Via Beltway Confidential:
The House Energy and Commerce Committee released a report today on the Energy Department’s decision to subordinate taxpayers to private investors in the ill-fated Solyndra project. That is, the taxpayers would have to wait in line behind the private investors and let them recoup all of their losses first. Only after that could taxpayers could get any money back – assuming there would be any money to recoup at this point. In this case, that would be a reported $328 million of the $335 million federal loan guarantee to Solyndra.
This is significant because the plain language of the department’s own rules for loan guarantees states that taxpayers must not be subordinate and instead must come first. The committee’s report argues that Energy Department officials made a spur of the moment decision to violate this standard as part of a desperate attempt to keep the company afloat, then scrambled after the fact to justify their action. […]
Administration officials have argued it was necessary to attract private capital to support the company. But they may have had another motivation. Argonaut is the investment vehicle The George Kaiser Family Foundation. Through it GKFF owned a 35% stake in Solyndra. Despite being called a foundation, GKFF is not a nonprofit in the conventional understanding of the term, but an exotic variation that allows the wealthy to park their assets tax-free. The foundation’s namesake is a major fundraiser of President Obama’s. He was often a guest in the White House and even discussed Solyndra with officials there.