Energy Secretary Stephen Chu refused to apologize or admit any serious error in the handling of the Solyndra loan Thursday, leading one House Republican to call for his firing.
During his testimony before the House Energy and Commerce Committee Thursday, committee members grilled Chu over the Energy Department’s $535 million loan to bankrupt solar company Solyndra.
Chu admitted the Solyndra loan was a “regrettable” failure, but he denied the decision to award the loan was politically motivated or the result of incompetent vetting.
Committee chairman Fred Upton asked Chu pointedly, “Who is to apologize for the half a billion dollars that has been out the door?”
“Well, it’s extremely unfortunate what has happened with Solyndra,” Chu responded. “If you look back and look at the time, the decisions being made, was there incompetence, was there any influence of a political nature? And I would have to say no.”
Chu said the Solyndra failure was due to an unexpected and precipitous fall in the price of solar panels — a drop of 70 percent in 2.5 years.
“Fundamentally, this company, and several others, got caught in a very bad tsunami if you will,” Chu said.
The Energy Secretary and Democratic members of the committee, while acknowledging the failure of Solyndra, defended the loan program as necessary to remain competitive with countries like China who heavily subsidize their solar industries.
“When it comes to the clean energy race, America faces two choices,” Chu said. “Compete or accept defeat.”
California Democratic Rep. Henry Waxman said, “Republicans need to stop dancing on Solyndra’s grave.”
Committee members repeatedly questioned Chu on the Energy Department’s decision to subordinate the Solyndra loan, meaning private investors would be paid ahead of federal government in the event of bankruptcy.
Although the rules governing the DOE loans clearly state that they shall not be subordinated, the legal counsel of the Energy Department wrote a decision justifying the action.
Chu said subordinating the loan was “a difficult decision to make,” but it came down to either letting the company go bankrupt or trying to recoup some amount of taxpayers’ money.
Committee members balked at Chu’s justifications.
“When I voted for the 2005 energy bill I never expected taxpayer money would be made a lesser priority than outside investors,” Texas Democratic Rep. Gene Green said. “Having supported that loan guarantee program, we need to change that law because I don’t think we ought to ever let the taxpayers be subordinated.”
When pressed by committee members, Chu said he wasn’t aware at the time of many emails from his own agency, the Office of Management and Budget and the Treasury Department raising questions about the financial health of Solyndra.
He also repeatedly denied any political influence in the Energy Department’s decision to award the Solyndra loan. He said under oath that there was no pressure from the White House nor from Obama campaign contributors, of whom one was a major Solyndra investor.
“It’s not the way I do business,” Chu said. “Those factors are not part of our consideration. Something like that was not discussed with me, and I would not have approved it.”
The Energy Secretary also said he wasn’t aware at the time of the decision to delay an announcement of a round of layoffs at Solyndra until after the 2010 elections.
The answers didn’t sit well with committee Republicans. During a brief recess, Subcommittee chairman Cliff Stearns told reporters Chu should be removed from his position.
“I just think he has failed the test and in my personal opinion I agree with Dan Carol’s email that at this point he should probably be replaced by the president,” Stearns said. “The fact that he’s unaware of so many things makes me think that he’s not the best person for the position.”
Stearns was referring to a recently disclosed Feb. 25 email by former Obama campaign staffer and clean energy advocate Dan Carol. Carol sent the email to the West Wing just as Solyndra was beginning to show signs of financial insolvency. Carol proposed radically restructuring the Energy Department, including replacing Chu.
“I would respectfully suggest that the president be strongly encouraged to make major leadership changes as soon as possible,” Carol wrote.