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Administration grilled on Solyndra loan
Who’s to blame for debacle, lawmakers ask
Obama administration officials refused to say Wednesday whether anybody would be fired over the decision to award solar-panel manufacturer Solyndra LLC a half-billion dollars in loansbefore it went bankrupt and saw its headquarters raided by the FBI.
During a hearing in which two top administration officials defended the $535 million loan deal to Solyndra in 2009, Republicans on the House Energy and Commerce Committee questioned whether Americans could expect any government officials to be fired. The FBI raided the company after it filed for bankruptcy last week.
The committee also raised questions about whether the loan deal came about because of political influence, highlighting an email that they said showed how the White House was trying to hurry a loan approval so Vice President Joseph R. Biden could announce the deal in 2009.
The largest private investor in Solyndra is a venture-capital firm tied to Oklahoma billionaire George Kaiser, a fundraiser for Barack Obama's 2008 presidential campaign.
Rep. Henry A. Waxman of California, the committee's ranking Democrat, also noted during the hearing that the company's investors included Madrone Capital Partners, which has ties to Wal-Mart's Walton family, which has often backed Republicans.
Much of the toughest questioning by the committee was directed at Jonathan Silver, head of the Department of Energy's loan program, which approved the loan.
Rep. Tim Murphy, Pennsylvania Republican, accused Mr. Silver of throwing his subordinates "under the bus."
"What do you do for a living?" an angry Mr. Murphy asked.
"We work to the fullest of our capabilities, congressman," Mr. Silver replied.
Rep. Cliff Stearns, Florida Republican and chairman of the House Energy and Commerce investigations subcommittee, pressed Mr. Silver on whether anybody should be fired.
"I'm saying we are doing the best job we know how to do," Mr. Silver said, declining to answer the question.
The other top official who testified at the hearing, Jeffrey Zients, deputy director of the Office of Management and Budget, told the committee that neither he nor his staff met or talked with Mr. Kaiser. White House records show that in March 2009, Mr. Kaiser met with Jason Furman, who was then deputy director of the White House's National Economic Council.
The hearing Wednesday came amid reports that the Treasury Department's office of inspector general also is investigating the loan deal.
Company executives busy
Solyndra became the first company to get a Department of Energy loan guarantee through the stimulus program, and it was hailed as an example of job creation and clean-energy technology by the White House. Both Mr. Zients and Mr. Silver said they didn't know why Solyndra was raided by the FBI last week.
President Obama toured the company last year, saying Solyndra expected to hire 1,000 workers and make enough solar panels over the lifetime of the plant it was building that it would be like replacing eight coal-fired power plants.
Mr. Biden, along with Energy Secretary Steven Chu, announced the award of federal loans to the company in 2009. Mr. Biden said the announcement was part of an "unprecedented investment this administration is making in renewable energy and exactly what the Recovery Act is all about."
Solyndra executives did not appear at the hearing, though they were expected to attend last week.
"Given the timing of the hearing, legal complexities arising from last week's activities and the urgency of bankruptcy proceedings, [Solyndra executives] will not be able to appear," Solyndra spokesman Dave Miller said, adding that talks were ongoing about a date for them to voluntarily testify.
Mr. Miller said the company's top two executives, Chief Executive Officer Brian Harrison and Chief Financial Officer Bill Stover, were working in California to "engage in potential purchasers."
The question of whether market conditions or the Obama administration was more to blame for taxpayers potentially losing a half-billion dollars in loans to the company fell mostly along political lines during the hearing.
Mr. Stearns said the rush to spend stimulus money impacted the quality of oversight by the Office and Management and Budget and the Department of Energy.
One of the documents reviewed during the months-long Republican investigation cited by Mr. Stearns show the White House had scheduled a 2009 groundbreaking ceremony with Mr. Biden and Mr. Chu before the loan deal was finalized, he said.
Mr. Stearns also cited an email to the vice president's office from a senior OMB official uncovered by congressional investigators. The OMB official wrote, "We have ended up with a situation of having to do rushed approvals on a couple of occasions. … [W]e would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement, rather than the other way around."
In another email in late August 2009, a special assistant to White House Chief of Staff Rahm Emanuel contacted senior OMB staff asking whether "there is anything we can help speed along on OMB side." At the time, the White House was talking of scheduling an announcement highlighting the loan deal, but OMB had not finalized its review.
Another OMB staff member, who received a forwarded copy of the email, responded, "I would prefer this announcement be postponed. … This is the first loan guarantee, and we should have full review with all hands on deck to make sure we get it right."
In the end, OMB completed its review and the groundbreaking event at Solyndra went ahead as scheduled on Sept. 4. But in a report released by Republicans on the House Energy and Commerce Committee, officials said documents show that OMB staff working on the loan approval felt pressure from the White House to finish their work in time for the groundbreaking, which also was attended by Mr. Chu and Arnold Schwarzenegger, a Republican who was California's governor at the time. Mr. Biden appeared via a satellite feed.
"And out there at Solyndra, you guys have figured it out," Mr. Biden said. "You figured out how to harness the sun's power for a better, more efficient, more prosperous future for all of America, and you're creating more jobs."
In his remarks, Mr. Schwarzenegger said the project would create thousands of jobs, and he applauded the Obama administration.
"So let's give a big hand to President Obama and the Obama administration for this great job," Mr. Schwarzenegger said.
After the company's bankruptcy two years later, administration officials defended the decision to award Solyndra the loans in 2009, saying the company fell victim to unforeseen difficulties in the solar industry and that its finances were scrutinized by government officials before awarding the loans.
Mr. Silver said China began flooding the market with cheaper solar panels because the Chinese government was providing massive subsidies to solar manufacturers and that in turn "drove the price curve down in a very significant fashion."
Republicans also ripped the decision to allow a loan restructuring, in which new investors who poured $75 million into Solyndra would be paid back before taxpayers in case of a default.
Mr. Waxman said the loan deal deserves scrutiny, and he raised questions about whether there was proper vetting and whether the company misled federal officials about its finances. He said the company even briefed him personally on its finances and assured him it was in solid shape. Still, he said, the company's collapse shouldn't keep the government from backing solar-energy initiatives.
But Rep. Mike Pompeo, Kansas Republican, said the collapse wasn't surprising. He said that's what happens when the government tries to pick winners and losers.
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