The House Energy and Commerce Committee released documents Wednesday suggesting that a $535 million federal loan to Solyndra, a recently bankrupted solar energy company, was hastily approved to accommodate the White House.
At a Wednesday hearing of the committee’s oversight group, House Republicans pointed to emails obtained from the Department of Energy and the White House Office of Management and Budget, which they said showed the Solyndra loan was fast-tracked to fit the White House’s scheduled announcement of the move as part of President Obama’s green jobs initiative.
“The political pressure to approve the Solyndra deal appears to have caused DOE and OMB to miss or disregard numerous shortcomings regarding Solyndra’s financial viability,” read a memorandum from the committee released at the meeting. (RELATED: Obama admin. marches forward with green agenda despite scandal)
On Jan. 9, 2009, in the waning days of the Bush administration, the DOE Credit Committee remanded the Solyndra loan application for further review. “The number of issues unresolved makes a recommendation for approval premature at this time,” the credit committee wrote.
But after Obama took office and began advancing his “shovel-ready” stimulus projects, the Solyndra loan picked up steam again despite lingering problems, Republicans said.
“It appeared the project this shovel was ready for was a burial, but somehow it was resurrected,” said Republican Rep. Michael Burgess of Texas in his opening statements.
Emails between DOE staffers, obtained by the committee, indicate continuing uncertainty about Soyndra’s ability to pay back the $535 million taxpayer loan.
“The issue of working capital remains unresolved … the issue is cash balances, not cost,” states one DOE email from August 20, 2009. “[Solyndra] seems to agree that the model runs out of cash in Sept. 2011 even in the base case without any stress. This is a liquidity issue.”
In the email, the DOE staffer goes on to ask “how we can advance a project that hasn’t funded working capital requirements and that generates a working capital shortfall of $50 [million] when working a capital assumptions are entered into the model?”
The White House, however, was highly anticipating the closure of the loan, and it had scheduled an announcement for Sept. 4 — just two weeks later.
“[G]iven the time pressure we are under to sign-off on Solyndra, we don’t have time to change the model,” one OMB staffer wrote on August 27, 2009.
The loan to Solyndra was approved. On Sept. 4, 2009, Vice President Joe Biden announced via satellite at a ground-breaking event that the loan was “part of the unprecedented investment this Administration is making in renewable energy and exactly what the Recovery Act is all about.”
Two years later, in the exact month the DOE email predicted, Solyndra announced its bankruptcy.
Democratic committee members and witnesses from the DOE and OMB contended at today’s hearing that the loan process, including DOE vetting, began under the Bush administration. They said that although Solyndra’s failure warranted an investigation, one company’s failure should not undermine President Obama’s green jobs initiative as a whole.
“I don’t think we should use this failure to discredit what is an important loan guarantee to be able to compete with China,” Democrat Rep. Henry Waxman said.
Both Waxman and fellow Democratic Rep. Diane DeGette said Solyndra executives met with them earlier in the year and assured them the company was on a profitable course and could remain competitive in the marketplace.
The two witnesses at today’s hearing, DOE Loans Programs executive director Jonathan Silver and OMB Deputy Director Jeffrey Zients, said there was no political pressure to approve Solyndra’s loan, which they said was vetted with extensive due diligence.
During a back-and-forth exchange with committee Republicans, however, Silver danced around the question of whether he had any contact with the White House regarding the Solyndra loan.
“I don’t recall who would have been involved directly, but what I can tell you is that the discussions around the transactions were on a career-staff to career-staff basis,” Silver said after being asked repeatedly to answer.
Silver also would not answer whether or not he made the decision to “subordinate” Solyndra’s $535 million loan — meaning the company’s private shareholders, some of whom are large Democrat donors, would be repaid before taxpayers — saying the question “did not have a yes or no answer.”
Silver and Democrats also shot back at the accusation by Republicans that the loan program was “picking winners and losers.” Silver said program helped fund innovative technology that might not otherwise get funded, giving the market a chance to take a look at it.
Risks, he said, were inevitable.
“This isn’t picking winners and losers,” Silver said. “It’s helping ensure that we have winners here at all.”
Silver and Zients are both political appointees.