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Why Obama Ignored Warnings to Stay Away from Solyndra

Obama tours Solyndra plant in May 2010
//yeti-cir-test.s3.amazonaws.com/uploaded/images/2010/7/obama-solyndra/original/obama at solyndra.jpg
Obama tours Solyndra plant in May 2010
 
Last-minute plea from Silicon Valley venture capitalist set off a flurry of emails among Obama advisors

Updated Oct. 3, 2011 at 10:44 p.m.

Despite multiple warnings, including a last-minute plea from one of President Barack Obama's biggest Silicon Valley supporters, key political advisers chose not to cancel the president's May 2010 visit to Solyndra, according to excerpts of internal White House emails released Monday.

The excerpts show the advisers willingly took on the risk of associating the president with a company that stood on shaky financial footing in order to "promote cutting edge, new economy industries."

At least one of those advisors had co-authored a memo to the president eight months earlier outlining concerns about the Department of Energy program that approved $527 million in federal loans to the solar panel maker, which declared bankruptcy last month.

During his visit, Obama declared Solyndra to be “a testament to American ingenuity and dynamism.”

Republicans have used the president's visit to criticize his economic policies and the stimulus program that funded Solyndra's loan. The Fremont-based solar panel declared bankruptcy last month

Democrats on the House Energy and Committee, which is investigating how Solyndra got the loan, released the email excerpts to counter Republican claims that the White House rushed the loan's approval because one of the company's lead investors had ties to a major contributor to Obama's 2008 presidential campaign.

The Democratic members of the committee wrote, "The documents the Committee has received do not support the allegations of political favoritism."

The Democratic members portray the Solyndra loan as the result of a battle between the Office of Management and Budget, which had raised serious concerns about the Department of Energy loan program, and the DOE.

"In hindsight, it is apparent that the predictions of officials at OMB about Solyndra were right and those of the officials at DOE were wrong," the Democrats wrote.

The Democrats also say that in October 2010, Larry Summers, the director of the National Economic Council; Ron Klain, Vice President Joe Biden's chief of staff; and Carol Browner, director of the White House Office of Energy and Climate Change, wrote a memo to Obama, "elevating concerns about the loan guarantee program and the conflict between DOE and OMB." The memo outlined "four different options to the President, ranging from significantly curtailing OMB’s involvement on one extreme to terminating the loan guarantee program on the other."

The Democrats did not reveal the president's response to that memo.

But the email excerpts show that a day before the president's visit to Solyndra, Valerie Jarrett, senior advisor to the president, received a note from a top Silicon Valley supporter warning the president to stay away from the company.

That note set off a flurry of emails among top White House staffers and federal officials.

In the note, Steve Westly, a venture capitalist and former California state controller, wrote:

“I just want to help protect the president from anything that could result in negative or unfair press. If it’s too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.”

The excerpts show that Jarrett responded by emailing Klain. Klain, in turn, contacted a Department of Energy official, who replied:

“Bottom line is that we believe the company is okay in the medium term, but will need some help of one kind or another down the road.”

Klain forwarded that message to Jarrett, who replied:

“I’m comfortable if you’re comfortable.”

Klain responded:

“The reality is that if POTUS [The President of the United States] visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012 – but that to me is the reality of saying that we want to help promote cutting edge, new economy industries.”

Weeks before the president's visit to Solyndra, when the White House was still planning the trip, OMB staff expressed concern over the company's financial health.

In an email, one staffer wrote:

"Hope it doesn't default before then."

Another email from a staffer said:

"I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future."

The email excerpts also reveal that then-White House Chief of Staff Rahm Emanuel was “very pleased” with the decision to visit Solyndra, in part because it fit well with the president's ongoing "Main Street Tour" to highlight American manufacturing.

In his visit to Solyndra, Obama expressed none of the uncertainty that had been raised by his advisors and OMB officials.

In a speech, the president repeated Solyndra’s own projections for its growth.

“Here at this site, Solyndra expects to make enough solar panels each year to generate 500 megawatts of electricity. And over the lifetime of this expanded facility, that could be like replacing as many as eight coal-fired power plants,” Obama said.

He declared that Solyndra was “leading the way toward a brighter and more prosperous future.”

Obama's Full Speech To Solyndra (May 26, 2010)
Source: lhghvideo

In interviews, veteran political observers said they weren’t surprised that Obama stayed on message despite the warnings.

“Sometimes those processes go awry, because it takes on a certain momentum that can’t be stopped," said Gary South, a longtime Democratic strategist based in Los Angeles.

“It’s almost impossible to cancel anything at the last minute unless there’s bad weather or a national emergency,” agreed Jeff Kiernan, who did logistics work for Obama until November 2009.

Kiernan said when he promoted the stimulus package for Obama in 2009, he would sometimes be given a point on a map and told to find an appropriate spot for the president to visit within a 30-mile radius.

But, he said, with Solyndra, the story was likely different. “There were decisions made near the top,” he said.

Speaking to ABC News on Monday, Obama did not back down from his administration's support for Solyndra. 

"Hindsight is always 20/20," Obama told "Good Morning America" anchor George Stephanopoulos in an interview broadcast online Monday. "It went through the regular review process, and people felt that it was a good bet."

Correction: A previous version of this article incorrectly stated that Valerie Jarrett had co-written a memo in October 2010 with Larry Summers and Ron Klain. Carol Browner was the third co-author.

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