New docs show high-risk concern behind DOE loan guarantees other than Solyndra

Energy Secretary Steven Chu goes over his notes as he testifies on Capitol Hill in Washington, Thursday, Nov. 17, 2011, before the House Oversight and Investigations subcommittee hearing on the Solyndra solar company loans. (AP Photo/Evan Vucci)

Newly surfaced confidential documents show credit agency Standard and Poor’s considered Beacon Power — a now-bankrupt green energy storage company — a risky investment, even with the $43 million loan guarantee President Barack Obama’s Energy Department was planning to, and eventually did give the company.

The documents, first obtained by CBS News investigative correspondent Sharyl Attkisson, show how the Department of Energy’s (DOE) Jonathan Silver — the now-former loan guarantee program administrator – asked Standard and Poor’s to conduct a credit analysis prior to investing taxpayer money in Beacon Power.

Silver resigned in mid-October 2011 as congressional inquiries into the DOE loan guarantee program heated up following the loss of $528 million of taxpayer money to solar panel manufacturer Solyndra when it went bankrupt. Solyndra received the first-ever loan guarantee under the program, and was the first to go bankrupt. At least four more loan guarantee recipients have filed for bankruptcy in Solyndra’s wake, and other recipients have shown signs of financial weakness.

In the case of Beacon Power, even if the company ended up receiving the DOE loan guarantee, Standard and Poor’s analysis indicated it still wouldn’t be a smart investment. The credit agency’s ratings services division assigned Beacon Power a “CCC+” Final Rating.

Standard and Poor’s defines a “CCC” rating as “currently vulnerable” and “dependent upon favorable business, financial, and economic conditions to meet its financial requirements.”

California Republican Rep. Darrell Issa, the chairman of the House Committee on Oversight and Government Reform, is one of the leaders in Congress spearheading investigations into the DOE’s loan guarantee program. On Friday morning, Issa released a letter he sent to Energy Secretary Steven Chu on Jan. 3 demanding answers.

Issa’s letter requested documents detailing how and why the DOE approved Beacon Power’s $43 million loan guarantee despite Standard and Poor’s “CCC+” rating, which falls below the DOE’s own required “BB” rating for a company to qualify for taxpayer assistance. Additionally, Issa requested Chu provide information on every company that was given a rating during the loan guarantee process. That letter gives Chu until 5 p.m. next Tuesday, Jan. 17, to respond.

NEXT PAGE >>