Friday, 2 September 2011

Solyndra Scandal - six signs. Update: FBI Raid, White house at board meetings, Argonaut in cat bird's seat.

Solyndra was put at the front of the line for money.
The Department of Energy announced support before the reviews were complete.
Solyndra was charged about half the interest other plants were paying in the same subsidized program.
The principal owner was a big fundraiser for Obama.
White House people were personally monitoring the approval steps.
Solyndra was selling below cost.
"Here's the bottom line," Peter Lynch, a longtime solar industry analyst, told ABC News.  "It costs them $6 to make a unit. They're selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan."

Half a billion dollars in loan guarantees.   It is difficult to read this stuff and survive on the hope that a competent administration will be installed in 2012.

Update: Solyndra Headquarters Raided by FBI  Why are we not surprised? (Speculation: Locking the files up with the FBI allows politicians to say they can't supply more information because of the ongoing criminal investigation.)
Update: Detail on Solyndra visits to the White House before the deal.
"According to White House visitor logs, between March 12, 2009, and April 14, 2011, Solyndra officials and investors made no fewer than 20 trips to the West Wing. In the week before the administration awarded Solyndra with the first-ever alternative energy loan guarantee on March 20, four separate visits were logged".
Update Sept. 9th:  White House officials were in the Solyndra boardroom, sitting in on regular meetings. 
Rumor:  Kickback to Democrat campaigns?  Sept 10th.  (From comments:  FBI's intervention will put off an appearance in bankruptcy court.)
Update:  Argonaut got the sweet spot of being first in line ahead of the taxpayer as part of the Feb 2011 $75 million investment deal. They also got the sweet spot of being "Debtor in Possession".  They are both "the belt and the suspenders" and their pants won't be falling down.  They have the most say in how things are disposed of and because a four weeks rush sale is underway, Argonaut is likely to end up with the only deal on the table and able to close the deal using their February investment as the bankruptcy purchase money.   Zero Hedge lays out how it works with help from a bankruptcy specialist.  Must read if you are interested.

Added:  The receivables were sold just before the bankruptcy was declared putting them out of reach of creditors.  "Argonaut Solar" was one of the parties.
Added September 16th:  Is there a second loan just as big?

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