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Tuesday, August 20, 2019

Solyndra execs plead the Fifth

By Michael P. Tremoglie | Sep 26, 2011


WASHINGTON (Legal Newsline) -- Solyndra's top two executives -- CEO Brian Harrison and Chief Financial Officer W.G. Stover Jr. -- invoked their Fifth Amendment rights and refused to answer questions put to them by members of the House Energy and Commerce Subcommittee during a Friday hearing.

Some committee members expressed outrage because they had been assured the two would cooperate with the investigation.

The bankrupt solar energy company based in Fremont, Calif., is being investigated by the committee because it has been alleged that the Obama administration pushed the first stimulus loan to Solyndra despite red flags about the company's financial viability. The loan, in the amount of $535 million, was made in the spring of 2009.

The company had been widely promoted as a stimulus jobs success story. President Obama visited the plant in May 2010. The Obama administration was said to have restructured Solyndra's loan in February 2011 and put venture capitalists at the front of the line, ahead of taxpayers, in the event of bankruptcy. Subordinating the federal government's claim to recoup the taxpayer funds violates the law according to committee members.

Solyndra went bankrupt Aug. 31. The company's offices were raided by the FBI raid on Sept. 8.

"I want to make it clear today, that this Subcommittee's investigation continues," Subcommittee Chairman Rep. Cliff Stearns (R.-Fla.) said during the hearing. "We have been asking questions about this deal since February.

"We will get to the bottom of why this loan was pushed out to a company whose liquidity issues were a 'major issue' to DOE (Department of Energy) staff reviewing the loan back in 2009 - and which ultimately caused its bankruptcy."

He also said that the committee will investigate just how DOE concluded that restructuring the Solyndra deal was more advantageous to taxpayer when documents furnished to his committee indicated that the Office of Management and Budget staff "doubted that it would prevent a Solyndra bankruptcy or result in greater recoveries for the government."

Rep. Fred Upton (R-Mich.) chairman of the Full Committee, told Harrison and Stover during the hearing, "It is a very sad commentary that we met resistance every step of the way of seeking answers to basic questions overseeing the 'approval process' of this project. We had to finally resort to a subpoena and now the outright resistance of getting answers that both of you assured us, only last week, that you'd provide. Let me just warn you and the other folks involved in this taxpayer rip-off. We're not done. No we're not."

Earlier in the week, the Subcommittee requested copies of the communications between DOE and the White House and DOE and the Treasury Department about Solyndra. It also requested documents from Argonaut Private Equity and Madrone Capital Partners, the primary venture capitalists behind Solyndra.

The committee wants all the documentation and communications related to the $535 million loan guarantee, the company's cancelled initial public offering, the $75 million credit facility, the February 2011 loan restructuring, the bankruptcy, and the Obama administration's role.

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