Banking firm suggested Solyndra bailout: e-mail

By Matthew Daly, AP

WASHINGTON–Days before a solar panel maker collapsed, the Obama administration considered a bailout that would have provided an infusion of cash and made the federal government a part-owner of the company. Officials rejected the plan, which was recommended in August by the investment banking firm Lazard Ltd. Lazard was paid US$1 million for analyzing options related to the faltering company, Solyndra Inc.

The bailout plan considered by the U.S. Energy Department would have converted much of the U.S. loan to equity in the company worth as much as 40 percent, released e-mails show. Details of the bailout plan were among nearly 1,200 pages of documents released by the U.S. on Wednesday, hours before a House subcommittee was set to vote on a plan to subpoena White House documents related to Solyndra. The Republican-controlled House Energy and Commerce Committee said a subpoena was necessary because the White House has denied or delayed requests for thousands of documents related to Solyndra. The California company received a US$528 million federal loan before filing for bankruptcy protection and laying off 1,100 workers. Lazard was hired to look at Solyndra’s financing after the company received the loan in 2009 and US$69 million in private money earlier this year in a restructuring deal approved by the Obama administration. Without an infusion of new cash, Lazard wrote in an Aug. 17 memo to the Department of Energy (DOE), Solyndra was almost certain to fail, which would “likely result in little recovery to the DOE.” The department rejected the refinancing plan sometime after Aug. 28, and Solyndra shut its doors on Aug. 31. Congressional Republicans have been investigating Solyndra’s bankruptcy amid embarrassing revelations that federal officials were warned it had problems but nonetheless continued to support it. President Barack Obama visited the company and praised it publicly. A DOE spokesman said the administration was cooperating with House investigators and has provided more than 80,000 pages of documents. The administration turned over more than 15,000 pages of documents to the committee this week, including about 1,200 pages of communications between the White House and the DOE, department spokesman Damien LaVera said. An Energy and Commerce subcommittee was to vote Thursday on subpoenas for White House Chief of Staff William Daley and Bruce Reed, chief of staff to Vice President Joe Biden. Daley announced last week that he had ordered an independent review of similar loans made by the Energy Department. Energy Secretary Steven Chu has said he welcomes the White House review. Chu is scheduled to testify Nov. 17 before the energy panel.