The Two Scandals That Threaten Obama

by Matt Mackowiak

The Watergate, Iran-Contra, Monica Lewinsky, and Valerie Plame affairs differed greatly in subject and seriousness, but each showed how a scandal can swallow a presidency. Two grave threats to President Obama’s reelection have likewise grown out of controversies that once seemed minor.

The meltdown of a favored alternative-energy firm and the fallout from a deeply flawed federal gun-running sting have become rapidly developing national stories that the White House can’t control. Drip, drip, drip.

The FBI recently raided the California headquarters of Solyndra, a solar-panel manufacturer that received more than $500 million in public funds under Obama’s stimulus package. Last month, the firm filed for bankruptcy protection, with plans to lay off 1,100 employees. The Wall Street Journal reported that the company was violating the terms of its federal loan as long ago as 2010.

The White House was philosophically invested in Solyndra, too. Vice President Biden spoke via satellite at its groundbreaking. Obama toured its headquarters, saying, “It’s here that companies like Solyndra are leading the way toward a brighter and more prosperous future.”

These facts alone would add up to a scandal. But a more troubling story is emerging with evidence that White House officials pressured the Energy Department and Office of Management and Budget to move quickly on Solyndra. One OMB official wrote in an e-mail to a coworker, “The optics of a Solyndra default will be bad…The timing will likely coincide with the 2012 campaign season heating up.”

Solyndra executives contributed generously to Obama’s 2008 campaign. According to news reports, one of the company’s largest investors, George B. Kaiser, was a frequent White House visitor who raised more than $50,000 for the campaign, which would make $535 million an astonishingly strong return on investment. Despite that, Obama’s top political adviser, David Axelrod, who had a West Wing office when the federal funds were approved, told a Chicago radio station, “I don’t know anybody associated with Solyndra, and I know nothing about the project.”

Last week, when Congress held the first of what will likely be many hearings on the scandal, Solyndra executives invoked their Fifth Amendment right not to incriminate themselves. And this week, we learned that top Obama advisers had warned that the federal loan program in question was risky in October 2010.

The other gathering scandal concerns Fast and Furious, an ill-conceived Justice Department operation intended to track illegal guns in Mexico by allowing U.S. gun shops to sell them to traffickers and other criminals south of the border. So far, guns sold in the operation have been linked to more than 10 violent crimes in the United States, including the murder of Border Patrol Agent Brian Terry.

House Oversight and Government Reform Committee Chairman Darrell Issa (R., Calif.) has been on this case for months, leading to the recent reassignment of the acting director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. ATF attaché Carlos Canino told Issa’s committee, “These guns weren’t going for a positive cause; they were going for a negative cause. The ATF armed the [Sinaloa] cartel. It’s disgusting.” ATF official Daniel Kumor testified that those in the agency who raised concerns about the sting were ignored.

Amazingly, Attorney General Eric Holder has claimed he wasn’t even aware of the operation until it ended, in January. If that’s true, it suggests gross incompetence on Holder’s part.

The White House has two choices with these scandals: admit wrongdoing or counter the charges. Admitting wrongdoing, the likeliest eventual outcome, will mean taking responsibility and firing people. The question then will be just how bad the “optics” turn out to be for the president’s prospects in 2012.