Solyndra Was Asked to Delay Layoff News Till After Midterms, Memo Says

WASHINGTON — The Energy Department asked the Solyndra solar equipment company to delay an announcement about impending layoffs until after last year’s midterm elections, according to a memoby the Republican staff of the House subcommittee that will call the energy secretary to testify Thursday about a government loan to Solyndra.

The Republican memo quotes from an e-mail written by a staff member at Argonaut, a venture capital firm that was a major investor in the company, that says of the Energy Department, “They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd.” The midterm election was Nov. 2.

“Oddly they didn’t give a reason for that date,” the committee staff quotes the e-mail as saying. The e-mail itself was not released, and no government e-mail requesting a delay has been found.

A spokesman for the Energy Department, Damien LaVera, asked about the e-mail, did not dispute the report, which he said referred to the timing of a press release. But, he added, “as the 180,000 pages of documents that the Department of Energy turned over to the committee indicate, the department’s decisions about this loan were made on the merits, based on extensive review by the experts in the loan program — and nothing in this Republican committee memo changes that.” The memo makes two other points that, if confirmed, would support the Republicans’ position that the $535 million loan guarantee was rushed through and handled badly.

One is on the question of how the government gave away its place as first creditor in line in case of a liquidation. Federal law requires that when the government is owed money, it is the first creditor. But as Solyndra’s financial situation worsened, the private investors came forward with a new $75 million loan, and under an agreement that the Energy Department consented to, that debt became “senior” to what was owed the government.

Republicans on the committee argue that before approving the arrangement, the Energy Department should have referred the question to the Justice Department.

Energy Department officials have said in testimony that while the law requires the government debt be senior at the time the loan is made, it allows more senior debt to be incurred later. And letting Solyndra borrow more money from other sources increased the possibility that it would survive and earn revenues that could pay back the loan, the officials said. (They turned out to be wrong; the company ran out of money at the end of August, and is now being liquidated.)

According to the Republican staff report, the Office of Management and Budget, part of the White House, initially believed that the loan modification would cost the government money and was not permissible, but later changed its mind. The reason for the turnaround was not made clear in the Republican memo.

The memo also referred to a news item carried by Dow Jones newswires on July 7, 2009, when the company and the department were in the late stages of negotiations over the loan guarantee, in which Energy Secretary Steven Chu is quoted as saying that the Solyndra loan guarantee was imminent, and that “the loan is theirs, as soon as they get the additional capital that’s required by statute.”

But according to the Republican memo, a staff member in the Energy Department’s Loan Program office wrote in an e-mail that he had “no idea” where Dr. Chu got information about an increase in equity, but that “the conclusion that ‘the loan is theirs’ doesn’t help our negotiations.”

Obama’s catastrophic pipeline cop-out

The proposed Keystone XL Pipeline offers nothing but promise: tens of thousands of desperately needed jobs, and a big step toward ensuring North American energy security.

But last week, promise gave way to politics when U.S. President Barack Obama punted on the pipeline permitting decision, delaying it until after the November 2012 election. The Wall Street Journal called the decision a “Keystone Cop-Out.” I have gone a step further and called it a catastrophic cop-out, one with certain economic and diplomatic consequences. The decision on the KXL permit was expected before the end of this year and elected officials from Prime Minister Stephen Harper to a bipartisan mix of members of Congress rightly called it a “no-brainer.” After all, what could be easier than supporting energy exported from a steadfast friend, an ally in the war on terror, and a country deeply committed to environmental stewardship?

What could make more sense than approving a project that means 20,000 new jobs in the U.S.? These jobs come as the United States is struggling to recover from a deep recession, with unemployment continually exceeding nine per cent. Add to this that only last month, the president’s own White House Jobs Council cautiously supported the KXL project, and the environmental impact statement found the pipeline would not cause undo harm, KXL approval seemed not just an easy decision, but an obvious one.

So what turned common sense on its head?

Environmental radicals in the U.S., which include the various “Occupy” protesters and Hollywood hipsters, stung by a series of environmental disappointments the last two years, decided the KXL pipeline was their cause célèbre.

Back in 2008, they had high hopes, with a brand new president and a Democratic Congress, that their environmental wish list would at last be granted.

But that’s not what happened. Instead, environmental groups have been dealt several setbacks. A climate change bill passed the House by the smallest of margins in 2009, only to die in the Senate and with it the promise of legislatively mandated cap and trade. More recently we are seeing scandals involving the administration favouring multi-million-dollar loans to renewable energy companies like Solyndra, only to see them file for bankruptcy. With a sputtering economy, Americans put environmental concerns on the back burner and Congress, likewise, has had no appetite to pass legislation that could be deemed “anti-jobs.”

As a result, the more strident environmentalists were demanding a victory and what was a “no-brainer” pipeline project approval, became a “no way!” for a portion of President Obama’s base who demanded tangible proof of his fidelity to their cause. Then with Nebraska expressing concern over the project and seeking an alternative route to avoid areas in the Sand Hills the state fears would be vulnerable to a spill, the administration had a hook on which to hang the delay.

