A White House budget official warned a last-ditch Energy Department plan to save Solyndra LLC from collapsing could end up costing taxpayers tens of millions of dollars more than letting the company close, according to a report by the Republican-led House Energy Committee.
Kelly Colyar, an analyst at the Office of Management and Budget, estimated the U.S. could lose about $141 million if Solyndra shut its doors in January 2011, as the department and private investors negotiated a deal to restructure the terms of the solar-panel maker’s U.S. loan, the report released today said.
The Energy Department went ahead with the restructuring plan, which put taxpayers behind private investors in the case of Solyndra’s collapse. Colyar estimated losses could grow to $385 million under the plan. The company filed for bankruptcy six months after the restructuring was approved.
Colyar’s concerns were included in the 154-page report, the culmination of an 18-month investigation into Solyndra’s $535 million loan guarantee, the first awarded under Obama’s 2009 economic stimulus.
“Solyndra is a prime example of the perils that come when the federal government plays investor, tries to keep a company and industry afloat with subsidies, and attempts to pick the winners and losers in a particular marketplace,” the report concludes.
Damien LaVera, an Energy Department spokesman, said in a statement that “decisions related to this loan were made solely on the merits after careful review by experts in our loan program.” A White House official said the report failed to find any political influence in the Solyndra award.
Senior officials at the budget office, including then-director Jack Lew, who is now the White House chief of staff, knew about the concerns of OMB staff and decided not to intervene, letting Energy officials determine whether to go forward with the restructuring, according to the report.
Colyar said recoveries under an immediate liquidation would be “significantly HIGHER than DOE’s estimate,” meaning that the government “is better off liquidating the assets today than restructuring,” according to the report, which quoted January e-mails from Colyar. The content of the e-mails were reported by the Washington Post.
Solyndra filed for bankruptcy in September, firing its 1,100 workers.
“Mr. Lew and the White House owe the American people an explanation, as they squandered hundreds of millions of dollars,” House Speaker John Boehner, an Ohio Republican, told reporters today.
White House spokesman Eric Schultz said in a statement that Republicans had failed to show Solyndra’s award was influenced by political connections, as they have alleged, despite collecting about 300,000 pages of e-mails and other documents from the administration and private investors.
Budget officials ultimately determined the Energy Department’s approach to the restructuring “was reasonable and reflected the information as it was understood at that time,” Moira Mack, an OMB spokeswoman, said in an e-mail.
Solyndra’s collapse has proved a political embarrassment to the White House and President Barack Obama, who in a May 2010 visit to the company said it showed that “the promise of clean energy wasn’t just an article of faith.”
Mitt Romney, Obama’s Republican rival for the White House, visited the shuttered factory in Fremont, California, in May, describing it as a symbol of Obama’s broader failure to revive the economy through the 2009 economic stimulus.
The stimulus financed about $16 billion in clean-energy loan guarantees, including Solyndra’s, the first awarded by the administration.
Much of the information in the report has been released before in e-mails and other documents the House Energy and Commerce Committee collected as part of its investigation, such as White House staff working to promote the deal before the OMB signed off on the guarantee and worrying by some officials about backing a company that faced competition from lower-cost Chinese solar panels.
The Energy Committee yesterday advanced a bill that would end the loan-guarantee program by prohibiting the Energy Department from considering support for projects that sought U.S. aid after Jan. 1. The bill would allow existing applications under consideration prior to that date to go forward.
Republicans led by Representative Cliff Stearns of Florida, the chairman of the committee’s investigations panel, have suggested the White House sought to help Solyndra to benefit George Kaiser, a campaign donor to Obama whose foundation was the company’s leading investor.
Kaiser was “closely involved in financial decisions related to Solyndra,” the report states.
Nothing in the report, however, shows the White House intervened on behalf of Solyndra to benefit Kaiser, who told the committee he didn’t lobby on behalf of the company.
E-mails in August 2011 from an official at Argonaut Private Equity of Tulsa, Oklahoma, the investment arm of Kaiser’s foundation, show he sought to avoid two calls from Jonathan Silver, then executive director of the loan program, as the department was considering a second restructuring.
That plan was rejected by administration officials and Solyndra closed.