Newly released communications regarding the loan approval for Solyndra, the now failed California solar energy company, show direct intervention by an Energy Department adviser and Obama campaign fundraiser, and raise new questions of possible involvement by Rahm Emanuel and the President. As more is learned, it becomes increasingly clear that the Administration used the Stimulus, and specifically the green energy loan program, as a campaign slush fund to distribute billions of dollars like party favors to supporters and to grandstand for re-election to a perceived constituency.
By mid-2009, the White House was obsessing to make headlines with an announcement of a $535 million loan to Solyndra as the first of many green energy loans in the DOE's pipeline that would be funded by the recently passed Stimulus. Initially the staff tried to schedule an announcement by Obama, and later as approval was delayed, they shifted to the Vice-President.
"Ron said this morning that the POTUS definitely wants to do this (or Rahm definitely wants the POTUS to do this?)," a White House staffer told an Obama scheduler on August 17, 2009 according to The Washington Post. This was a reference to Ron Klain, Chief of Staff at that time for the Vice-President. "Rahm" refers to Rahm Emanuel, Chief of Staff to the President.
The Solyndra loan was finally approved in September 2009 over a plethora of warnings and objections from within the Department of Energy, the Office of Management and Budget, and numerous private and solar industry experts. Following the company's collapse, questions have haunted the White House of possible political corruption and cronyism as investigations revealed that executives and investors in Solyndra were also significant donors to the Obama campaign with repeated access to top White House officials. In addition, critics charge that the administration disregarded objective financial analysis, and blindly threw billions of taxpayer dollars at green energy companies like Solyndra with little chance of success.
Oblivious to the warnings from his own White House advisers that the company was in serious trouble and would run out of cash in September, 2010 (and it did), Obama visited the Solyndra headquarters in May 2010 and hailed it as "leading the way toward a brighter and more prosperous future."
The Washington Post is also reporting that Steve Spinner, a major Obama 2008 campaign fundraiser, later appointed by the White House to "advise" the Department of Energy regarding the green energy loan program, applied heavy pressure on DOE officials for approval of the $535 million loan guarantee for Solyndra.
"How (expletive) hard is this? What is he waiting for?" Spinner wrote to a DOE official by email on Aug. 28, 2009 questioning why the Solyndra application was not already approved. "I have the OVP (Office of the Vice-President) and the WH (White House) breathing down my neck on this. They are getting itchy to get involved."
Later the same day, Spinner asked the same DOE official to "walk over there and force him to give you the answer."
In another exchange just minutes after getting an email from Solyndra, Spinner fired off a message to the DOE officials asking if the White House budget office (OMB) had completed their review. "Any word on OMB? Solyndra's getting nervous," he wrote.
The loan was pushed through, and on September 4, 2009 Joe Biden announced by video link the deal as the "unprecedented investment this Administration is making in renewable energy and exactly what the Recovery Act (Stimulus) is all about."
Spinner's involvement is in direct contradiction of previous representations by the DOE. Spinner had specifically recused himself from the Solyndra application because his wife's law firm, Wilson Sonsini Goodrich & Rosati, represented the company on the DOE loan and pocketed $2.4 million in legal fees for their efforts.
The AP reports that an administration official, speaking on condition that he not be identified because of ongoing investigations in the evolving scandal, said that Spinner "clearly was actively involved in facilitating between DOE and OMB."
Joe Biden was partially correct – unfortunately. Solyndra is typical of what the billions of Stimulus dollars tossed around by the Obama Administration was "all about" – about waste, cronyism, and corruption. The taxpayer is on the hook for $535 million, but before this is done some once big shots in Washington will deservedly be cut down to size.
This summer, the Ukrainian government awarded the rights to develop a huge complex of oil and gas fields in the country to an American company that is co-owned by a former campaign donor to then-Energy Secretary Rick Perry. The decision annoyed the heads of the state-owned Naftogaz conglomerate, which had competed and lost the bidding for the contract. Now, Naftogaz has filed a lawsuit seeking to overturn the deal, two sources familiar with the matter tell TIME, casting a spotlight on Perry’s role in Ukraine’s oil and gas industry.
The suit was filed on Friday afternoon in the District Administrative Court of Kyiv, the sources tell TIME, and has not been previously reported. In a draft of the complaint obtained by TIME on Monday, Naftogaz alleges that the government of Ukraine acted illegally and with bias in July when it granted the oil and gas fields to an American company that is co-owned by Michael Bleyzer, one of Perry’s longtime allies and financial backers.
