House passes ‘No More Solyndras Act’
On Friday the House of Representatives voted 245-161 to pass a bill that would phase out the Department of Energy loan guarantee program that allowed the now bankrupt solar company Solyndra to get a $535 million taxpayer funded loan guarantee.
Twenty-two Democrats voted for the bill, and only four Republicans voted against it.
“Solyndra is the most visible but far from the only example of Title 17 failures. In fact, it is hard to point to a single loan guarantee success story under this program,” House Energy and Commerce Committee Chairman Fred Upton said on the House floor Friday morning before the passage of the bill.
The bill, called the No More Solyndras Act, also prohibits new loans from being issued to companies that applied for one after December 31, 2011.
The Treasury Department would also be required to analyze the loans and the Department of Energy would have to report information to Congress about new loans, including a review of the department’s decision-making process and the terms of the agreement.
Furthermore, the bill imposes penalties on executive branch officials, including removal from office, suspension without pay, and fines up to $50,000, for violating the law.
“Developing new energy sources and technologies is an important part of our all-of-the-above approach, but it is clear that this loan guarantee program is ineffective at best, and counterproductive at worst,” Upton continued.
Democrats have criticized the bill, arguing that loan guarantees are necessary for the development of alternative energies in the country.
“There is an urgent need for investment in new technologies in America,” Democrat Congressman Mike Honda of California wrote in an op-ed.
“There is an urgent need for venture risk in America, and the federal government must be involved through programs like the Department of Energy’s loan guarantees,” Honda continued.
Last September, the solar panel manufacturer filed for bankruptcy and two days after was raided by the FBI. The Energy and Commerce committee investigated and in August released their findings that the loan guarantee program was poorly managed and lacked sufficient safeguards for taxpayers.
“Our extensive investigation of Solyndra has uncovered a story worse than anyone could have ever imagined,” Upton said. “It is amazing to me that the administration gave a half-billion dollar loan guarantee to a company its own experts predicted would fail, a company so dysfunctional that it burned through this giant handout and went bankrupt in just two years.”
“Even worse, when it became clear to the administration that Solyndra was in trouble, it chose to double down on the risky bet, gambling even more taxpayer dollars with a desperate loan restructuring instead of trying to cut its losses and move on,” Upton added.
After Solyndra’s bankruptcy ran in the headlines, stories of other renewable energy companies that received DOE funds made headlines as well.
Beacon Power, an energy storage company, received a $43 million loan guarantee from the Department of Energy and filed for bankruptcy in October 2011, holding $47 million in debt.
Abound Solar received an approval for a $400 million loan guarantee and drew nearly $70 million of the loan guarantee, but the company is now bankrupt and shutting down.
Fisker Automotive, an electric car maker, got a $529 million loan, took $193 million of the loan and is currently looking to conserve cash and has made layoffs in Delaware and California.
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