WASHINGTON - The Obama administration restructured a half-billion dollar federal loan to a troubled solar-energy company in such a way that it put private investors - including a fund-raiser for President Obama - ahead of taxpayers in line for repayment in case of a default, government records show.
Administration officials defended the loan restructuring, saying that without an infusion of cash earlier this year, solar panel maker Solyndra Inc. would likely have faced immediate bankruptcy. Even with the federal help, Solyndra, of Fremont, Calif., filed for Chapter 11 bankruptcy protection last month and laid off 1,100 employees.
Solyndra was the first renewable-energy company to receive a loan guarantee under a stimulus-law program to encourage green energy.
Since then, the company's implosion and revelations that the administration hurried Office of Management and Budget officials to finish their review of the loan in time for the company's September 2009 groundbreaking has become an embarrassment for Obama.
An Associated Press review of regulatory filings shows Solyndra was hemorrhaging millions of dollars for years before the administration signed off on the original $535 million loan guarantee in September 2009. The company eventually got $528 million.
Under terms of the February loan restructuring, two private investors, Argonaut Ventures I L.L.C. and Madrone Partners L.P., stand to be repaid before the U.S. government if the solar company is liquidated. The two firms gave Solyndra a total of $69 million in emergency loans.
Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla., headed by billionaire George Kaiser, who raised between $50,000 and $100,000 for Obama's 2008 campaign, federal election records show.
Madrone Partners is affiliated with the Walton family, descendants of Wal-Mart founder Sam Walton. Rob Walton contributed $2,500 last year to the National Republican Congressional Committee.