Emails Undermine White House, Energy Dept. Abound Claims

October 31, 2012
By

PAPER TRAIL: Email exchanges suggest that political advantage was an important reason that Abound Solar was the recipient of loan guarantees in 2010

WASHINGTON  — For months, Obama administration officials suggested that politics was not the most important factor in awarding a $400 million loan guarantee to a Colorado solar panel maker two years ago.

In their testimony to Congress last summer, two Department of Energy employees did not deny that politics might have played a role in the decision to give a line of credit to Longmont-based Abound Solar, but said economic and fiscal reasons played larger roles.

“Marketplace considerations were the deciding factor in the government’s decision,” David G. Frantz, acting executive director of the loan programs office at the Department of Energy, told a House Energy and Commerce subcommittee on July 12.

“(T)o suggest hat anyone who worked on these was not focused on protecting taxpayers is flatly inaccurate,” Jonathan M. Silver, the former executive director of the loan programs office at the Energy Department, said in his prepared remarks to the House Committee on Oversight and Government Reform on July 18.

But President Obama’s remarks in a KUSA interview Oct. 26 departed from those of Energy Department officials. Obama denied that politics played any role in the late 2010 decision. “And these are decisions, by the way, that are made the Department of Energy, that have nothing to do with politics,” he said to 9News anchor and investigative reporter Kyle Clark.

Yet recent email exchanges between Silver and Energy Department officials indicate that on the contrary, political advantage was an important reason that Abound Solar was the recipient of loan guarantees in 2010.

As Todd Shepherd of CompleteColorado.com reported, on June 25, 2010 Silver wrote to a key DOE official to chide him for neglecting to tell a Department of Treasury official that the Obama White House considered a loan guarantee to Abound Solar a top priority.

“You better let him [Ian Samuels] know that the White House wants to move Abound forward. Policy will have to wait unless they have a specific policy problem with Abound,” Silver wrote to James C. McCrea, senior credit adviser at the loan program office.

Eight days later, Obama announced during his weekly radio address that the Energy Department had awarded Abound Solar a loan guarantee.

Silver’s reference to “Policy” might be to the White House’s Domestic Policy Council. A phone call to Silver’s home was not returned. A White House spokesperson referred an inquiry to the Department of Energy.

Abound Solar received a $68 million federally-backed loan guarantee. It unable to accept the remaining $332 million line of credit because of economic troubles tied to the falling prices of polysilicon solar panels.

In March, the company announced it would lay off 280 workers from its Longmont plant. In early July, it said it would file for bankruptcy and lay off its remaining 125 employees.

Even before Silver’s June 2010 email was made public, House Republicans had suggested that politics played a key role in the awarding of the loan guarantee to Abound. In March, the House Oversight Committee released a 74-page report, “The Department of Energy’s Disastrous Management of Loan Guarantee Programs,” that Fitch Ratings had assigned a junk credit rating of “B” to Abound Solar before its loan guarantee was finalized in December 2010. Obama administration officials noted in their congressional testimony in July that Abound Solar had raised more than $300 million in private equity.

The House Oversight report also noted that Patricia Stryker, a Fort-Collins based donor to progressive causes and top “bundler” to Obama’s presidential campaign in 2008, sat on the advisory board of Abound Solar. Obama administration officials said that Indiana Republicans, including Gov. Mitch Daniels, had petitioned the Department of Energy to award Abound Solar a loan guarantee to enable the firm to build a plant in Tipton, Indiana.

Despite the inconsistency between Obama’s comments to KUSA and Silver’s email, the race remains close.  Most polls have found that while Americans trust Gov. Mitt Romney to handle the economy better than Obama, the President receives higher marks on foreign policy, social issues, and Medicare.

Comments made by visitors are not representative of The Colorado Observer staff.

2 Responses to Emails Undermine White House, Energy Dept. Abound Claims

  1. gary omalley
    November 1, 2012 at 8:46 pm

    Thank you. One more example of cronie capitalism. Our founders said that an immoral society (lack of integrity) guarantees eventual tyranny.

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