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SallyRand · 09-14-2011, 07:34 AM

http://www.sfgate.com/cgi-bin/articl...BAFF1L1RQV.DTL

FBI serves search warrants at Solyndra

David R. Baker,Henry K. Lee, Chronicle Staff Writers

Friday, September 9, 2011

FREMONT -- FBI agents armed with search warrants descended on the Fremont offices of bankrupt solar startup Solyndra on Thursday, opening an investigation into a company whose receipt of a half-billion dollars in government loans had already drawn sharp congressional criticism.

The search was part of a joint operation by the FBI and the U.S. Department of Energy's inspector general, whose agents also participated in the raid. Solyndra built its second factory in Fremont using $528 million in Energy Department loans, and the company's sudden closure last week triggered charges that the Obama administration had not properly vetted the loans to the company.

Representatives of both the Energy Department and the FBI refused to describe the focus of their joint investigation. But speculation immediately turned to the loans.

"Clearly, that would be the assumption, but I don't know specifically what they're looking for," said Solyndra spokesman Dave Miller. The company, he said, would cooperate with the investigation.

Dozens of federal agents converged on the shuttered Fremont plant early Thursday and within hours started carting away boxes of documents. The facility maintains a skeleton staff of about 100 employees working on the bankruptcy proceedings.
Promising startup

Solyndra once was considered one of Silicon Valley's most promising startups, attracting more than $1 billion in private funding. But the company closed its factory and fired most of its 1,179 employees on Aug. 31, saying it couldn't compete against less-expensive solar cells flooding the market from new, heavily subsidized factories in China. Solyndra filed bankruptcy papers earlier this week, listing $784 million in secured loans, plus other debts, and $859 million in assets.

Most of that money came from taxpayers, and the government must now try to get it back during Solyndra's bankruptcy proceedings.

Solyndra's loans came from a U.S. Department of Energy program that was created by President Bush in 2005 but became part of Obama's economic stimulus package in 2009. Solyndra, which applied for the money in 2006, received conditional approval for the program's very first loan, in March 2009.

Despite the long lag time, a report last year from the U.S. Government Accountability Office found that the Energy Department had given conditional loan commitments to five companies before receiving all the final reports used to screen the applications. The report did not name Solyndra as one of those five companies, but an ABC News investigation into the loans did.

"It made us very concerned that they would make a conditional commitment without having all this information," said Franklin Rusco, who led the GAO team that wrote the report. "Even making a conditional commitment - even if you can go back on it later - it gives an advantage to a company. It gives a stamp of approval."

Critics have questioned whether political favoritism played a role in the loan program. Solyndra's biggest private investor, Argonaut Ventures, is run by George Kaiser, an Oklahoma oilman who served as a bundler of campaign contributions for Obama in 2008.

Energy Department officials reject that accusation and say Solyndra's application was properly vetted. But they conceded last week that investing in any startup company carries risks. Repayment of the loans will depend on Solyndra finding a buyer for the business or its assets. And while the company told a bankruptcy judge on Wednesday that it had two potential bidders for the plant, some solar industry analysts say the company will have difficulty finding a buyer - or at least a buyer willing to pay much. Solyndra made a unique, tube-shaped solar module that proved expensive to produce, and the plant was designed around that unusual technology.

"It's very specialized for what they did," said Mark Bachman, senior research analyst for Avian Securities. "There isn't anybody else out there who's even worth mentioning who's going down this path. It's going to be hard to find a buyer."

Nor is the government the first creditor in line to be repaid. A $69 million loan this spring from the company's private investors will be repaid before taxpayers get any money back, according to a creditors' agreement in the bankruptcy filing.
Part of stimulus

The FBI search added to the criticism of Obama's effort to fund alternative-energy companies. That effort, part of the president's economic stimulus package, has delivered multi-million-dollar loan guarantees to other Bay Area businesses, such as Oakland's BrightSource Energy and SunPower Corp. of San Jose.

