Oct. 15 (Bloomberg) -- U.S. House Republicans expanded the investigation of Solyndra LLC., which received federal backing two years before it collapsed, to include the role an investor played in getting the company close to winning Navy work.
“It is being looked at,” Representative Joe Barton, a Texas Republican, said yesterday after a House Energy and Commerce panel hearing on Solyndra’s $535 million U.S. loan guarantee. “The primary focus is on the Department of Energy, but it goes throughout the government.”
At the hearing, Treasury Department officials said an effort to save Solyndra last February was the first case they recalled in which private investors gained priority over U.S. taxpayers.
Gary Grippo, deputy assistant Treasury secretary for government financial policy, and Gary Burner, chief financial officer of Treasury’s Federal Financing Bank, told the committee that February’s restructured agreement was unusual.
Republicans have said making taxpayer debt subordinating taxpayer debt to $75 million in new money in a last-ditch effort to avoid bankruptcy by Solyndra was illegal. They cite administration e-mails in which Treasury Department officials raise the same question.
In the Navy case, the Pentagon picked the solar-panel maker to get $400,000 of a $1 million pilot program, said Navy Lieutenant Richlyn Neal, a spokeswoman. Discussions ended when Solyndra filed for bankruptcy on Sept. 6, she said yesterday in an e-mail.
“As we found out about the situation with the company, it just didn’t seem prudent for us to be pursuing that and we quickly went to the next one down the list,” said Thomas Hicks, deputy assistant secretary of the Navy for energy, in a telephone interview.
Solyndra was chosen from among 161 companies identified by the Pentagon’s Defense Venture Catalyst Initiative, formed a decade ago to spot emerging technologies with potential military applications, Hicks said. Solyndra investor RockPort Capital Partners was one of 26 firms serving as consultants to the Pentagon, according to the initiative’s website.
The Wall Street Journal said yesterday that RockPort principal Kevin Kopczynski, a member of the advisory group, pushed Solyndra and four other companies for the program. Kopczynski told the Journal he disclosed RockPort’s financial interest in Solyndra without discussing the deteriorating financial condition at the Fremont, California-based company.
The Pentagon invited 30 companies to participate in an energy-focused workshop sponsored by the initiative in April, Neal said. Three were selected for technology demonstrations at naval installations, she said.
RockPort officials didn’t return calls or e-mails seeking comment on its involvement with the Navy project. The firm invested about $47.5 million in Solyndra, according to financial documents.
Barton said the push by RockPort was additional evidence that investors were promoting Solyndra to the government.
Solyndra won a $535 million federal loan guarantee in September 2009 and two years later filed for bankruptcy and fired about 1,100 workers. It is the subject of congressional and criminal investigations.
E-mails obtained last week show RockPort’s managing general partner David Prend promoting Solyndra to the White House.
In a March 4, 2009, e-mail to a White House official, Prend referred to a meeting the previous week with Carol Browner, the administration’s environmental adviser, as he sought to publicize Solyndra’s technology.
“I look forward to working with you to get the message out and effect real change in the energy industry,” Prend wrote.
Solyndra founder and chief executive officer Chris Gronet sent the same White House official an e-mail two days later, at Prend’s suggestion. The company is “ramping up production to meet a very strong demand,” Gronet wrote to the White House official.
Late yesterday, the White House said it won’t hand over internal communications relating to Solyndra’s loan guarantee to House Republicans, citing Executive Branch confidentiality interests.
Kathryn Ruemmler, counsel to President Barack Obama, said in a letter to the House Energy and Commerce committee that “encroaching” on those interests isn’t necessary because three federal agencies involved with the loan program gave congressional investigators more than 70,000 documents, which include communications between the agencies and White House officials.
To contact the editor responsible for this story: Larry Liebert at email@example.com