Joe Nocera at the New York Times:
If Brian Harrison and W. G. Stover, the two Solyndra executives who took the Fifth Amendment at a Congressional hearing on Friday, ever spend a day in jail, I’ll stand on my head in Times Square.
It’s not going to happen, for one simple reason: neither they, nor anyone else connected with Solyndra, have done anything remotely criminal. The company’s recent bankruptcy — which the Republicans are now rabidly “investigating” because Solyndra had the misfortune to receive a $535 million federally guaranteed loan from the Obama administration — was largely brought on by a stunning collapse in the price of solar panels over the past year or so.
The company’s innovative solar panels, high-priced to begin with, became increasingly uncompetitive in the marketplace. Solyndra didn’t have enough big commercial customers to create the necessary economies of scale. And although Harrison and Stover remained optimistic up to the bitter end — insisting six weeks before the late-August bankruptcy filing that the company was going to be fine — they ultimately failed to raise additional capital that would have allowed Solyndra to stay in business.
The Republicans are trying to make that optimism appear sinister, but if we’ve learned anything from the financial crisis, it is that wishful thinking in the face of a collapsing market is not a crime. Otherwise, Richard Fuld, the former chief executive of Lehman Brothers, would be wearing prison garb.
Harrison and Stover are on the hot seat. Anything they say in their defense — even an off-hand remark — can and will be used against them. Their lawyers would be fools if they didn’t insist that their clients take the Fifth Amendment.
Do the Republicans know this? Of course. Do they care? Of course not. For an hour and a half on Friday morning, they peppered the two men with questions about this “taxpayer ripoff,” as Representative Fred Upton, a Michigan Republican, described it, knowing full well that Harrison and Stover would invoke their constitutional right to remain silent. Joe McCarthy would have been proud.
First of all, half a billion dollars is missing. That’s a scandal even if nothing criminal took place. Secondly, if there is “nothing remotely criminal” here then where did the FBI get probable cause for their search warrants?
Even if nothing criminal took place as to the original loan, what about the second loan they didn’t get? What were they telling the government about the “stunning collapse in the price of solar panels?”
The investigation is just starting. It is way too early to proclaim anyone’s innocence yet.
BTW – If you know your client is innocent you tell them to go ahead and talk.