"President Obama's signature green jobs program went from a darling of the administration, to bankruptcy to now the subject of an FBI raid in a matter of days," U.S. Reps. Fred Upton of Michigan and Cliff Stearns of Florida said in a joint statement. The two Republicans, both on the House Energy and Commerce Committee, opened an investigation into Solyndra's loan in February but said on Thursday that they did not receive advance notice of the raid.

"There is much to learn as the investigation moves forward, and it is imperative that the American taxpayers are not paying the price for the sins of Solyndra," their statement said.

The committee's two ranking Democrats called on Solyndra's CEO, Brian Harrison, to testify next week at a hearing on the company's loans. They hinted that Harrison had misled them in the past.

"Less than two months ago, Mr. Harrison met with us and other committee members to assure us that Solyndra was in a strong financial position and in no danger of failing," wrote Reps. Henry Waxman, D-Los Angeles, and Diana DeGette, D-Colo., in a letter to Stearns. "He did not convey to us the perilous condition of the company, and the committee should know why."
Financial red flags

The hearing, by the energy and commerce committee's investigative arm, is scheduled for Wednesday.

While the plant closure came as a surprise to Solyndra employees, the company's finances had raised red flags in the past. Last year, the company canceled plans for a $300 million initial public stock offering, after an analysis by PricewaterhouseCoopers questioned its financial health. Later in the year, the company closed its original Fremont facility and laid off 40 employees.

In February, the Energy Department agreed to restructure Solyndra's loan, giving the company more time to pay the government back.

"Ultimately, the choice was between imminent liquidation or giving the company and its workers a fighting chance to succeed," department spokesman Damien LaVera wrote Thursday in an e-mail.

The company closed without giving the advance notice to its workers that many large companies must provide under federal and state law. The company said it believed it was exempt from notifying its 968 full-time and 211 contract workers under a loophole in the Worker Adjustment and Retraining Notification Act. Still, one of the company's engineers filed a class-action suit against Solyndra last week, seeking 60-days pay and benefits.

