Advisers warned President Obama to distance himself from Solyndra | The Salt Lake Tribune
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Advisers warned President Obama to distance himself from Solyndra

Washington • Administration officials and outside advisers warned that President Barack Obama should consider dropping plans to visit a solar start-up company in 2010 because its mounting financial problems might ultimately embarrass the White House.

"A number of us are concerned that the president is visiting Solyndra," California investor and Obama fundraiser Steve Westly wrote to Obama senior adviser Valerie Jarrett in May 2010. "Many of us believe the company’s cost structure will make it difficult for them to survive long term … I just want to help protect the president from anything that could result in negative or unfair press."

The warning, which did not persuade the White House to drop the Obama factory visit, was detailed in emails released Monday by the Democratic minority on the House Energy and Commerce Committee. The panel is investigating a $535 million government-backed loan to the now-shuttered company.

Democrats said the e-mails demonstrate that there was no political favoritism for Solyndra or for the Obama fundraiser whose family foundation held an interest in the company. But the internal messages revealed for the first time the high level of White House interest in the start-up and its faltering finances after the Energy Department backed it with $535 million in loans.

On Monday, Obama made his first public comments about Solyndra’s collapse, saying that he does not regret supporting or visiting the company as part of his administration’s backing of clean-energy companies.

"Now, there are going to be some failures," he told ABC News and Yahoo in an interview streamed live online. "Hindsight is always 20/20. It went through the normal review process, and people thought this was a good bet."

Since Solyndra filed for bankruptcy on Aug. 31, leaving taxpayers on the hook for almost half a billion dollars, the White House has said that decisions about supporting the solar-panel manufacturer were made by career employees at the Energy Department, starting in the George W. Bush administration.

But the e-mails capture the vigorous debate within the Obama White House about whether the company was a smart bet. They also highlight unease inside the West Wing about whether the president’s initiative to support clean energy was ill-equipped to pick winners, or could, as some hoped, help validate Obama’s use of $80 billion in stimulus funds to build a clean-energy industry.

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Obama’s Energy Department had provided Solyndra with a government-backed loan in 2009. A year later, when the company ran out of money, the agency agreed to refinance Solyndra’s loan and continue paying out federal funds.

What was once a showcase of that Obama clean-energy initiative is now a political crisis for the White House. Despite the federal largesse, Solyndra’s sudden shutdown left 1,100 employees out of work and many of its assets up for auction.

A week later, FBI agents raided the company’s headquarters in a criminal probe looking at potential accounting fraud.

In spring 2010, before Solyndra’s fortunes turned, the White House highlighted the administration’s investment in the company in a "Main Street Tour," to show taxpayers how their stimulus dollars had been put to work.

"Rahm is very pleased," one staffer wrote, referring to then-Chief of Staff Rahm Emanuel and the decision to have Obama visit Solyndra in May 2010. Emanuel, now the mayor of Chicago, has said he does not remember discussions about the company.

But the administration was being waved off by worried venture capitalists, some of whom were major Obama fundraisers and also advised the White House.

Westly, an investment-fund president, warned Obama senior deputy Valerie Jarrett days before to reconsider whether the president should visit the company that May. He cautioned that Solyndra’s financial problems might worsen and embarrass Obama later.

Westly’s fear stemmed from a warning issued by Solyndra’s outside auditors the previous month, in April. They noted that the company was burning through cash rapidly and might not remain a "going concern."

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Energy » Backers had doubts about company, which got a $535M loan and is now shuttered.

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