So now the U.S. State Department is reviewing that alternative route and conveniently, a decision has been postponed until 2013. The permitting process that usually takes 18 months will now take 54 months. That’s a long time to wait on jobs — especially those “shovel ready” jobs the president says he wants to create. Talk about infrastructure! The KXL project is a 2,700-kilometres-long, $7-billion investment. That represents a whole lot of shovels.

Read more: http://www.ottawacitizen.com/technology/Obama+catastrophic+pipeline/5715471/story.html#ixzz1dpEs28d2

Key Obama Backer Slow to Raise Cash

Earlier this year, Bill Burton left the White House to help create a pro-Obama fund-raising group with a goal of raising $100 million, aiming to mimic the success of recent Republican efforts.

So far, he's falling short.

Many of the Democratic Party's biggest donors aren't planning to support his organization, either because they're unhappy with Mr. Obama or disillusioned with politics in general. There's also this fund-raising fact of life: Wealthy donors are more likely to open up their wallets to defeat a sitting president than to protect one.

Mr. Burton's group has spent less than $1 million on advertisements this year, while the leading pro-Republican organization has spent more than $20 million.

Mr. Burton, a former spokesman for Mr. Obama, said in an interview that potential donors don't always know who he is, which means he has to use meetings for introductions, not strictly for pitching.

Arthur Lipson, owner of hedge-fund management firm Western Investment, has donated more than $500,000 to Democratic causes in the past decade, according to public records. He hasn't heard from Mr. Burton, but an outreach probably wouldn't be worth the effort. "I will definitely not donate to Obama in any way, shape or form," said Mr. Lipson, who objects to deals the president has made with Republicans.

The Burton group's struggles have caught the attention of Obama re-election campaign officials, who privately say they aren't counting on its support.

Democrats in 2004 and then Republicans in 2010 dramatically expanded a new, loosely regulated form of political fund raising—making it the fastest-growing source of election spending.

American Crossroads and Crossroads GPS, founded with the help of former White House aide Karl Rove, are the largest of the GOP-affiliated groups. They spent more than $70 million in 2010 and helped Republicans win control of the House. Their cash narrowed the financial advantage Democrats have held in recent years, in part due to support from labor unions.

Mr. Obama and the eventual Republican nominee for president are each expected to raise about $750 million for the 2012 race. As a result, these outside groups could tip the balance.

What are known as 501(c)4 outside political groups don't have to disclose their donors, but are limited in how much of their funds can be spent directly attacking or supporting candidates. Donors who give to a related category known as 527 groups know that their names must be disclosed, but 100% of their money can be used to directly attack or support candidates.

Mr. Burton is sticking by his prediction that his two groups, Priorities USA and Priorities USA Action, will raise and spend $100 million. The Rove-related groups could spend as much as $300 million on 2012 races for White House and Congress.

"We won't be able to match Karl Rove dollar for dollar," Mr. Burton said. "But we have no doubt that we will have the resources necessary to be a countervailing force."

In 2010, Democrats and the White House sharply criticized these outside groups, charging them with undermining the legitimacy of elections by not revealing their donors.

Republicans have noted the change of tune. "Last year, Obama sanctimoniously railed against nondisclosing groups, and this year his brazenly hypocritical operatives started one for him," said Jonathan Collegio, a spokesman for American Crossroads and Crossroads GPS.

Mr. Burton, in response, said he didn't want to let "the issues and candidates we care about [get] overrun with hundreds of millions of unanswered dollars."

His biggest hurdle will be lackluster interest from wealthy liberals. Of the $200 million donated by them in 2004 to back Democratic presidential candidate John Kerry, nearly $40 million came from Wall Street financier George Soros and Peter Lewis, chairman of Progressive Insurance Co. This election, neither plans to play a major role.

Mr. Soros plans to mostly donate to organizations promoting liberal policies, such as Media Matters, a group that criticizes conservative media outlets. A Lewis spokeswoman said he has "refocused his efforts on rebuilding the progressive infrastructure and modernizing marijuana laws."

Giving is often about relationships, said Michael Fleming, a political advisor to major Democratic donor David Bohnett. "You are more likely to regularly contribute [to an established organization] than to a brand new political enterprise where they have to introduce themselves and explain what they do," he said.

Mr. Burton's group is trying to motivate donors by focusing on Mitt Romney as if he were already the GOP nominee, hoping donors will contribute now. The group recently spent $100,000 on an ad titled "Mitt Romney's America." And Mr. Burton has been reminding donors of 2000 to warn against complacency.

Steve Rosenthal, a Democrat operative who was involved with the 2004 campaign, predicted donors would start writing checks once the Republicans select a nominee. "Fear is a great motivating factor," Mr. Rosenthal said. "Once they see a clear and present danger, Democratic donors should respond in a pretty big way."

Read here.