WASHINGTON — Judicial Watch announced today that it has filed lawsuits against the Obama administration, which the public interest group alleges is in a “cover-up mode,” to obtain records on the taxpayer-funded government loan to the now-bankrupt green energy company Solyndra.
Judicial Watch, which investigates and prosecutes government corruption, said it filed the Freedom of Information Act (FOIA) suits against the Department of Energy and Office of Management and Budget.
Also today, Republicans investigating the company released new emails today that they say reveal that the California company was in a mutinous crisis in the weeks leading up to President Barack Obama's visit to the company on May 25, 2010.
Judicial Watch said today’s suits are a follow-up to FOIA requests it filed on Sept. 5 seeking information related to any and all federal officials’ communications regarding loans and records to Solyndra, several related companies, and investors.
“Both agencies have acknowledged receipt of Judicial Watch’s FOIA requests,” Judicial Watch said in a statement issued regarding the suits. “The Department of Energy provided two compact discs on October 7, 2011, that contained a partial response to the request while noting that ‘[a]dditional responsive documents exist and are being reviewed in preparation for public release.’ However, to date no further response has been received.
“The Office of Management and Budget has failed to produce any records responsive to Judicial Watch’s request or demonstrate that responsive records are exempt from production. Nor has it indicated whether or when any responsive records will be produced.”
Judicial Watch President Tom Fitton said: “Our new FOIA lawsuits show the Solyndra scandal is heating up and that the Obama administration is in cover-up mode. The American people are set to lose $535 million dollars and want to know why it happened. Obama administration lies and potential criminal misconduct by high-ranking government officials make this a scandal of the first order.”
Meanwhile, according to the new emails regarding the period before Obama’s visit, prices for solar panels were in free-fall and the company's chief executive officer was bickering with customers unhappy with the amount of electricity produced by the cylindrical panels he invented.
An initial public offering was on the skids, and finally, there was a "mutiny" by the company's entire executive team, who flagged the crisis to the company's board of directors.
The emails between senior advisers to George Kaiser, a major investor in the company, provide the best view yet into how problems took root early at Solyndra.
The company had received a $535 million federal loan guarantee in 2009 and was held up by the Obama administration as an example of how it could help create green jobs.
Behind the scenes, Kaiser's Argonaut Private Equity was trying to right the flailing company. "To put it bluntly our poster child of private equity is acting up something fierce," a senior official from the George Kaiser Family Foundation said in an internal email dated May 8, 2010, warning Solyndra's long-term business plan was in jeopardy.
The new emails highlight how the government backed a company that was in trouble from its early stages, giving more fuel to critics who believe the government threw good taxpayer money after bad.
Energy Secretary Steven Chu's top adviser on stimulus projects brushed aside White House questions about financial red flags ahead of Obama's May 25 visit.
The investment has become politically embarrassing for the administration in the 2012 presidential election race. Last month, Republicans grilled Chu about why he approved the restructuring plan, which kept the company going after it ran out of cash in late 2010.
Chu has staunchly defended his department's decisions as trying to get the best return for taxpayers. The department's inspector general, an independent watchdog, is probing the loan, with help from the FBI. The House Energy and Commerce Department has been investigating the loan since February, collecting more than 250,000 pages of documents from government departments, the White House and private investors.
The White House and Energy Department did not immediately comment on the emails.
Solyndra got the loan in 2009, the first company to receive funding under a program that was a top priority for the newly minted administration. Between November 2009 and February 2010, it became clear that subsidized Chinese solar panel manufacturers were undercutting higher-cost Solyndra, the e-mails from private investors said.
By April, Solyndra Chief Executive Chris Gronet had "burned a lot of bridges" with customers, said Steven Mitchell, managing partner with Argonaut Private Equity, in an internal e-mail. "Gronet was unwilling to accept that the market was forcing a lower price — he reacted unilaterally by forcing his sales people to maintain high pricing in spite of customers' pleas to 'help them out,"' Mitchell wrote.
At the same time, existing customers were "disgruntled" because panels they had bought from Solyndra were not producing as much electricity as promised. "Unfortunately, Gronet again took a unilateral stance and over the objections of his sales and marketing folks to argue with customers over their data set or power readings — Gronet clearly never learned the 'customer is always right' slogan," wrote Mitchell, who had a seat on the company's board of directors.
That was the last straw before his executive team demanded a "derating" in the panels by 3.5 percent, another move that hurt the company's revenues.
"It took a full mutiny by management to bring this to the board's attention," Mitchell said.
Gronet's lawyer could not immediately comment about the emails on Thursday.
Argonaut first told the Energy Department about Solyndra's revenue problems between April and May 2010, Mitchell said in a November 2010 e-mail to Kaiser, a billionaire oilman and fund-raiser to Obama during last election.
After the initial public offering was withdrawn from the market in June, Solyndra hired a new CEO, Brian Harrison, and Gronet became the chairman of the board. It would have looked bad to fire Gronet, the founder, who had a good relationship with the Energy Department and was the face of the company in Washington, where the company wanted to focus more of its sales efforts, the Argonaut emails said.
"He has star power in DC and we need our government to step up if at all possible," one email said. The company was counting on a second loan guarantee from the Energy Department for $469 million, but ultimately it was not approved.
By June, Solyndra was working with a Washington lobbying firm on a strategy to get government contracts with "Buy America" procurement rules that would give its panels an advantage, the emails showed. "Getting business from Uncle Sam is a principal element of Solyndra's channel strategy," an unidentified official said in an Aug. 10 email provided to Republican investigators by Argonaut.
Gronet stayed on as chairman through Aug. 19, 2011, when the company had run out of cash, and only weeks before it filed for bankruptcy.
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