30 FBI Agents Search Solyndra Offices, Lawmakers Probe Solar Company’s $535M Loan Guarantee

An FBI vehicle outside of Solyndra on Sept. 8. Photo by Poornima Gupta, Reuters

An FBI vehicle outside of Solyndra on Sept. 8. Photo by Poornima Gupta, Reuters

(Reuters) – FBI agents searched the offices of Solyndra on Thursday, the U.S. solar startup that received millions of dollars in federal loan guarantees before filing for bankruptcy this week.

The search comes amid intensifying pressure on the Obama administration, which championed Solyndra as being at the forefront of solar technology when President Barack Obama visited the company’s Fremont, Calif., facility in 2010.

The FBI said it was searching for materials, including documents, but did not offer more specifics.

“We are executing search warrants at Solyndra regarding a joint FBI and Department of Energy Office of Inspector General investigation,” Julianne Sohn of the FBI said in an email.

DOE officials confirmed the search but also declined to give any additional information.

About 30 FBI agents were inside the new manufacturing building Solyndra constructed with government-backed funds, according to company spokesman David Miller, who said the focus of the search appeared to be paperwork and computers.

“It’s been quite a surprising morning,” Miller said from outside the company’s headquarters, where a group of reporters and TV cameras were gathered to witness the search.

The FBI agents arrived at 7 a.m. PST and were already executing their search when the company’s remaining 100 employees showed up for work, Miller said.

Those workers, including human resources personnel and those cleaning up manufacturing tools, carried on winding down the company’s operations as the search went on, Miller said.

Solyndra laid off more than 1,000 workers last week and will go down to about 60 workers next week, he added.

Solyndra filed for Chapter 11 bankruptcy protection this week. The company received a $535 million loan guarantee from the federal government in 2009 and raised more than $700 million in venture capital funding in recent years from investors including Argonaut Ventures, Madrone Partners, U.S. Venture Partners, Rockport Capital Partners, CMEA Ventures and Redpoint Ventures. (In a 2010 filing for a scuttled IPO, Solyndra reported total equity funding of $970 million. Since then, at least another $175 million has come over the transom, according to press reports.)

The company said last week it could not bring down its costs fast enough to compete with cheaper products from China. Chinese production of solar panels has exploded in recent years, and their panels have helped drive the price of solar energy down dramatically, putting pressure on panel makers with higher costs.

On Thursday, U.S. Sen. Ron Wyden urged Obama to use U.S. trade laws to restrict “surging” imports of Chinese panels.

Solyndra is seeking a buyer to avoid a fire-sale liquidation of its assets. At a bankruptcy court hearing on Wednesday, Solyndra Chief Financial Officer W.G. Stover declined to identify either of the two companies that have shown an interest in the company’s operations.

Also at the hearing, a government attorney said Solyndra should have filed for bankruptcy “a long time ago,” and questioned why the company still needed more than 100 employees.

On Thursday, House of Representatives Democrats Henry Waxman of the Energy and Commerce Committee and Diana DeGette of the Oversight and Investigations Subcommittee called on the subcommittee’s chairman, Cliff Stearns, to invite Solyndra Chief Executive Brian Harrison to testify at a Sept. 14 hearing on the Solyndra loan guarantee.

Lawmakers have been probing Solyndra’s loan guarantee, the first awarded under a government program to support innovative green technologies, since earlier this year.

In a letter to Stearns, Waxman and DeGette said Harrison met with the Energy and Commerce Committee less than two months ago and said at the time that Solyndra “was in a strong financial position and in no danger of failing.”

Harrison has been contacted by the FBI but has not yet been interviewed, Miller said.

By Poornima Gupta and Nichola Groom, Reuters

(Additional reporting by Dan Levine in San Francisco, Tim Gardner in Washington and Matt Daily in New York)

Leave a Reply

PEHUB Community

Join the 12505 members of peHUB to make connections, share your opinion, and follow your favorite authors.

Join the Community

Look Who’s Tweeting

PE HUB News Briefs

RSS Feed Widget

VCJ Headlines (subscribers only)

RSS Feed Widget

Buyouts Headlines (subscribers only)

RSS Feed Widget

Reuters VC and PE feed

RSS Feed Widget