Solyndra misled government to secure $535m loan guarantee, investigation finds

first_imgSolyndra misled government to secure $535m loan guarantee, investigation findsFour-year probe finds that the bankrupt solar company misrepresented facts and omitted key information in securing federal loan guarantee under stimulus program. August 27, 2015 Ian Clover Legal Manufacturing Markets Markets & Policy Share A four-year investigation into defunct solar firm Solyndra – a former CIGS and thin film manufacturer that went bankrupt in August 2011 – has concluded this week that the company misled the government in order to secure $535 million in loan guarantees. According to the probe, a report of which was released by the U.S. Energy Department’s inspector general Wednesday, leading officials at the company misrepresented facts and omitted key information as Solyndra looked to become the first company to secure federal loan guarantees under the stimulus package that was created in 2005 under George W. Bush and extended by the Obama administration in 2009. Shortly after receiving the loan, Solyndra went bankrupt – costing the U.S. taxpayer an estimated $500 million, and drawing criticism from Republicans and other skeptics of the stimulus program. The inspector general’s report this week was also critical of the Energy Department, claiming its due diligence work to be “less than fully effective”, and critical of a culture that pressured employees to grant loan-guarantee applications. However, the bulk of the blame lies squarely at the feet of Solyndra officials, the report concludes, stating: “In our view, the investigative record suggests that the actions of certain Solyndra officials were, at best, reckless and irresponsible or, at worst, an orchestrated effort to knowingly and intentionally deceived and mislead the department.” Example of failingsSolyndra secured the $535 million in funding after the expansion in 2009 of the stimulus package, with Obama personally visiting the company’s manufacturing plant in 2010 to herald Solyndra as a thriving example of the efficacy of the stimulus bill. By September the following year, however, the fab lay idle, with more than 1,100 staff laid off and bankruptcy protection proceedings working their way through court. In response to the probe’s findings, Miles Ehrlich – the representative of former Solyndra CEO Chris Gronet – remarked that Solyndra failed not because of fraud of misrepresentation, but rather was a victim of the dumping practices of China’s state-backed solar firms. “Solyndra executives were completely truthful and accurate in their representations during this loan process, and the DOE was never misled about Solyndra’s business or prospects,” read a statement issued by Ehrlich’s law office. At the beginning of the year, and following a series of interviews and witness examinations by the FBI, the Justice Department confirmed that it would not be bringing criminal proceedings to any of Solyndra’s former officials. The report did reveal that the DOE relied at times on third-party evaluations during its Solyndra analysis. One particular case involving engineering firm R.W. Beck Inc. is cited in the report. The firm issued a solar panel market analysis based on company representations that stated it had $1.4 billion in revenue under contract up to 2012, adding that Solyndra’s “firm” sales contracts supported this financial model. However, by the time Beck’s final report came to pass, Solyndra had offered price concessions to all four of its customers. “Solyndra’s failure to directly disclose these significant material changes in its contractual relationships distorted the view the department and its consultants had of the market for Solyndra’s products,” said the inspector general. A representative from credit ratings agency Fitch was employed by Solyndra for a credit assessment and, upon asking the company whether any customers had received price concessions, was told firmly that they had not. Had Fitch been aware of such practices, the firm told investigators, it would have downgraded Solyndra’s credit rating. “The red flags about Solyndra’s financial condition and the turbulence in the solar market were there for DOE to see when it reviewed Solyndra’s application in 2009. DOE staff and (Office of Management and Budget) staff noted these concerns at the time the loan guarantee was under consideration,” the congressional report concluded.Popular content The Hydrogen Stream: 20 MW green hydrogen plant in Finland, two Australian projects move forward Sergio Matalucci 20 April 2021 pv-magazine.com Storegga, Shell and Harbour Energy want to set up a 20 MW blue hydrogen production facility in the U.K. Australia’s Origin Energy wants to build a hy… Enabling aluminum in batteries Mark Hutchins 27 April 2021 pv-magazine.com Scientists in South Korea and the UK demonstrated a new cathode material for an aluminum-ion battery, which achieved impressive results in both speci… ITRPV: Large formats are here to stay Mark Hutchins 29 April 2021 pv-magazine.com The 2021 edition of the International Technology Roadmap for Photovoltaics (ITRPV) was published today by German engineering association VDMA. 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