WASHINGTON | Fri Oct 7, 2011 11:00pm EDT
(Reuters) – An Obama administration appointee at the Energy Department pressed White House analysts to sign off on a $535 million loan to Solyndra even though his wife worked for the failed solar panel maker’s law firm.
The revelation, contained in a new batch of internal emails released on Friday, adds new drama to a heated political battle over government backing for Solyndra, which has filed for bankruptcy and has been raided by the FBI.
The emails show frequent inquiries from Steven Spinner, who was an adviser to the Energy Department on its use of economic stimulus funding to spur clean energy technology, on the Solyndra loan, according to a report in the New York Times.
On Sept 29, the Energy Department had posted a “fact check” on Spinner’s involvement in the Solyndra case on its website, explaining that he started his job after the company received conditional approval for its loan application.
The department said Spinner “was recused from engaging in any discussions on decisions affecting specific loan applications in which his spouse’s law firm was involved out of concern for the appearance of a conflict of interest.”
Allison Spinner is a partner at law firm Wilson Sonsini Goodrich & Rosati, which represented Solyndra.
Energy Department spokesman Damien LaVera said on Friday that the department’s ethics officer had cleared Spinner to “oversee and monitor the progress of applications,” although he was not allowed to make decisions on loans or their terms.
LaVera noted that Allison Spinner had “agreed not to participate in or receive any financial compensation from her law firm’s work on behalf of any loan program applicant.”
Neither Wilson Sonsini Goodrich & Rosati nor Steven and Allison Spinner could be immediately reached for comment.
“BREATHING DOWN MY NECK”
The White House, which has aggressively defended decisions made on the loan guarantee, turned over the emails on Friday to the House of Representatives Energy and Commerce Committee, which has been probing the loan for the past eight months.
“The paper trail released by the White House portrays a disturbingly close relationship between President Obama’s West Wing inner circle, campaign donors, and wealthy investors that spawned the Solyndra mess,” said Fred Upton, the panel’s chairman, and Cliff Stearns, the head of the investigation, in a statement.
The emails show Spinner discussed the pending final decision often with Solyndra officials, Energy Department colleagues, and the White House budget office, the New York Times said.
“I have the O.V.P. and W.H. breathing down my neck on this,” Spinner wrote, referring to the office of the vice president and the White House in an email to an Energy Department loan officer.
Spinner, who advises clean tech companies in San Francisco, was an Obama fundraiser during the 2008 presidential campaign, the newspaper said.
TREASURY DEPARTMENT WAS CONCERNED
Other emails showed top U.S. Treasury Department officials were alarmed about an Energy Department decision to restructure the company’s debt earlier this year, when it ran out of cash.
The plan allowed some $75 million in private investment to be ranked ahead of the government in the event of bankruptcy. That private fund was backed by a prominent Obama fundraiser, George Kaiser.
Mary Miller, Treasury’s assistant secretary for financial markets, emailed the White House budget director two weeks before Solyndra filed for bankruptcy, complaining the Energy Department had kept Treasury in the dark.
The loan was provided by Treasury’s Federal Financing Bank but was guaranteed and monitored by the Energy Department.
Treasury Department lawyers did not think the law allowed for the government loan to be subordinated, Miller said in an August 17 email to Jeffrey Zients, deputy director of the White House Office of Management and Budget.
“In February, we requested in writing that DOE seek the Department of Justice’s approval of any proposed restructuring. To our knowledge, that has never happened,’” Miller said in the email, excerpts of which were provided by House Republicans.
She also complained that “DOE has not responded to any requests for information about Solyndra” despite requests dating to July 2010.
But emails provided by the administration showed that top staff at the Energy Department discussed the concerns with the chief financial officer of Treasury’s Federal Financing Bank.
“Ultimately, DOE’s determination that the restructuring was legal was made by career lawyers in the loan program based on a careful analysis of the statute,” an Energy Department spokesman said.
A Treasury spokesman declined to elaborate on the contents of Miller’s email.
The House Energy and Commerce Committee has now requested Treasury turn over all documents related to the Solyndra loan guarantee.
The panel has collected tens of thousands of pages of documents from the Energy Department and White House, and has also requested information from two private investors in Solyndra.
The committee has also asked the Energy Department for information on 27 other guarantees backing about $16 billion in loans. The panel is slated to hold another hearing on its findings next Friday, October 14.