Bleyzer, a Ukrainian-born energy investor from Texas, insists that his company won the oil and gas exploration rights in Ukraine fairly and without any political influence. He says that the committee of government officials that made the decision was advised by outside experts who saw broader advantages in doing business with the U.S.
“The bid submitted by our company was judged as superior by the interagency committee as advised by a group of independent experts,” Bleyzer wrote in an email to TIME. “It was and is Ukraine’s goal to bring in much needed-foreign expertise and investment to find new fields, a goal advanced by this award.”
The Department of Energy (DOE) denied that Perry advocated for the business interests of any specific individual or company during his tenure as Energy Secretary, which ended this month. Rather, a department spokesperson said, Perry advanced the general interests of the U.S. energy sector. “Throughout his tenure at DOE, Secretary Perry championed the American energy industry all over the world,” Shaylyn Hynes, a spokesperson for the Department, said in a statement on Sunday. “[T]hroughout his engagements with Ukrainian officials Secretary Perry consistently called for the modernization and reform of Kyiv’s business and energy sector in an effort to create an environment that will incentivize Western companies to do business in Ukraine.”
Perry’s efforts to shape the energy sector in Ukraine have played out alongside the Trump Administration’s campaign of political pressure in the country. Starting this spring, Perry was part of a trio of senior U.S. officials—dubbed the “three amigos”—who took the reins of American policy in Ukraine. A whistle-blower’s complaint about Trump’s pressure campaign resulted this fall in an impeachment inquiry by Congress, which ended last week with the drafting of two articles of impeachment against the President.
Though Perry has played a relatively minor role in the impeachment saga so far, he was at the forefront of the parallel, and possibly intertwined, effort to influence the Ukrainian energy sector. During a meeting in May, Perry presented the President of Ukraine, Volodymyr Zelensky, with a list of Americans who could advise Zelensky’s government on energy policy. Among the people he suggested was Bleyzer, who has supported Perry’s political campaigns over the years, including with a reported $30,000 contribution to Perry’s campaign for governor of Texas in 2010.
At the time of Perry’s visit to Kyiv in May, Zelensky was seeking a meeting with Trump in hopes of bolstering Ukraine’s alliance with the U.S. against Russia, which invaded Ukraine in 2014 and continues to occupy parts of the country in Europe’s only active war.
The Associated Press reported in October that Perry’s proposal was part of an effort to install new leadership at Naftogaz. Some of the advisers Perry recommended were meant to join the company’s supervisory board, the AP reported. Bleyzer and the Department of Energy both denied pushing for changes to the board. In his email to TIME, Bleyzer wrote that Perry never suggested appointing him or anyone else to the board of Naftogaz. “For the record no one ever discussed this position with me, and I never would have considered it,” he wrote.
However, Bleyzer was advanced by the Department of Energy as a possible advisor to Ukraine on energy policy. “I participated in a couple of conversations with the DOE staff where they expressed an interest in creating an informal group that could help the DOE develop energy independence strategy for Ukraine. I would characterize these conversations as brainstorming in nature,” Bleyzer added. “Nothing ever came out of that idea.”
About two weeks after Perry proposed Bleyzer as an energy adviser to Ukraine, a company that Bleyzer co-founded, Ukrainian Energy, put in a bid for the rights to explore for oil and gas in a vast complex of fields known as Varvynska, the largest of nine energy licenses that the government put up for auction this year. Bleyzer’s only competitor for that field was a subsidiary of Naftogaz called UGV, whose bid appears to have been higher, at least in terms of the price it offered and the investments it promised to make, according to bidding documents reviewed by TIME. The Associated Press reported the apparent disparity in the bids last month.
“We know our offer was better,” Andriy Kobolyev, the CEO of Naftogaz, told TIME in an interview on Nov. 22.
Still, when the government decided the results of the tender on July 1, Bleyzer’s company won out, securing the exclusive rights to develop the complex of oil and gas fields for up to 50 years. “We are very annoyed with this,” Kobolyev, the Naftogaz CEO, told TIME last month. “Very annoyed, to say the least. And when we are annoyed, we usually do act, and we will.” Asked whether he intended to take legal action, Kobolyev answered, “Can’t comment.”
