether the company duped federal officials about its finances, and whether political pressure pushed regulators to rush their approval so the White House could publicize the loan as part of the administration's efforts to create jobs.

Indeed, President Obama, Vice President Joseph R. Biden and Energy Secretary Steven Chu all hailed the company's prospects. When the Energy Department in 2009 signed off on more than a half-billion dollars in federal loan guarantees to the company, Mr. Biden remarked, "This announcement today is part of the unprecedented investment this administration is making in renewable energy and exactly what the Recovery Act is all about."

At the same announcement ceremony, in which Mr. Biden appeared by satellite, California Gov. Arnold Schwarzenegger, a Republican, predicted that Solyndra would create thousands of jobs.

"So let's give a big hand to President Obama and the Obama administration for this great job," Mr. Schwarzenegger said.

Although Mr. Obama railed against the influence of lobbyists in his 2008 presidential campaign, records show that Solyndra relied heavily on an expensive cadre of Washington insiders to press its case to lawmakers and administration officials. The company spent more than $1 million on federal lobbyists from January 2009 to June 2011, according to data from the Center for Responsive Politics.

Contributions

The company had its own in-house team of lobbyists, but it also hired three other Washington lobbying firms: McAllister & Quinn, Washington Tax Group and McBee Strategic Consulting.

Many of the lobbyists previously worked in government for Democratic and Republican lawmakers alike. They included former aides to lawmakers such as Sen. Alfonse D'Amato, New York Republican; Sen. Maria Cantwell, Washington Democrat; and House Minority Leader Nancy Pelosi, California Democrat.

From 2008, when the company spent $160,000 on lobbying, to 2010, when it spent $550,000, lobbying expenditures increased nearly 250 percent, according to the Center for Responsive Politics.

According to the company's list of creditors, Solyndra also has ties to a prominent California public relations and lobbying firm, KP Public Affairs. The firm, which did not respond to email and phone messages by deadline, describes itself as "The Experts at Winning" and says it is often called upon to lead negotiations in major policy issues facing California each year.

Like the state's Democratic Party and hundreds of other businesses and people, KP Public Affairs is listed on Solyndra's list of creditors.

Solyndra employees have donated more than $20,000 to federal lawmakers over the years, most of it going to Democrats. A breakdown of donations by the Center for Responsive Politics shows 72 percent went to Democrats, 27 percent to Republicans and 1 percent to Libertarian candidates.

But it's not just the political activity by the company or employees that congressional investigators are probing. Last week, lawmakers requested information from Solyndra's top two private investors about any information they have concerning the company's loan, as well as any documents relating to meetings the investors had with the White House.

One investor, Argonaut Private Equity, is tied to George Kaiser, Oklahoma billionaire and fundraiser for Mr. Obama's 2008 campaign. Another is Madrone Partners, which has ties to Wal-Mart's Walton family. The Wal-Mart political action committee has favored Republicans over the years.

Mr. Kaiser's name surfaced last week when Brian Harrison, Solyndra's chief executive officer, appeared before the House Energy and Commerce investigations subcommittee. But there were no answers about whether the investors got involved in lobbying government officials.

Asked by Rep. Lee Terry, Nebraska Republican, whether he talked with Mr. Kaiser about the company's financial problems before government officials agreed to restructure Solyndra's loan, Mr. Harrison answered that question the same way he did all of the others that came his way.

"On the advice of my counsel," he said. "I invoke the privilege afforded by the Fifth Amendment of the Constitution, and I respectfully decline to answer any questions."

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