White House Orders Review of Energy Department’s Loan Program

White House Orders Review of Energy Department Loan Program
Tyler Fagrey moves completed cylindrical shaped solar cell modules at the Solyndra Inc. manufacturing facility in Fremont, California. Photographer: Ken James/Bloomberg

The Obama administration ordered a review of the Energy Department’s loan program as House Republicans consider subpoenaing more White House records about a guarantee for failed solar-panel maker Solyndra LLC.

The analysis, to be conducted by former Treasury official Herbert Allison, will look at the department’s loan portfolio and focus on future monitoring and management, William Daley, President Barack Obama’s chief of staff, said in a statement.

“While we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars,” Daley said yesterday.

The Energy Department’s $535 million loan guarantee for Solyndra in 2009 has become the focus of a political controversy and a congressional investigation after the Fremont, California-based company filed for bankruptcy protection on Sept. 6.

The administration has repeatedly defended its efforts to support development of alternative energy sources since Solyndra’s collapse. Obama has cited the need to compete with China’s investment in clean-energy technology.

Energy Secretary Steven Chu said in a statement yesterday that the department’s loan programs “are putting thousands of Americans to work” and will help the U.S. compete for clean-energy jobs. Chu said he welcomed the review and directed staff to cooperate to ensure it’s “thorough and productive.”

Committee Hearing

Republicans on the House Energy and Commerce Committee called a hearing for Nov. 3 to consider subpoenaing White House e-mails and documents about the process under which Solyndra got the guarantee.

“Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration’s stonewall on Solyndra,” Representatives Fred Upton, a Michigan Republican and chairman of the committee, and Cliff Stearns, a Florida Republican who leads the committee’s investigations panel, said yesterday in a statement.

The energy panel has been investigating the Solyndra loan since February. In July, the committee subpoenaed documents from the White House’s Office of Management and Budget, which was responsible for weighing the risks of issuing Solyndra the guarantee, which was part of the president’s economic stimulus.

Solyndra made cylindrical thin-film solar panels and it used the loan guarantee to build a manufacturing facility. Republicans cited Solyndra’s closing of an old factory and its June 2010 decision to cancel a $300 million initial share offering as signs the company may not have been qualified for the U.S. guarantee.

Solyndra Investigation

Since then, Upton and Sterns have raised questions about whether Solyndra got favorable treatment because of connections to political donors, which the White House has denied. Following the company’s bankruptcy filing, the FBI began an investigation into Solyndra’s loan application.

The House action next week may escalate the congressional investigation into the failed solar-panel maker, and force a legal fight over the White House’s right to keep internal deliberations confidential.

The administration has already given Congress more than 70,000 pages of documents from federal agencies involved in the Solyndra loan guarantee, Kathryn Ruemmler, counsel to Obama, said in an Oct. 25 letter to Upton and Stearns denying for a second time in a month their request for internal documents.


Satisfying the demand would interfere with the ability of the president’s advisers to engage in “candid deliberations,” Ruemmler wrote in the letter.

“We believe agency communications with the White House are the best source of information to accommodate the committee’s interest in this matter,” she said.

Upton and Stearns said that “internal White House communications about a loan guarantee to a solar panel manufacturer” doesn’t raise issues of national security “or the other foundations upon which the Supreme Court has recognized” executive privilege.

In a statement, Allison said the administration recognizes the challenges in managing the energy loan programs.

“My goal is to assess the current financial state of the portfolio and to ensure effective monitoring and management of the loan portfolio going forward,” he said.

Allison, 68, was named by Obama in 2009 as assistant secretary of Treasury to oversee the Troubled Asset Relief Program. During the Bush administration, he was named president of Fannie Mae after it entered into government conservatorship in September 2008. He previously served as chairman and chief executive officer of TIAA-CREF, the largest retirement-plan manager for U.S. teachers. He was chairman of Senator John McCain’s presidential campaign in the 2000 Republican primaries and before that served as president and chief operating officer of Merrill Lynch & Co.

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