It is starting to look as though all the usual rules were ignored in the rush to shovel taxpayer money at Solyndra,even to the point of overlooking technical default on its loan conditions. Deborah Soloman of the Wall Street Journal reports:
Solyndra LLC had such steep financial problems in late 2010 that the company violated terms of its loan-guarantee agreement with the Department of Energy and technically defaulted on its $535 million loan, according to people familiar with the matter.
The failed solar-panel maker, which is under numerous criminal and congressional investigations, ran so short of cash in December 2010 that it was unable to satisfy certain terms of its U.S. loan agreement, these people said. The agreement required Solyndra to provide $5 million in equity to a subsidiary building its factory but cash-flow problems prevented those payments. (snip)
Solyndra's problems came to a head in November 2010 when it told the Energy Department it needed $150 million to make it through early 2012, at which time it believed its cash flow would improve. On Dec. 1, 2010, it was unable to make a $5 million payment to its subsidiary and technically defaulted on its loan.
The loan was officially restructured in February 2011, giving the company enough money to carry it through August. The company, which had drawn down $475 million of the U.S. loan as of Dec. 31, 2010, ended up borrowing $527 million before its bankruptcy.
So it appears that subsequent to the reported technical default, an extra $50 million of taxpayer dollars were funneled to the politically-connected firm, and in addition, the DoE agreed to subordinate taxpayers to investors in bankruptcy proceedings. Rep Michael Burgess, R-TX, is demanding an independent investigator be appointed, and he is correct. There is no way the highly politicized Department of Justice under Eric Holder can be trusted to conduct an adequate investigation.
Hat tip: Ed Lasky