September 11, 2011
California, U.S.

FBI raids ‘connected’ energy firm Solyndra

By MATTHEW MOSK and RONNIE GREENE, ABC NEWS and iWATCH NEWS, abcnews.go.com 8 September 2011

The FBI has confirmed to ABC News that federal agents are conducting a search this morning at the offices of Solyndra, the now-bankrupt California solar power company that received $535 million in federal loans under a green energy program touted by President Obama.

The raid is part of a joint operation between the FBI and the Department of Energy’s Office of Inspector General, Public Affairs Specialist Peter D. Lee said Thursday morning. Lee said he could not disclose the reason for the raid because the matter is under seal. Karen Sulier, a spokeswoman for the Department of Energy’s inspector general’s office, confirmed its part in the probe.

Beginning in March, ABC News, in partnership with iWatch News/the Center for Public Integrity, was first to report on simmering questions about the role political influence may have played Solyndra’s selection as the Obama administration’s first loan guarantee recipient. Federal auditors had flagged the loan, saying some applicants had benefitted from special treatment.

One of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama “bundler,” raising money during the 2008 presidential campaign.

The bundler, George Kaiser, has declined to comment. His firm, Argonaut Ventures and its affiliates have been the single largest shareholder of Solyndra, according to SEC filings and other records. The company holds 39 percent of Solyndra’s parent company, bankruptcy records filed Tuesday show.

Energy officials have repeatedly denied those allegations, saying the selection process was even handed. Until two weeks ago, the Obama administration held out Solyndra as a model for its green energy program, which was devised to create jobs and spur investment in cleaner sources of energy. President Obama personally visited the Solyndra plant last year, and his Energy Department made it the first to win approval of a federal loan guarantee. The $535 million federal investment enabled the company to build a sprawling manufacturing facility.

Last week, Solyndra abruptly shut its doors, announced it was laying off 1,100 workers, and then filed for bankruptcy. Executives with the company and federal energy officials said the company’s failure was the result of intense competition from China.

But questions about the federal support for Solyndra continued to grow. In May, ABC News and iWatch News reported that officials at the Office of Management and Budget had raised concerns about the risks of the Solyndra loan, and that the Energy Department had been forced to restructure the deal.

On Wednesday, ABC News and iWatch News reported that Solyndra had also benefitted from the terms of a loan with the Federal Financing Bank. The extremely low interest rates for its loan were the lowest of any Energy Department recipients.

“The FBI is here this morning executing a search warrant,” Solyndra spokesman David Miller told iWatch News Thursday. Asked what records the agency was seeking, Miller said: “I can’t talk about that. I don’t know.”

He said the search took the company by surprise. “We’ll cooperate with them and given them whatever they are looking for, but certainly it was a surprise,” Miller said. “I came to work this morning and they were here and I’ve been sorting it out.”

About the inspector general’s involvement, Miller said, “I don’t know if that’s true. I’ve only dealt with the FBI agents who were here on site.”

Energy officials continued to maintain their decisions about the company were all above board.

“The Department of Energy conducted exhaustive reviews of Solyndra’s technology and business model prior to approving their loan guarantee application,” said LaVera,. “Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment.”

Republicans in Congress launched their own investigation into the loan program earlier this year, and ABC News confirmed this week that the senate also has questions about the Solyndra loan.

“How did this company, without maybe the best economic plan, all of a sudden get to the head of the line?” said Rep. Fred Upton, R.-Michigan, chairman of the House Energy and Commerce Committee, in an ABC News interview last week. “We want to know who made this decision … and we’re not going to stop until we get those answers.”