Energy & Commerce Leaders Probe OMB for Role in DOE Stimulus Loan Guarantees, Risky Half Billion Dollar Award to Solyndra a Top Concern
WASHINGTON, DC - Leaders of the House Energy and Commerce Committee are expanding their investigation into the Department of Energy's (DOE) use of stimulus funds, broadening their examination of the department's $535 million stimulus loan guarantee awarded to Solyndra, Inc. of Fremont, California. Chairman Fred Upton (R-MI), Energy and Power Subcommittee Chairman Ed Whitfield (R-KY), and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) today sent a letter to the Office of Management and Budget (OMB) requesting key documents and information concerning the review of the Solyndra loan guarantee. OMB is responsible for reviewing and approving the Credit Subsidy Costs of all DOE loan guarantees. Today's letter follows a February 17, 2011, letter to Energy Secretary Steven Chu requesting documents and related information on the Solyndra loan guarantee.
In the letter, the leaders expressed concern with DOE's recent modification of Solyndra's loan guarantee, writing, "Since the loan guarantee was closed in September 2009, Solyndra has suffered a number of financial setbacks, including the cancellation of a planned public offering in June 2010 and problems with cash flow. The week of March 7, DOE modified Solyndra's loan guarantee and Solyndra announced a new $75 million loan from its existing investors to restructure its outstanding debts and reduce costs."
The highly publicized Solyndra loan guarantee was to finance construction of a new manufacturing facility for solar panels that was expected to create thousands of jobs. Since the March 2009 announcement, the firm has proceeded to close one of its factories, lay off workers, and postpone the expansion of the very plant that had received the loan guarantee, cancelling the hiring of an additional 1,000 workers.
The leaders also pointed to the concerns raised by some of the President's top advisors on DOE's implementation of the loan guarantee program and OMB's role in the review process, writing, "As part of an interagency review process, OMB is responsible for reviewing and approving the Credit Subsidy Costs of the DOE loan guarantees. The implementation of the DOE loan guarantee program, and OMB's role in it, were the subjects of an October 25, 2010, Briefing Memorandum addressed to President Obama from Carol Browner, then-Director of the White House Office of Energy and Climate Change Policy; Ron Klain, then-Chief of Staff to Vice President Biden; and Lawrence Summers, then-Director of the National Economic Council. That memorandum notes that the loan guarantee program had been subjected to criticism for its "˜slow implementation' and "˜making commitments to projects that would have happened anyway and thus fail to advance [the President's] clean energy agenda.'"
Click HERE to see the letter from Upton, Whitfield and Stearns to OMB Director Jacob Lew.
Click HERE to see the February 17, 2011, letter to Energy Secretary Steven Chu.