Tuesday, October 4, 2011

A Solyndra Say Whaaat? "Auditor's 'Going Concern' Letter Typical of Companies Going Public"-DOE

I may have been operating with an incorrect worldview.*
For years I've been laboring under the assumption that having your auditor question your viability as a going concern was aberrant and abhorrent and yet we have this from Bloomberg's story "Democrats Cite White House Solyndra Concerns to Rebut Critics":
...The Office of Management and Budget expressed frustration last year with the Energy Department’s oversight of Solyndra, particularly after an auditor said the company’s financial woes cast doubt on its future, according to a memo yesterday from Democratic staff on the House Energy and Commerce Committee, citing administration documents.

An Energy Department official dismissed the auditor’s warning at the time, saying such a finding was typical for companies planning to sell shares, as Solyndra was, according to the Democrats’ report.... 
The story goes on to say:
... Matt Rogers, then a senior adviser to Energy Secretary Steven Chu, wrote to Ron Klain, at the time Vice President Joe Biden’s chief of staff, that the auditor’s advisory was “standard for companies pre-IPO,” according to the memo. Klain is now a columnist for Bloomberg View.... 
Prior to this stupidity Mr. Rogers was a Director at McKinsey & Co.
I don't think I would hire him.

*I really did think the going concern thing was a negative. That's why we posted "The Daily Start-Up: Auditor Questions Solyndra’s Viability" (Going Concern Warning) GS; FSLR" on April 6, 2010 and the somewhat snarky "Solar upstart Solyndra mothballs IPO plans (Funny what a 'Going Concern" Letter will Do) GS" on June 18 2010:
Okay kids, we (You, me, the U.S. Govvy) just gave these guys a $535 Mil. loan guarantee.
One of their investors is an outfit called Goldman Sachs which advertises that they bring companies public.
What is going on?...

...Now the company is issuing an additional $175 mil. in promissory notes. This just doesn't smell right....
I now know how Alan Greenspan felt in his October 23, 2008 testimony to Congress. Here's the Guardian that afternoon:
Greenspan - I was wrong about the economy. Sort of
The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.

A long-time cheerleader for deregulation, Greenspan admitted to a congressional committee yesterday that he had been "partially wrong" in his hands-off approach towards the banking industry and that the credit crunch had left him in a state of shocked disbelief. "I have found a flaw,"...
You and me both, Maestro.