Federal agents searched Solyndra's Fremont headquarters Thursday, just days after the high-profile solar manufacturer filed for bankruptcy protection and a week before its top executives are expected to testify before Congress.
The surprise raid is believed to be related to Solyndra's controversial $535 million loan guarantee from the U.S. Department of Energy and comes amid heightened scrutiny from Washington lawmakers who want to know how a company that was once President Barack Obama's poster child for clean technology imploded so quickly.
At least 30 FBI agents and investigators from the Energy Department's Office of Inspector General descended on
"We are executing search warrants on Solyndra regarding a joint Department of Energy Office of Inspector General and FBI investigation," said FBI spokeswoman Julianne Sohn, who declined to elaborate. The search warrant is under seal, so it remains unclear exactly what investigators are looking for.
Leaders in Congress on both sides of the aisle are eager to learn what happened at Solyndra, and Republicans on the House Energy and Commerce Committee have scheduled a Sept. 14 hearing on Solyndra's DOE loan guarantee.
The Office of Inspector General is the investigative arm of the Energy Department and regularly audits and inspects department programs,
Solyndra, which manufactured tubular-shaped solar panels for commercial rooftops, stunned the cleantech community when it abruptly announced last week that fierce competition from China had forced it to suspend operations and immediately lay off 1,100 employees.
But the Energy Department, which agreed to restructure Solyndra's debt in January, was presumably aware the company was dealing with a cash flow crisis. The department confirmed Thursday that it had "observer status" on Solyndra's board of directors starting in February and participated in board meetings and conference calls.
Also Thursday, Rep. Henry Waxman, D-Los Angeles, sent his colleagues on the committee a sharply worded letter urging them to invite Solyndra CEO Brian Harrison to testify.
"Less than two months ago, Mr. Harrison met with us and other committee members to assure us that Solyndra was in a strong financial position and in no danger of failing. ... These assurances appear to contrast starkly with his company's decision to file for bankruptcy last week," Waxman wrote.
In a July 13 letter to the Energy and Commerce Committee's Subcommittee on Oversight and Investigations obtained by this newspaper, Harrison wrote that he wanted to "ensure" that the subcommittee had "the most accurate and up-to-date information regarding Solyndra." Harrison then wrote: "Solyndra's revenues grew from $6 million in 2008 to $100 million in 2009 to $140 million in 2010. For 2011, revenues are projected to nearly double again."
Committee Chairman Fred Upton, R-Mich., and Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla., said in a joint statement Thursday that the latest development reinforces their long-held concerns about the Solyndra loan guarantee.
"The FBI raid further underscores that Solyndra was a bad bet from the beginning and put taxpayers at unnecessary risk," they said. "We hope to hear directly from Solyndra's executives next week -- the same executives who visited Capitol Hill as part of a PR campaign in July and misrepresented the company's financial situation."
The FBI's involvement in the raid indicates that a criminal investigation could be under way.
Joseph Russoniello, a former U.S. attorney for the Northern District of California, said investigators could be responding to a whistle-blower or seeking additional documents that shed light on why the company went bankrupt.
"They're probably looking for emails and internal communication within the company, like information about sales," Russoniello said.
Solyndra spokesman Dave Miller said the company was fully cooperating with federal officials.
One former employee, Mohammed Walahi, who began working as a process technician for Solyndra in 2005, showed up at the company Thursday morning to file a workers' compensation claim for a repetitive stress injury and was surprised to see FBI agents instead of security guards. Solyndra's employees were laid off with no severance pay and an immediate end to health benefits, and Walahi, 41, has a wife and two young children to support.
He lashed out at his former employer, saying Solyndra manufactured solar panels that often contained imperfections that had to be thrown away.
"At least $100,000 a day was thrown away," Walahi said. "If they are wasting $100,000 a day, how much is that a month or a year? Of course that's going to lead to bankruptcy."
Solyndra has become a political black eye for the Obama administration, in part because the president visited the company in May 2010 to talk about the promise of green jobs.
Critics have said the federal support for Solyndra may have been politically motivated. The George Kaiser Family Foundation, a charitable organization based in Tulsa, Okla., holds about 35.7 percent of Solyndra, according to a company filing with the Securities and Exchange Commission. George Kaiser raised money for Obama's 2008 presidential campaign and was a frequent visitor to the White House.
Contact Dana Hull at 408-920-2706.