But lawyers for Naftogaz were then already at work preparing a lawsuit that seeks to overturn the results of the auction, according to the two sources with direct knowledge of the claim. UGV, the subsidiary of Naftogaz, is listed as the plaintiff in the lawsuit, according to the draft of the complaint. The document asks the court to nullify the government’s decision to award the fields to Bleyzer’s company, and to order the government to hold a new competition for the licenses to those fields. The defendants are listed as the Cabinet of Ministers of Ukraine, the Ministry of Energy and Coal Mining of Ukraine and the government commission that awarded the rights to the fields this year. Neither Perry nor Bleyzer is named in the draft complaint.
Chu's selection of Azar was largely seen as a sign of the Obama administration's intense interest in expanding the grid to support renewables and tackle climate change, sources said.
As laid out in the memo, she also championed Texas-based Clean Line Energy's application to partner with DOE through its never-before-used authority under Section 1222 of the Energy Policy Act, which would allow a PMA with federal authority to site the line and overcome state opposition.
Jimmy Glotfelty, founder of Clean Line Energy Partners and a former senior electricity adviser for President George W. Bush, said Azar should be remembered for trying to build infrastructure and integrate renewables in a thoughtful and cooperative manner.
"The customers of PMAs are pretty protective, and if you ask a lot of people who have been in her shoes -- including myself -- it's not uncommon to get into debates with customers of PMAs," he said. "They're tough negotiators."
Azar brought that same spirit to DOE. She helped bring together the "federal family" in 2011 -- nine agencies key to streamlining federal permitting of major new power lines that could have taken up to 15 years to garner approval (Greenwire, Oct. 5, 2011). DOE already had existing authority to do so under 216(h) of the Energy Policy Act of 2005, language that allows the agency to coordinate federal and environmental reviews.
"DOE, until I got there, implemented [the rule] in somewhat of a tepid manner," she said. "I came in like gangbusters as I always do and not only helped to lead the rapid respond team for transmission but helped DOE draft some rules for 216(h), negotiate with the nine agencies."
The Honorable Lauren Azar
Senior Advisor to the Secretary
U.S. Department of Energy
1000 Independence Avenue SW
Washington, D.C. 20585
August 17, 2011
Dear Lauren,
With development efforts well under way, the Plains & Eastern Clean Line is positioned to
help meet President Obama's call for 80% clean energy by 2035. The Plains & Eastern Clean Line will provide affordable, renewable power to millions of customers in the southeastern United States. Regulatory and permitting approvals at the state and federal levels are the critical path items. Since submitting a proposal in July 2010, the Plains & Eastern Clean Line has made substantial development progress, strengthening the case for a partnership with the Department of Energy (DOE) and Southwestern under Section 1222 of the Energy Policy Act of 2005.
The attached document provides an update on our efforts, including the widespread support the project has received from a diverse group of stakeholders. It also supplements the original application with respect to how the project is necessary to accommodate the increase in demand for transmission capacity and how the project is consistent with needs identified in transmission plans or otherwise by the appropriate transmission organization.
Projects like the Plains & Eastern Clean Line have the potential to return the United States to a global leadership position in clean energy. The private sector has the resources and the desire to invest in our aging infrastructure and we respectfully ask that the DOE exercise its authority to make it possible. We appreciate the attention you are giving the Plains & Eastern Clean Line. We will be in Washington, DC regularly in the coming months and would like the opportunity to sit down with you and your team to review the project materials and respond to any questions.
2) is consistent with--
(A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization
DOE has emphasized the need for additional high voltage transmission capacity to deliver renewable resources from transmission-constrained areas, stating in its "20% Wind Energy by 2030" Report that "If the considerable wind resources of the United States are to be utilized, a significant amount of new transmission will be required."
Jimmy worked for George W. Bush, for almost eight years, at both the gubernatorial and presidential levels. He led the Bush Administration’s efforts on electricity issues with Congress and the electric utility industry. In this capacity, he founded Office of Electric Delivery and Energy Reliability at the Department of Energy (DOE) and served as its first Director.
The Department of Energy’s (DOE) Section 1222 Program is administered by the Office of Electricity Delivery and Energy Reliability (OE).
Whether the department will take the same approach under Chu's successor, MIT nuclear physicist Ernest Moniz, remains unclear.
