President Obama’s new Ebola czar was hired for the purpose of “massaging news” for political purposes much more than he was to coordinate the federal response to the disease appearing on American soil and his involvement in the Solyndra mess is proof, according to former federal prosecutor Andrew C. McCarthy.
“It’s not a good sign when they bring somebody in to coordinate an effort whose chief talent is massaging bad news for political purposes. Klain, from all accounts, is a very bright guy and he’s probably very good at his job. But I don’t know that when what the country’s worried about is an Ebola outbreak, his particular skill set is what people were looking for in a coordinator,” said McCarthy, a New York Times bestselling author, who recently released “Faithless Execution: Building the Political Case for Obama’s Impeachment.”
Since the White House announced Klain as the Ebola response coordinator on Friday, plenty of critics have pointed to Klain’s lack of medical experience and his partisan history on matters ranging from the 2000 Florida recount to the Democratic strategy against the Supreme Court nomination of Clarence Thomas in 1991. However, McCarthy believes another illuminating chapter of Klain’s time in Washington was his handling of the Solyndra controversy in the early years of the Obama administration.
In a piece for National Review Online, McCarthy revisits the story of Solyndra, a solar panel manufacturer based in California and he says there are some eerie similarities between Klain’s actions as Solyndra was imploding just before the 2010 midterms and what he is likely to do in response to Ebola coming to the U.S.
In October 2010, despite the infusion of $535 million in taxpayer assistance, the company was about to go under. Solyndra officials told the Obama administration it was about to go public about it’s financial woes and the need to cut jobs. Klain, serving as chief staff for Vice President Joe Biden, was having none of that just days before the midterm elections.
“It was reported to Klain and Valerie Jarrett among others that around October 28 they were letting 20 percent of their workforce go and closing one of their big plants. The next thing you know, the Department of Energy ends up putting a lot of pressure on Solyndra and they delay the announcement until the day after the election,” said McCarthy.
So what is the parallel to Klain’s appointment to lead the Ebola response effort?
“I think it’s a cautionary tale about what Mr. Klain’s real job is here, which is basically to massage news, particularly with a new round of midterm elections on the horizon, to manage when news gets disclosed so it will have the least damaging political impact,” said McCarthy.
However, the former prosecutor says the whole Solyndra tale reveals far more than that about Klain and the Obama administration as a whole.
In 2005, President George W. Bush signed the Energy Policy Act. Among other things, the law allowed the federal government to engage in venture capitalism with taxpayer dollars with the goal of boosting green energy businesses. Solyndra applied for federal assistance then but was denied.
“Even though the administration was anxious to get on that bandwagon, it shunned Solyndra. The main reason was it’s business model was, as one analyst put it, a complete and total disaster. It was hemorrhaging money. It really didn’t have any prospects of becoming viable, much less profitable,” said McCarthy.
McCarthy says the federal government’s attitude toward Solyndra changed drastically in January 2009.
“Within a week of Obama taking office, their application was back in business again. One has to conclude that has something to do with the fact that the backer of Solyndra was the family foundation of a major Obama donor,” he said, referring to the family foundation of Obama donor George Kaiser.
This time, with environmental advocates in power and Klain serving as Biden’s chief of staff, Solyndra’s application was speedily approved, but it didn’t change the financial outlook for the company.
“It’s business model was such that it couldn’t compete with Chinese companies that were able to deliver solar energy with much more efficiency and for much less money. As a result, this company continued to hemorrhage money,” said McCarthy.
When hundreds of millions of taxpayer dollars failed to stabilize Solyndra, the next step was to seek market financing by going public and selling shares of the company. That never happened, however, because a legally-mandated audit revealed a fiscal mess that accounting firm Price Waterhouse Coopers described as a “going concern”.
Even with that backdrop, the Obama administration continued to publicly highlight Solyndra as a model for robust American economic growth.
“[The audit] happened a couple of months before President Obama famously came to Solyndra and touted it as a great company that was going to have these wonderful ramifications throughout the economy,” said McCarthy.
This is also the time, emails show, that Klain became directly involved in advancing the glowing Solyndra narrative despite the mounting evidence that it was a house of cards. Prior to the speech, presidential adviser Valerie Jarrett saw the financial state of the company and sought counsel from Klain as to whether Obama should still go there.
“Basically, Klain said, ‘Look, I’m comfortable with it. The president touted ten of these companies. Chances are a couple of them might go belly-up. That’s just what you have to do. You have to take these risks.’ It seems to me, when you read the email about it, he was sort of cavalier about the fact you could have massive, catastrophic failures of these companies that are flush with taxpayer funds,” said McCarthy.
But the worst part of the story the taxpayers getting shortchanged upon Solyndra’s implosion. The Energy Policy Act mandates that if a company receiving taxpayer funds goes under, the taxpayers (the U.S. Treasury) were to be first in line for reimbursements when a company’s assets were sold.
“In this instance, what the Obama administration did was to allow that part of the law to be essentially waived. They restructured the deal so that Solyndra backers were able to get priority over the taxpayers,” said McCarthy, noting well-connected donors got in line ahead of the public for at least the first $75 million of the reimbursement.
That, says McCarthy, is criminal.
“They went out of their way and beyond the parameters of what federal law wants done in order to protect the backers from the consequences of their horrific investments,” he said.