You can catch up on the story here, here, here, and here if you’re unfamiliar. Basically the Obama Administration gave a half-billion dollar, taxpayer-backed loan to a politically-connected solar company that should never have received the loan in the first place and has now gone under. Taxpayers are out the money while an Obama-supporting billionaire is recouping his losses.

Solyndra was provided the low-interest loan despite warnings and first-hand knowledge by the administration that its finances were shaky and its business plan non-viable. The inspector general of the Department of Energy is now investigating, and the FBI has raided the company’s facility.

Bloomberg reports:

Solyndra LLC’s workers making solar-power panels in a California factory subsidized by U.S. taxpayers showed “the promise of clean energy isn’t just an article of faith,” President Barack Obama said on a visit to the company in May 2010.

Two months before Obama’s visit, accounting firm PricewaterhouseCoopers LLP warned that Solyndra, the recipient of $535 million in federal loan guarantees, had financial troubles deep enough to “raise substantial doubt about its ability to continue as a going concern.”

The Obama administration stood by Solyndra through the auditor’s warning, the abandonment of a planned initial public offering and a last-ditch refinancing where taxpayers took a back seat to new investors. That unwavering commitment has come under increasing scrutiny since the company’s travails culminated in its filing for bankruptcy protection on Sept. 6 and a raid on its headquarters by the Federal Bureau of Investigation two days later.

Analysts, many of whom knew (it was well-known in the industry) that Solyndra couldn’t come close to competing with global competitors, were shocked that the White House backed Solyndra:

“People including our government put blinders on and did not want to believe in the obvious,” Jonathan Dorsheimer, an analyst in Boston for Canaccord Genuity Inc. of Vancouver, said in an interview with Bloomberg Government. “The fact that the government chose Solyndra as their white horse is mind- boggling.”

Actually, it’s not mind-boggling.

See, one of the chief backers of Solyndra was a billionaire named George Kaiser. Kaiser was a bundler for the 2008 Obama presidential campaign. Not only was Obama repaying Kaiser for his political support, but Obama could use the taxpayer-backed company as “evidence” of “green” sector “success”.

It was quite logical. Corrupt, but logical.

Here’s what the external auditors warned about:

“The company has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders’ deficit,” PricewaterhouseCoopers said.

That was filed with the Securities and Exchange Commission, so the feds had access to the report. But still the low-interest loan went forward.

Things were so bad that the week after Obama’s June 2010 visit, Solyndra executives withdrew the company’s planned $300 million initial public offering. The company was literally running out of money by December 2010. But what did the feds do? They agreed to allow Obama-supporting billionaire George Kaiser and others to recoup losses before taxpayers.

The case has become sufficiently shady that now even Democrats are demanding answers — answers the administration has been slow and unwilling to provide. The House oversight committee is now conducting an investigation, as is the inspector general of the Department of Energy.