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ENERGY

GOP Probes Solar Company's Failings

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President Obama tours the Solyndra solar-panel company on May 26, 2010. The company recently declared bankruptcy and is facing a congressional probe into guaranteed government loans that it received.(Photo by Paul Chinn-Pool/Getty Images)

Two top administration officials said on Wednesday they don't know why the FBI raided the federally backed solar-energy company that President Obama once lauded as an example for the nascent industry. The company is now spiraling into bankruptcy amid questions of government favoritism.

Officials from the Energy Department and the White House’s Office of Management and Budget faced hours of scrutiny from members of both parties at a House investigations subcommittee hearing on a $535 million loan guarantee tthat DOE awarded to California-based Solyndra in September 2009—the first loan awarded to a clean-energy company under Obama’s stimulus bill.

 

But the administration’s two witnesses couldn’t effectively answer most of the lawmakers’ questions; neither was in his post when the loan was approved. Jeffrey Zients, OMB acting deputy director, assumed his position in July 2010. And Jonathan Silver, DOE’s loan-guarantee director, took his job in November 2009.

That didn’t stop policymakers—mainly Republicans—from grilling them on a series of e-mails recently uncovered as part of a GOP-led investigation that indicates, among other things, that the White House may have wanted to speed up the approval of Solyndra’s loan to have it ready for Vice President Joe Biden to visit the facility in 2009. Other e-mails suggest that OMB and DOE officials worried that the company could run out of money by September 2011.

“There was a request from the vice president’s office for scheduling logistics of an event,” Zients said of those e-mails, toward the end of the four-hour hearing. He stressed that the timing of Biden's public event had no bearing on OMB's green-lighting of Solyndra’s loan, but Republicans dismissed that assertion.

 

“Why did FBI raid Solyndra?” Investigations Subcommittee Chairman Cliff Stearns, R-Fla., asked Silver, concerning a Sept. 8 raid on the company's headquarters.

“I have no idea,” Silver responded, adding that he was surprised to learn about it. “I was not aware of any investigation.” Zients also said he had no idea why the FBI would be investigating the company.

Both officials were in their positions when the administration decided earlier this year to restructure the loan instead of ending it. They stood by that decision despite Solyndra's later Chapter 11 bankruptcy filing.

“I think there is reason to believe it was reasonable at that point,” Zients said to Rep. Mike Pompeo, R-Kan. Silver echoed his colleague: “Yes, I do.”

 

While most of the hearing focused on the decisions, communications, and potential political factors that led to Solyndra's loan, members of both parties also sought to expand the discussion to what Solyndra’s woes could mean for the government’s role in subsidizing the renewable-energy industry.

“Is Solyndra one bad bet or the tip of the iceberg?” House Energy and Commerce Committee Chairman Fred Upton, R-Mich., asked at the hearing’s onset.

Committee ranking member Henry Waxman, D-Calif., said he “vehemently” disagrees with his GOP colleagues’ conclusion that the “collapse of Solyndra shows the failing of federal investments in solar and other clean-energy technology.”

He and other Democrats said that the United States was losing the renewable-energy race to China, and that competition—especially in light of heavy Chinese-government subsidies for its industry—is largely to blame for Solyndra's bankruptcy.

On Sept. 23, Solyndra CEO Brian Harrison and CFO W. G. Stover, Jr., are expected to testify before the same subcommittee. They were invited to Wednesday’s hearing but canceled.

Some GOP lawmakers have questioned the loan guarantee's connection to Solyndra's private investors. One of them, Tulsa billionaire George Kaiser, was a major Obama fundraiser. 

Waxman pointed out that the application and the loan’s timeline for approval were set during the George W. Bush administration. He disputed Republican claims that because the loan didn’t close until Obama took office it “seems to give rise to political favoritism.”

 

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