09-14-2011, 07:34 AM
SallyRand So Fucking Banned Industry Role: Join Date: Jan 2008 Location: In A Galaxie Far, Far Away! Posts: 3,487	Obama's Pet Company Fails! Allegations of Fraud! http://www.sfgate.com/cgi-bin/articl...BAFF1L1RQV.DTL FBI serves search warrants at Solyndra David R. Baker,Henry K. Lee, Chronicle Staff Writers Friday, September 9, 2011 FREMONT -- FBI agents armed with search warrants descended on the Fremont offices of bankrupt solar startup Solyndra on Thursday, opening an investigation into a company whose receipt of a half-billion dollars in government loans had already drawn sharp congressional criticism. The search was part of a joint operation by the FBI and the U.S. Department of Energy's inspector general, whose agents also participated in the raid. Solyndra built its second factory in Fremont using $528 million in Energy Department loans, and the company's sudden closure last week triggered charges that the Obama administration had not properly vetted the loans to the company. Representatives of both the Energy Department and the FBI refused to describe the focus of their joint investigation. But speculation immediately turned to the loans. "Clearly, that would be the assumption, but I don't know specifically what they're looking for," said Solyndra spokesman Dave Miller. The company, he said, would cooperate with the investigation. Dozens of federal agents converged on the shuttered Fremont plant early Thursday and within hours started carting away boxes of documents. The facility maintains a skeleton staff of about 100 employees working on the bankruptcy proceedings. Promising startup Solyndra once was considered one of Silicon Valley's most promising startups, attracting more than $1 billion in private funding. But the company closed its factory and fired most of its 1,179 employees on Aug. 31, saying it couldn't compete against less-expensive solar cells flooding the market from new, heavily subsidized factories in China. Solyndra filed bankruptcy papers earlier this week, listing $784 million in secured loans, plus other debts, and $859 million in assets. Most of that money came from taxpayers, and the government must now try to get it back during Solyndra's bankruptcy proceedings. Solyndra's loans came from a U.S. Department of Energy program that was created by President Bush in 2005 but became part of Obama's economic stimulus package in 2009. Solyndra, which applied for the money in 2006, received conditional approval for the program's very first loan, in March 2009. Despite the long lag time, a report last year from the U.S. Government Accountability Office found that the Energy Department had given conditional loan commitments to five companies before receiving all the final reports used to screen the applications. The report did not name Solyndra as one of those five companies, but an ABC News investigation into the loans did. "It made us very concerned that they would make a conditional commitment without having all this information," said Franklin Rusco, who led the GAO team that wrote the report. "Even making a conditional commitment - even if you can go back on it later - it gives an advantage to a company. It gives a stamp of approval." Critics have questioned whether political favoritism played a role in the loan program. Solyndra's biggest private investor, Argonaut Ventures, is run by George Kaiser, an Oklahoma oilman who served as a bundler of campaign contributions for Obama in 2008. Energy Department officials reject that accusation and say Solyndra's application was properly vetted. But they conceded last week that investing in any startup company carries risks. Repayment of the loans will depend on Solyndra finding a buyer for the business or its assets. And while the company told a bankruptcy judge on Wednesday that it had two potential bidders for the plant, some solar industry analysts say the company will have difficulty finding a buyer - or at least a buyer willing to pay much. Solyndra made a unique, tube-shaped solar module that proved expensive to produce, and the plant was designed around that unusual technology. "It's very specialized for what they did," said Mark Bachman, senior research analyst for Avian Securities. "There isn't anybody else out there who's even worth mentioning who's going down this path. It's going to be hard to find a buyer." Nor is the government the first creditor in line to be repaid. A $69 million loan this spring from the company's private investors will be repaid before taxpayers get any money back, according to a creditors' agreement in the bankruptcy filing. Part of stimulus The FBI search added to the criticism of Obama's effort to fund alternative-energy companies. That effort, part of the president's economic stimulus package, has delivered multi-million-dollar loan guarantees to other Bay Area businesses, such as Oakland's BrightSource Energy and SunPower Corp. of San Jose. "President Obama's signature green jobs program went from a darling of the administration, to bankruptcy to now the subject of an FBI raid in a matter of days," U.S. Reps. Fred Upton of Michigan and Cliff Stearns of Florida said in a joint statement. The two Republicans, both on the House Energy and Commerce Committee, opened an investigation into Solyndra's loan in February but said on Thursday that they did not receive advance notice of the raid. "There is much to learn as the investigation moves forward, and it is imperative that the American taxpayers are not paying the price for the sins of Solyndra," their statement said. The committee's two ranking Democrats called on Solyndra's CEO, Brian Harrison, to testify next week at a hearing on the company's loans. They hinted that Harrison had misled them in the past. "Less than two months ago, Mr. Harrison met with us and other committee members to assure us that Solyndra was in a strong financial position and in no danger of failing," wrote Reps. Henry Waxman, D-Los Angeles, and Diana DeGette, D-Colo., in a letter to Stearns. "He did not convey to us the perilous condition of the company, and the committee should know why." Financial red flags The hearing, by the energy and commerce committee's investigative arm, is scheduled for Wednesday. While the plant closure came as a surprise to Solyndra employees, the company's finances had raised red flags in the past. Last year, the company canceled plans for a $300 million initial public stock offering, after an analysis by PricewaterhouseCoopers questioned its financial health. Later in the year, the company closed its original Fremont facility and laid off 40 employees. In February, the Energy Department agreed to restructure Solyndra's loan, giving the company more time to pay the government back. "Ultimately, the choice was between imminent liquidation or giving the company and its workers a fighting chance to succeed," department spokesman Damien LaVera wrote Thursday in an e-mail. The company closed without giving the advance notice to its workers that many large companies must provide under federal and state law. The company said it believed it was exempt from notifying its 968 full-time and 211 contract workers under a loophole in the Worker Adjustment and Retraining Notification Act. Still, one of the company's engineers filed a class-action suit against Solyndra last week, seeking 60-days pay and benefits.