Sept. 14 (Bloomberg) -- President Barack Obama’s aides pressured White House budget officials to complete a review of a $535 million U.S. loan guarantee to Solyndra LLC, a solar-panel maker that has filed for bankruptcy protection, according to a U.S. House committee report based on e-mails and documents.
Republicans on the House Energy and Commerce Committee released the findings of a seven-month investigation into U.S. support for Fremont, California-based Solyndra today before a hearing where two administration officials faced questions about White House support for the company and its goals for clean energy.
The Department of Energy and the Office of Management and Budget “did not take adequate steps to protect taxpayer dollars,” according to the report.
Solyndra, promoted by the Obama administration as a successful example of the use of stimulus money to spur development of a clean-energy industry, filed for bankruptcy on Sept. 6, and two days later its offices were raided by the Federal Bureau of Investigation.
“Was Solyndra just one bad bet by an administration rushing to claim credit for the first loan guarantee, or is it the tip of the iceberg?” said Committee Chairman Fred Upton, a Michigan Republican.
Documents collected during the Republicans’ investigation “raise troubling questions” about whether the staff at the Office of Management and Budget “was rushed to complete its review of the Solyndra loan guarantee by Sept. 4, 2009, in time for a groundbreaking event organized at Solyndra’s facilities organized by the White House,” according to the report.
White House officials wanted Vice President Joe Biden and Energy Secretary Steven Chu to participate in the event.
Obama administration officials weren’t trying to influence or accelerate the Solyndra review, White House spokesman Jay Carney said today. The e-mails in the committee report show only that “there was an urgency to make a decision about a scheduling matter,” he told reporters traveling with Obama to an event in North Carolina. “People were simply looking for answers about whether or not they can move forward.”
Carney said he hasn’t discussed the matter with Obama. The administration stands by its investments in alternative-energy technology, he said.
Jonathan Silver, executive director of the Energy Department’s loan office, told the committee that pressure from China, not senior administration officials, led the department to support clean-energy companies. That nation provided $30 billion in credit to its largest solar manufacturers last year, about 20 times the U.S. investment, Silver said.
“The question is whether we are willing to take on this challenge, or whether we will simply cede leadership in clean energy to other nations and watch as tens of thousands of jobs are created overseas,” Silver said.
The Republicans’ report found that the average review time for loan-guarantee projects after Sept. 1, 2009, was 28 days, and the review of Solyndra’s proposal, from the Energy Department’s first presentation to OMB, was nine days.
Earlier in the approval process for Solyndra, in an e-mail on March 10, 2009, an official at OMB wrote a colleague, “This deal is NOT ready for prime time.”
Republicans criticized the administration officials for agreeing to let taxpayer support for Solyndra take a back seat to $75 million in funds from new investors in an effort to save the company in a restructuring of the loan terms completed earlier this year.
“The rapid decline of Solyndra after the restructuring also raises questions about DOE’s analysis of the company and the market,” the committee report, referring to the Department of Energy.
The financial model used by a credit-rating company to review the Solyndra guarantee showed “the project would run out of cash in September 2011,” according to the report.
“This is a liquidity issue,” according to an Aug. 20, 2009, e-mail between Energy Department officials who weren’t named in the report.
“Should anyone be fired?” Cliff Stearns, a Florida Republican and chairman of the Energy Committee’s investigations panel, said.
Silver said the restructuring gave the company “a fighting chance to compete and succeed.” Between the new agreement and the bankruptcy filing, Solyndra paid employees and suppliers more than $200 million, he said.
Silver and Jeffrey Zients, deputy director of the White House Office of Management and Budget, were the only witnesses today before the House Energy and Commerce panel, after executives from Fremont, California-based Solyndra delayed their appearances.
An Energy Committee spokesman said Brian Harrison, Solyndra’s chief executive officer, and Bill Stover, the chief financial officer, will testify on Sept. 23.
Representative Henry Waxman, a California Democrat, said executives painted “rosy scenarios” about the company’s finances two months before it shut down in meetings with members of Congress.
Republicans and Democrats disputed the role George W. Bush’s administration played in the process, as well as the value of supporting clean energy.
Stearns said a credit-review committee in January 2009, when Bush was president, denied approval of Solyndra’s application and asked loan program officials for more information.
“Only after the Obama administration took control, and the stimulus passed, was the Solyndra deal pushed through,” Stearns said.
Silver said it wasn’t unusual for the credit committee, made up of career employees from federal agencies, to seek additional details during the loan process. Two months later, after Obama took office, the committee unanimously approved the application, Damien LaVera, an Energy Department spokesman, said in an e-mail.
The Energy Department has provided about $9.6 billion in loan guarantees to 18 developers and manufacturers since 2009, including $1.2 billion yesterday to Abengoa SA of Seville, Spain, for its Mojave Solar Project, a 250-megawatt facility in San Bernardino County, California.
An additional 14 projects have received conditional commitments for $9.2 billion in guarantees, according to the Energy Department website.
Silver said most projects are for the generation of renewable energy, not clean energy manufacturing, and have different “risk profiles than Solyndra.”
Representative Edward Markey, a Massachusetts Democrat, said the U.S. was in a “global race” to develop clean energy technologies.
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