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The FBI Raid on Solyndra

September 9, 2011

The SunI’d planned to write a few articles on solar energy a few weeks down the road, but I’m going to have to jump the gun and do a quick post because of the rapidly unfolding Solyndra story.  An abbreviated synopsis of the story would be:  Solyndra is a company which made unique photo-voltaic panels consisting of rack mounted cylinders.  To see what they look like click on the Solyndra link above.  They applied for a sustainable energy loan guarantee under the Bush administration, but the actual approval didn’t take place until early in the Obama administration.  The company was touted as an example of innovative green job creation by the administration.  Two weeks ago the company filed for bankruptcy, citing the inability to compete with Chinese companies, and laid off over a thousand workers.  This morning their offices were raided by the FBI with the support of the Department of Energy.

I’ll be writing on this a lot over the next few weeks (I was an Enron scandal junkie, and I always love a good story about how things go wrong in the business and public spheres), but so far the best two early articles I’ve read are this one from Forbes, and this one from the Atlantic .

A few observations I will make:

1) Innovative technologies are always risky, so it wouldn’t be surprising if the market just shook out Solyndra on a routine and normal basis, with no nefarious activity on management’s part.

2) China’s dramatic entry into the solar energy market was bound to generate a few casualties.

3) In response to Henry Waxman getting glowing reports of the state of the company, companies always put on a happy face when they’re trying to raise capital.  Dishonesty can come back to bite you, but the communications he got are not surprising at all, and not necessarily indication of a scandal.

4) I’ll read the responses of the Right Wing Noise Machine, but I could probably write their script on this incident myself, so unless they come up with a true smoking gun, I’m likely to take it as partisan gibberish.

5) I have to think that the FBI would resist a raid unless they had some indication that the company had crossed the line into illegal activity.  If they agreed to the raid for purely political reasons, a lot of blame will lie with both them, and the people who brought the pressure to bear.

Really fair, and Really balanced, is my motto.

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2 Comments leave one →
  1. September 9, 2011 3:16 am

    I don’t think Solyndra’s actions are likely to have been criminal though they do appear rather uncharacteristically naive. Knowing you’re that far off the market price for your technology and choosing to pour millions more down the drain chasing rainbows isn’t a great piece of management either.

    But the green haters aren’t happy about the number attached to the collapse so there was always going to be some political fall out.

  2. September 9, 2011 3:32 am

    I think you’re probably generally correct, with the qualification that all purveyors of new technology are prone to having more faith in their particular solution than they are to have good business sense. The notable thing about this company is that the DOE got sucked in to the tune of $535,000,000, at a time when there’s a sensitivity around spending.

    At this point I’m spending a bit of time trying to figure out whether I think the company’s technology is worth pursuing.

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