Fact-Checking The Weekly Standard's Solyndra Cover Story
The Weekly Standard is out with a new cover  story  on Solyndra that repeats  many of the inaccurate claims we've seen in mainstream and conservative media coverage, and adds some of its own.
CLAIM: The Weekly Standard wrote that in the final days of the Bush administration, "OMB [Office of Management and Budget] 'remanded' the application back to DOE for further review and modification. As when the Supreme Court remands a case to lower courts for reconsideration, this step is usually tantamount to killing the application."
FACTS: The Department of Energy's loan guarantee credit committee, not the OMB, remanded  the application, saying that that although the Solyndra project "appears to have merit," the committee needed more information. The loan programs staff -- still under the Bush administration -- subsequently developed  a schedule to complete Solyndra's due diligence that would approve the conditional commitment in early March 2009 and close it by April 2009. Even FoxNews.com reported  that "the Bush officials were still weighing the decision on a loan right up until the handover to the Obama administration." In March the credit committee, staffed with the same career officials that previously remanded the application, recommended approval.
CLAIM: The Weekly Standard claimed: "In March 2009 DOE granted Solyndra's revised application with a 'conditional commitment' for the loan -- one of the first out of the chute -- which is merely the first hurdle to final approval, even though an OMB staffer wrote in an email that 'This deal is NOT ready for prime time.'"
FACTS: The "prime time" email  concerned the timing of an announcement, not the merit of the loan guarantee. In response to an email about a potential announcement of the Solyndra loan during the President's visit to California on March 19, 2009, the analyst argued that the presidential announcement should not be made before the loan deal was completed. The email argued that "This deal is NOT ready for prime time" because there were more steps to be completed before the loan guarantee could be finalized -- namely, OMB had to review the credit rating and Solyndra needed to raise an additional $200 million in private capital. President Obama did not announce the Solyndra deal, as the email recommended; the Energy Department announced the conditional commitment in a press release . After the loan guarantee was finalized in September, Vice President Joe Biden announced  it via satellite.
CLAIM: The Weekly Standard stated: "DOE staff noted that a credit-rating agency had warned that Solyndra would run out of cash by September 2011."
FACTS: According to the Department of Energy, the email did not warn  that Solyndra would run out of cash, but rather that a subsidiary of Solyndra - the "Fab 2 Project company" - "was projected to have relatively low levels of cash in one particular month, and that the parent company would need to make up any potential shortfall." The DOE added that the analysis also showed "the project having millions of dollars in cash the next month, and multiples of that by the end of January of 2012."
CLAIM: The Weekly Standard stated that "the Department of Energy capitulated with a questionable restructuring of the loan guarantee in February of this year that put equity investors ahead of taxpayers in the event of a bankruptcy liquidation, an unorthodox move that may have violated the law. Solyndra argued that the debt subordination was necessary if Solyndra was going to succeed in attracting more private capital. George Kaiser came through with another $75 million, but it clearly wasn't enough."
FACTS: Several private investors, including both  Argonaut Venture Capital, a subsidiary  of the George Kaiser Family Foundation, and Madrone Capital Partners, which is tied to the Walton family, provided the $75 million in emergency financing. The Walton family is a major donor  to Republicans. The New York Times reported  that bankruptcy experts "said the decision made by the energy Department in February is routine in the commercial world."
CLAIM: The Weekly Standard criticized DOE's decision to allow Solyndra to restructure the loan, asserting that "Taxpayers would likely have received more of their money back if the plug had been pulled back in February."
FACTS: The Weekly Standard provides no evidence to support this claim. The Department of Energy expects  recovery of taxpayer money to be greater due to the restructuring. DOE official Jonathan Silver told Congress that they "determined, as part of the restructuring, that the facility would be more valuable, even in the event of a future liquidation, once complete." Dow Jones' VentureWire also reported  at the time that the DOE "squeezed the terms of its loan in its favor" so "that it is now secured by all the assets of the company, including Solyndra's intellectual property."
CLAIM: The Weekly Standard stated of the loan guarantee program: "[T]he bulk of the loan guarantees are for renewable energy and politically trendy outfits like Tesla Motors ($465 million), which is producing a sporty high performance all-electric roadster that you, too, can own for the base sticker price of $109,000."
FACTS: DOE granted Tesla a loan guarantee not to produce its roadster, but to build a factory in California  for the production of its lower-priced Model S electric sedan. The loan guarantee portfolio  includes nuclear, biofuel, solar generation, solar manufacturing, wind generation, geothermal and efficiency projects. The largest loan guarantees went to Georgia Power Company for nuclear reactors; Ford for upgrades to factories and fuel efficiency technologies; and Areva for a uranium enrichment facility.
CLAIM: The Weekly Standard stated: "The 'green tech' bubble is already bursting; even the New York Times has noticed, with a story in mid-August under the headline 'Number of Green Jobs Fails to Live Up to Promises.' There are actually fewer 'clean tech' jobs in Silicon Valley today than 10 years ago, according to a recent Brookings Institution study."
FACTS: Like the Times article , The Weekly Standard missed Brookings' distinction between "clean economy" jobs, and a smaller portion of those jobs that are in clean technology. The Brookings Institution found  that the "clean economy" in the San Jose metropolitan area  lost 492 jobs between 2003 and 2010. However, a Brookings Institution researcher explained via email that that clean technology jobs in the area "increased from 2,705 to 6,638" and "grew at an annual rate of 11.9 percent." Just as the Times article cherry-picked  the statistic from the South Bay without context, The Weekly Standard does not note that in the surrounding San Francisco Bay Area, clean economy jobs grew from 36,027 to 51,811 and clean technology jobs grew from 9,625 to 13,917.