As a House subcommittee explored Wednesday, there may have also been flags to suggest that looming problems at the company itself, rather than the energy market, were apparent even before the Solyndra deal was signed. An E-mail among DOE staff dated August 20, 2009, obtained by Republicans on the subcommittee, suggests that there had been reservations about the company's internal cashflow. "The issue of working capital remains unresolved... the issue is cash balances, not cost. [Solyndra] seems to agree that the model runs out of cash in Sept. 2011 even in the base case without any stress," the E-mail said. And even before the Obama administration offered the $535 million loan guarantee to Solyndra on March 20, 2009 (of which they used $527 million), another E-mail was sent between administration staff at the Office of Management and Budget, claiming that "this deal is NOT ready for prime time.".Republicans have also exposed E-mails between the budget office and Vice President Joe Biden's office that suggest there was some pressure to push through the loan guarantee to coordinate with Biden's plans for a speech regarding Solyndra. According to the E-mail excerpts released by Republicans, an OMB staff member asked that the announcement be postponed, adding, "This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right."
Executives from Solyndra are scheduled to testify to members of the House next Friday, when more about the interactions between the company and the administration should become clearer.
For those on the right, especially the Republican National Committee which is responsible for leading the charge against President Obama's 2012 reelection campaign, the failure of Solyndra has already provided a political weapon against the president's stimulus-based jobs policies and the clean energy loan guarantee program itself. Earlier this week, the RNC unveiled a 15-page memo charging the administration with corruption based on the White House's political connections to Solyndra's investors. The company's failure also brings to light the reality that the stimulus-funded loan program is indeed a risky venture and can be a drain on taxpayer money, says Nick Loris, a energy policy analyst at the Heritage Foundation, a conservative Washington-based think tank. And, he says, it also demonstrates that the global market often moves faster than the federal government. "This just goes to show that it isn't the role of the government to pick winners and losers, and usually the government's picking the losers because the winners can compete in the marketplace without the subsidies," says Loris.
Still, however, Solyndra is the first and only of the loan guarantee recipients to go bankrupt, and the $527 million it lost is less than 2 percent of the total $38.6 billion committed by the program for all clean energy projects. The DOE insists the risks have been worth it, since it's helped the United States compete with other clean energy producers abroad in areas that it wouldn't otherwise. "If we can deploy these sorts of innovative technologies, it strengthens our industry across the board. So, there's more risk associated with them, but there's very high reward associated with them," LaVera says.
The Energy Department has until the end of the month to finalize the remaining 15 loan guarantees that it has committed, and it says all pending deals will be closed, if they are ready, before the deadline. As the details of the Solyndra deal become clearer, the Obama administration will have not only taxpayer dollars, but its political reputation, on the line.