Role of White House Aides Questioned in Solyndra Hearing
WASHINGTON (AP) — House Republicans questioned Wednesday whether the White House rushed approval of a half-billion-dollar loan guarantee for a now-bankrupt solar panel manufacturer once cited as the kind of renewable energy company worthy of federal stimulus money.
Solyndra Inc. was a major presence in Washington and spent millions of dollars on lobbying there, particularly about the Energy Department’s loan guarantee program. And its executives raised thousands of dollars for Obama and Democrats in Congress.
The collapse of the Fremont, Calif.-based company once touted by President Barack Obama ultimately left taxpayers on the hook for $528 million, raising questions if the loan was rushed to accommodate a company event in September 2009 that featured Vice President Joe Biden.
The congressional panel examining the loan disclosed emails that appeared to show senior staff at the Office of Management and Budget chafing about having to conduct “rushed approvals” of federal loan guarantees designed to help jumpstart the nation’s renewable energy industry.
“We 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,” said one of the emails from an unnamed OMB aide to Biden’s office.
Obama cited Solyndra as an example of how the economic stimulus bill would create jobs. But the company has since filed for bankruptcy and shed 1,100 workers, saying it couldn’t compete with foreign manufacturers of solar panels.
Documents reviewed by The Associated Press show Solyndra spent nearly $2 million lobbying the federal government during the last four years, including on provisions of the Energy Department’s loan program just months before White House officials urged that the funds be approved.
In the first quarter of 2009, Solyndra paid McBee Strategic Consulting $20,000 to lobby on issues related to the Energy Department’s loan guarantee program, records show, and it paid $30,000 in early 2008 to Dutko Worldwide to handle Solyndra’s loan application.
Republican lawmakers on the House Energy and Commerce Committee’s investigations panel are questioning why there was a rush to approve the loan and whether the entire loan guarantee program is warranted. “Our investigation raises several questions about whether the administration did everything it could to protect taxpayer dollars,” said the committee’s chairman, Rep. Fred Upton, R-Mich.
White House spokesman Jay Carney said the emails don’t suggest that the White House was pushing for the loan to be made.
“What the emails make clear is there was urgency to make a decision on a scheduling matter. It is a big proposition to move the president or to put on an event and that sort of thing so people were simply looking for answers about whether or not people could move forward,” Carney told reporters at the White House.
“It had nothing to — and there is no evidence to the contrary — nothing to do with anything besides the need to get an answer to make a scheduling decision,” he said.
The Obama administration and Democratic lawmakers have aggressively sought to invest in renewable energy projects as a way to create jobs and to reduce the nation’s reliance on oil. They note that other countries are also investing heavily in solar and that the race for solar manufacturing jobs is worth winning because the global market is going to be worth trillions of dollars.
The Solyndra fallout comes at an embarrassing time for the White House, while Obama is traveling the country promoting his jobs plan, which includes more investments in renewable energy.
The subcommittee has been investigating Solyndra for nearly six months as it began to have financial troubles. Shortly after the filing, FBI officials raided the company’s headquarters; the company said the FBI was seeking records on the loans.
An AP review of Federal Election Commission records shows Solyndra executives have given to both Obama and Democratic-aligned groups. Ben Bierman, Solyndra’s executive vice president, and Karen Alter, the firm’s marketing vice president, contributed more than $3,500 to Obama’s campaign. And one of the company’s investors, George Kaiser, was a “bundler” for Obama’s 2008 campaign, raising between $50,000 and $100,000 for the president, records show.
Democrats on the Energy and Commerce Committee had questioned the basis of the Solyndra investigation and in July had voted against issuing subpoenas for documents from OMB. But after the bankruptcy and FBI raid, Rep. Diana DeGette, D-Colo., described the loan Wednesday as a “debacle.”
But Democrats also argued that it’s not clear whether the company’s financial woes were just a result of unforeseen market conditions or sloppy vetting or corporate malfeasance.
Democrats also said that failure to invest in the U.S. solar industry would amount to an economic death sentence that would allow other nations to dominate a growing business.
“If you live in reality, you know the world cannot continue its dependence on fossil fuels and that we are in danger of losing this industry to our competitors, especially China,” said Rep. Henry Waxman, D-Calif.
Federal officials told lawmakers that Solyndra went through three years of review, beginning with the Bush administration, before any taxpayer money was put at risk. Jonathan Silver, executive director of the Energy Department’s loan program office, said that the company was well positioned to succeed in 2009.
But Chinese companies have flooded the market with inexpensive panels, and Europe’s economy weakened demand from customers. The result has been an unprecedented drop in solar cell prices this year.
Silver said the loan guarantee program is about giving U.S. companies the tools they need to succeed in the world marketplace, and one of those tools, as other countries have learned, is low-cost financing.
“This isn’t picking winners and losers. It is helping ensure that we have winners here at all,” Silver said.
But GOP officials disputed that the Bush administration was willing to go along with a loan guarantee for Solyndra, noting that an Energy Department committee voted against offering a conditional commitment to Solyndra in January 2009. The committee said the deal was premature and questioned its underlying financial support, said Rep. Cliff Stearns, R-Fla., chairman of the House energy panel.
Two Solyndra executives were asked to testify Wednesday but are now expected to appear next week.
Under a loan guarantee, the government will cover a loan in the event of a default. Normally, private banks provide the loans, but in this case, Solyndra borrowed the money from the Federal Financing Bank. The government guaranteed up to $535 million in loans, and Solyndra’s bankruptcy filings showed that it has received almost $528 million in federal loans.
Associated Press writer Matt Daly contributed to this report.