FBI investigating Solyndra for possible fraud
WASHINGTON - The FBI is investigating Solyndra LLC for possible accounting fraud and the accuracy of financial representations made to the government, according to an agency official.
The FBI is examining possible misrepresentations in financial statements, said the official, who requested anonymity because the investigation is continuing.
Solyndra, which made cylindrical solar panels, filed for bankruptcy protection on Sept. 6 and fired about 1,100 workers with little notice, about two years after winning a $535 million US loan guarantee from the Energy Department.
The company’s offices in Fremont, Calif., were raided by FBI agents on Sept. 8. The Justice Department has not said why Solyndra is being investigated.
“The company is not aware of any wrongdoing by Solyndra officers, directors, or employees’’ related to the Energy Department loan guarantees or other actions and is cooperating fully with the US Attorney in San Francisco, a Sept. 20 statement from Solyndra said. David Miller, a company spokesman, did not immediately return a phone call and an e-mail seeking comment yesterday.
Solyndra’s collapse has prompted congressional scrutiny of the Obama administration, which issued final approval of the loan that also won support from officials in the administration of George W. Bush.
Republicans on the House Energy and Commerce Committee, which has investigated the loan since February, have said the administration pressured US loan officers to expedite the review of Solyndra’s application so it could be promoted as a stimulus success story. The firm was the first to receive a guarantee under the stimulus act and was the largest award given to a solar manufacturer under the program.
Democrats, who dispute accusations that politics played a role, joined Republicans in criticizing Solyndra’s chief executive, Brian Harrison, for what they called misrepresentations of the company’s finances in meetings with lawmakers.
“When Mr. Harrison was in my office in July, he said that Solyndra’s future was bright, with sales and production booming,’’ Representative Henry Waxman of California, top Democrat on the Energy committee, said at a Sept. 23 hearing where Harrison was a witness. “I’d like to know why he told me that in July, and then filed for bankruptcy one month later.’’
Harrison and the company’s chief financial officer, Bill Stover, invoked their Fifth Amendment rights against self-incrimination and refused to answer questions at the hearing.
Harrison joined Solyndra in July 2010, after Solyndra had received its loan guarantee and its auditor had warned its financial difficulties were deep enough to raise questions about how long it could survive.
Companies seeking guarantees were required to estimate project costs, list private investors, and provide a model detailing cash flows for the life of the project, according to the 2006 Energy Department solicitation for loan guarantees.
Solyndra submitted an application in 2006 and added details in October 2007 after the company was identified by the Bush administration as a potential candidate for a guarantee.
It is unlawful for applicants for federal loan guarantees to make untrue, misleading, or incomplete statements, said James F. Bowe Jr., an energy regulatory lawyer in Washington who is not involved in the case.
The company withdrew a planned initial public offering in June 2010, citing adverse market conditions. A month earlier, Obama toured the new manufacturing factory that US aid helped build and said Solyndra was a testament to “American ingenuity and dynamism.’’
By December, the company was almost out of cash and sought to restructure the loan agreement with the Energy Department. The agreement made the government’s debt subordinate to $75 million in private investment in a last-ditch effort to save the company, Energy Department officials have said.
The company halted operations on Aug. 31.