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PolitiFact Florida | St. Petersburg Times
Sorting out the truth in state politics

PolitiFact: Solyndra ad stretches the truth

It was supposed to be an example of the success of President Barack Obama's federal stimulus program.

Instead, the story of Solyndra has devolved into a mess of troubling allegations of pay-to-play politics and political cronyism.

For Obama — whose re-election is not assured — the series of bad headlines could further alienate crucial swing voters. And Republicans know it.

But just what is Solyndra?

And where is the truth in the back-and-forth on Capitol Hill?

• • •

Solyndra formed in 2005 with an idea to create solar cells that didn't require pricey silicon, which promised to make them cheaper than their rivals.

That idea got the attention of the U.S. Department of Energy, which in 2006 invited the company to apply for a new loan guarantee program to help fund the work.

Fast-forward past some government red tape. By early January 2009, Solyndra's loan application had been reviewed by the department's credit committee and returned with a request for further analysis. On Jan. 15, the loan program office said "due diligence" for the Solyndra loan would be completed by March 2009. The money was tagged to build a new factory in Fremont, Calif.

Obama took office Jan. 20, 2009, after Solyndra had applied for a loan but before the government had awarded the company one.

It was Obama's administration that pushed to finish the $535 million loan so it could tout the company as a success of the federal stimulus.

Solyndra got its loan guarantee on Sept. 3, 2009.

At the time, it didn't seem controversial.

As recently as 2010, the company was hailed as a Silicon Valley superstar, ranked a top clean-tech company by the Wall Street Journal and one of the "World's 50 Most Innovative Companies" by a Massachusetts Institute of Technology magazine.

But when the price of silicon plummeted, subsidized Chinese solar panels got even cheaper. That meant Solyndra's nonsilicon solar cells would have an even harder time competing.

Red flags multiplied by February 2011, and the government restructured the loan to rescue the factory project.

Still, Solyndra collapsed in August 2011. Factory employees who worked late the night before, as they often did, found their jobs had evaporated the following morning — with no notice and no severance. An FBI raid followed. Solyndra filed for Chapter 11 bankruptcy protection on Sept. 6.

Solyndra had fallen far and fast. Its unique solar cells had once attracted more than $1 billion from private investors. Now taxpayers could lose hundreds of millions of dollars.

Obama's 'friends'

With that critical background out of the way, we can dive into three claims swirling in the Solyndra debate.

The first one comes from a new TV ad airing in Florida portraying Obama as a politician who showered millions of taxpayer dollars on his friends.

The ad is from Americans for Prosperity, a group that works closely with tea party activists and has been funded by the conservative Koch family.

According to them, Obama gave "half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy."

We'll focus here on two points, that Obama helped his friends and that the White House knew Solyndra was heading toward bankruptcy.

So who owns Solyndra?

Four venture capital firms own nearly 70 percent of the company, according to bankruptcy filings. Argonaut Ventures owns the largest stake, with nearly 40 percent, while Madrone Partners own 13 percent. Two others own about 9 percent and 7 percent.

The ad's fine print refers to a Daily Caller story focused on "shareholders and executives" of Solyndra who "fundraised for and donated to the Obama administration to the tune of hundreds of thousands of dollars." The largest contributor listed in the story: George Kaiser, who raised $50,000 to $100,000 for Obama's campaign.

Kaiser, though, is neither a shareholder nor an executive of Solyndra. The Tulsa, Okla., oil billionaire is the donor behind the George Kaiser Family Foundation. The foundation focuses on poverty, community health, civic enhancement — and national energy policy. The foundation, rather than hire an outside financial adviser to handle its investments, does it mostly in-house, through a subsidiary. That subsidiary is Argonaut Ventures, the largest investor in Solyndra.

Kaiser isn't on the foundation's board or Argonaut's or Solyndra's.

Meanwhile, Madrone Partners, which owns more than 10 percent of Solyndra, is an investment vehicle for another family — the Waltons of Walmart fame. While some argue that Walmart is no longer a conservative company that focuses solely on GOP causes, a search of Federal Election Commission records for contributions from people who list Madrone as an employer still shows most cash benefited GOP recipients.

As for the White House knowing Solyndra was "on the path to bankruptcy," the ad suggests that the Energy Department thought Solyndra would run short on cash as it built its new factory but approved the loan anyway.

Emails, written in August 2009 as the department was drafting the final loan terms, support the idea to a minor extent.

The emails got into details about the project's "cash balance" and "working capital requirements."

But other emails, including one from a "career agency official who served in the Bush administration," played down any concerns, noting that equity investors — who had already pumped more than $1 billion into the company — wouldn't let a short-term cash crunch keep Solyndra from finishing its project.

And in fact when Solyndra later restructured its Energy Department loan, private investors did throw in $75 million to keep the company on track.

What does it all mean?

This ad is like many other political ads we've seen — in that it takes some shreds of truth and stretches them to make the sharpest possible political point.

We rate the claim Mostly False.

How loan started

As we mentioned, the idea of the loan program originated in 2006, with the administration of President George W. Bush.

That puts this claim from White House senior adviser David Plouffe on fairly solid ground.

He said: The loan guarantee program that helped Solyndra "was a program that was supported by President Bush."

The program was indeed created on Bush's watch by a law he signed and promoted.

The program, however, grew under the Obama administration, which ultimately awarded Solyndra's loan guarantee under a new section of the law created by the stimulus.

So we found Plouffe's statement to be Mostly True.

Whistle at work

Another claim we heard came from Republican presidential candidate Mitt Romney, who told a crowd that Solyndra "had robots that whistled Disney songs."

"I'm not kidding," Romney added for emphasis.

Turns out, Romney got this almost right, though he perhaps missed the point of why Solyndra robots would be "whistling" music.

Automated guided vehicles are common in warehouses and factories, as a labor-saving device.

Some of them come preloaded with melodies as an alternative to beep-beep-beep — to boost workers' attention to them, and thus safety. The Solyndra vehicles may have played some Disney tunes along with their movie medleys and Japanese folk songs, but it wasn't their most memorable feature.

So that rated Half True.

These rulings have been edited for print. Read the full versions at PolitiFact.com/Florida.

PolitiFact: Solyndra ad stretches the truth 11/25/11 [Last modified: Sunday, November 27, 2011 1:42pm]
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