Solyndra Inc., a renewable energy firm that became a darling of the Obama Administration, shut the doors of its California headquarters Wednesday, raising fresh questions from critics about political favoritism and wasted money in the federal loan program.
The manufacturer of rooftop solar panels opened its doors in 2005, and in 2009 became the first recipient of an Obama administration energy loan guarantee - a $535 million federal commitment that helped minimize the risk to venture capital firms backing the solar start-up. Obama visited the factory last year to herald its future.
"The promise of clean energy isn't just an article of faith -- not anymore," Obama told Solyndra workers then. "The future is here."
The government loan guarantee was supposed to spur 1,000 fulltime jobs once Solyndra's solar plant was fully operating. Instead, the company announced Wednesday it intends to file for Chapter 11 bankruptcy and that 1,100 full and part time employees had been laid off "effective immediately," without severance. Some said they no longer have health insurance, either.
Now, the company's collapse is sure to rekindle questions about how well the Energy Department vetted the deal before putting taxpayer dollars on the table - and about whether the public will have to pick up the $535 million tab. The full bill may not be clear until bankruptcy proceedings.
The Center for Public Integrity's iWatch News and ABC News first reported on questions about the Solyndra loan in May, after the Energy Department disclosed it was being forced to restructure its loan package for the company. One of Solyndra's major investors was George Kaiser, an Oklahoma billionaire who raised between $50,000 and $100,000 for Obama during the 2008 election.
The news reports revealed that DOE had issued a conditional commitment to back Solyndra in 2009 without first receiving full marketing or legal reviews. That shortcut drew the attention of government auditors, who feared the Energy Department was putting taxpayer dollars at risk as it rushed to announce Obama's maiden energy loan guarantee in March 2009.