Aug. 3 (Bloomberg) -- U.S. House Republicans have closed their 18-month investigation of Solyndra LLC’s loan guarantee after issuing three subpoenas, conducting five hearings and reviewing than 300,000 documents. Now, the issue lives on in the presidential campaign.
Backing fledgling companies such as Solyndra, which received a $535 million loan guarantee before it collapsed two years later, already has become a feature in political attack ads. Republicans and allied groups have used Solyndra as a metaphor for what they see as President Barack Obama’s broader failure to revive the economy.
“Solyndra is President Obama’s baby,” said Benjamin Cole, a spokesman with the American Energy Alliance, an industry-backed lobbying group that says it supports free-market principles. “He raised it, nursed it with the milk of taxpayer dollars and now avoids any claim to paternity.”
The alliance, which in March featured Solyndra in an ad critical of Obama’s energy policies, plans to raise it during a five-week bus tour in the U.S. to promote fossil fuels.
Solyndra is “a critical component” to explain to voters why “Obama’s energy policies have failed,” Cole said.
The House Energy and Commerce Committee, after an 18-month investigation, yesterday said Solyndra showed how a desire to “create political events” to show off administration policies can result in “poor decision-making.”
The Republican National Committee quoted extensively from the report on its website after its release. “Solyndra was intended to be an example of the stimulus creating jobs,” the committee said.
Already decisions by the Obama administration on the energy loan-guarantee program have been a feature of political ads from Mitt Romney, Obama’s Republican opponent for the White House, and political groups that oppose clean-energy subsidies.
Romney, in a visit to Solyndra in Fremont, California, in May, said its shuttered factory was a symbol of Obama’s failed efforts to revive the economy. A Romney political ad campaign that asks, “Where did the Obama stimulus money go?” lists Solyndra among the answers.
The political attacks probably will continue, though by themselves will have limited impact on the election, said analysts such as Bruce Oppenheimer, a political science professor at Vanderbilt University in Nashville, who has studied energy policy and politics.
“This is another piece of wood on the fire,” Oppenheimer said in an interview. “It’s part of the Republican campaign to talk about the lack of competence. It’s not a big piece of wood, but they will hit on it again and again.”
Paul Bledsoe, a former White House energy aide to President Bill Clinton, said in an interview that Solyndra is part of a broader Republican narrative that government shouldn’t meddle with the economy.
“I don’t think that has resonance,” he said.
Critics won’t find much new material in the House committee’s 154-page report.
Findings that the Energy Department ignored “red flags” about Solyndra’s financial trouble in 2010 or that White House officials were interested in promoting the company’s award before the administration review was completed were previously disclosed by the committee.
Democrats said yesterday that Republicans didn’t back up allegations that Solyndra won its award because of connections to a prominent Obama campaign donor, Oklahoma billionaire George Kaiser, whose foundation was the leading investor in the solar company.
“This is month 18 of this congressional investigation and everything disclosed in the 215,000 pages of documents, 14 committee staff briefings, 5 congressional hearings, 72,000 pages from Solyndra investors and committee interview with George Kaiser affirms what we said on day one: This was a merit-based decision made by the Department of Energy,” White House spokesman Eric Schultz said yesterday in a statement.
House Democratic staff called the Republican report “partisan and one-sided.”
One new bit of information was an e-mailed warning from an OMB official about the Energy Department’s plan to restructure the terms of the loan.
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, the report said. Losses would expand to $385 million under the restructuring plan, she estimated.
The Energy Department went ahead with revising the loan’s terms, which put taxpayers behind private investors in case Solyndra collapsed. The company filed for bankruptcy six months after the restructuring was approved.
“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 Republican report concludes.
Energy Department officials have said the restructuring was necessary to convince private investors to spend another $75 million to support the company.
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.
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 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 yesterday.
Burdett Loomis, a political science professor at the University of Kansas, said voters probably will dismiss the Solyndra controversy as “politics as usual.”
“It’s mostly grist for conservative blogs,” Loomis said in an e-mail “The impact on the election is probably close to nil.”
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