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Solyndra’s Finance Chief No Stranger to Scandal

 
W.G. Stover was previously at the center of a price-fixing case

Updated Sept. 23, 2011, 8:47 a.m.

Before he became Solyndra's chief financial officer, Wilbur G. Stover was at the center of one of the largest price-fixing scandals in U.S. history.

From 1994 to 2007, Stover was CFO of Micron Technologies Inc., a maker of computer memory chips. During that time, the Justice Department investigated Micron and four other companies for colluding to drive up the price of memory in violation of federal antitrust laws.

"This was a big deal case," said Robert Lande, a law professor at Baltimore University who has written extensively on the case. "It was price-fixing on a crucial component that everybody uses, and they got together and fixed prices in what was a blatant violation of antitrust laws."

To date, the five companies — Micron, Samsung, Infineon, Hynix Semiconductor and Elpida Memory — have paid $1.8 billion in civil and criminal penalties, and 37 people at the firms have served at least one day in jail.

But only one Micron employee went to jail. Early on, the company entered into the Justice Department's Corporate Leniency Program, which grants immunity from prosecution to one player in a price-fixing scheme in exchange for testimony against the other entities involved.

"From the government's point of view, that program has been incredibly successful, but from the defense's point of view there would be many who are critical of it, because some people observe that the big fish get a free ride, and the small fish end up getting prosecuted," said Ross Nadel, former chief of the Economic Crimes Unit at the U.S. Attorney's Office in San Francisco.

At the end of 2007, Stover left Micron, where his total yearly compensation was $1.9 million. He took the CFO job at Solyndra for $831,000 in salary, bonuses and benefits.

Stover is currently managing the company's bankruptcy proceedings.

"It's certainly a cause for concern" to see Stover connected to a second company under investigation, said Joseph Harrington, an economics professor at Johns Hopkins University who has studied the Micron case. "If you start seeing mutually reinforcing evidence that the same person was on the scene when something bad happened, you start to think things aren't independent of one another."

Last month, less than two years after it secured a $535 million loan guarantee from the U.S. Department of Energy, Solyndra shut down its headquarters and laid off 1,100 workers. Eight days later, the FBI searched the company's facilities and visited the homes of three executives, including CEO Brian Harrison but not Stover.

Even before the shutdown, House Republicans had already begun asking questions about why the federal government had guaranteed a loan to a company with questionable financial prospects.

On Friday morning, Stover and Harrison appeared before the House Energy Committee's Oversight and Investigations Subcommittee at a hearing titled "From DOE Loan Guarantee to Bankruptcy to FBI Raid: What Solyndra's Executives Knew."

The two refused to answer any questions, invoking their Fifth Amendment rights to protection from self-incrimination.

In a letter to the committee, Stover's San Francisco-based lawyer, Jan Nielsen Little, wrote that the "decision that Mr. Stover would invoke his Fifth Amendment rights was taken with care and deliberation."

Because the FBI has raided Solyndra's offices and "initiated a criminal investigation," Little wrote, "it would be irresponsible for anyone in his position not to do so."

Sydney Lupkin contributed to this report.

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