On Eve of Solyndra Hearing, Oversight and Investigations Subcommittee Demands Cooperation from OMB Head

June 23, 2011
WASHINGTON, DC - House Energy and Commerce Subcommittee on Oversight and Investigations Chairman Cliff Stearns (R-FL) is demanding answers and cooperation from Office of Management and Budget Director Jacob Lew regarding an ongoing investigation of a stimulus loan guarantee awarded to Solyndra, Inc. Stearns' request comes on the eve of a Subcommittee hearing on "OMB's Role in the DOE Loan Guarantee Process," scheduled for Friday, June 24, 2011, at 9:30 a.m. in room 2123 of the Rayburn House Office Building. Deputy Director Jeffrey Zients is slated to testify, although OMB will not commit to his appearance.
 
In the letter to OMB Director Lew, Stearns writes, "In order to accommodate your staff's concerns, I myself came to an agreement with Deputy Director Jeffrey Zients to have a briefing and an in camera review of communications responsive to the Committee's request.  I was astonished when OMB subsequently violated our agreement and refused to bring the agreed upon documents to the briefing.  At that meeting, your staff told Committee staff that, in OMB's opinion, it was not necessary for this Committee to see the requested documents.  This is unacceptable. OMB's opinion that this Committee does not need to see certain documents is not a proper basis for withholding these documents, and betrays a fundamental misunderstanding of the Constitutional roles of Congress and the Executive Branch."
 
Committee leaders are investigating DOE's use of stimulus funds, particularly the department's highly publicized $535 million stimulus loan guarantee awarded to Solyndra of Fremont, California. OMB is responsible for reviewing and approving the Credit Subsidy Costs of all DOE loan guarantees. Dating back to a March request, the Committee leaders have pressed the Office of Management and Budget for key documents and information concerning the review of the Solyndra loan guarantee, but OMB has refused to produce all of the documents. 
 
BACKGROUND
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 repeated problems with cash flow. The firm has closed one of its factories, laid off workers, and postponed the expansion of the plant that had received the loan guarantee, resulting in the cancellation of a planned hiring spree that had been touted to include as many as 1,000 additional workers. The week of March 7, DOE modified Solyndra's loan guarantee and Solyndra announced a new $75 million loan from its existing investors in an effort to save the company by restructuring its outstanding debts and reducing costs. 
 
The full text of the letter is provided below and a signed copy can be found HERE.
 
June 23, 2011
 
Mr. Jacob Lew
Director
The Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
 
Dear Mr. Lew,
 
I am writing to you regarding the Office of Management and Budget's (OMB) response to a letter from the Committee on Energy and Commerce (Committee) dated March 14, 2011.  This letter requested documents and a briefing from OMB relating to its role in the approval of a $535 million Department of Energy (DOE) loan guarantee to Solyndra, Inc., a California company.
 
In the three months since this letter was sent, this Committee has worked extensively with OMB staff to obtain production of the requested documents.  Committee staff has repeatedly attempted to accommodate OMB's concerns regarding these documents.  In order to accommodate your staff's concerns, I myself came to an agreement with Deputy Director Jeffrey Zients to have a briefing and an in camera review of communications responsive to the Committee's request.  I was astonished when OMB subsequently violated our agreement and refused to bring the agreed upon documents to the briefing.  At that meeting, your staff told Committee staff that, in OMB's opinion, it was not necessary for this Committee to see the requested documents.  This is unacceptable.
 
Congress has a right to this information.  This Committee has jurisdiction over the DOE Loan Guarantee Program.  It is conducting an investigation pursuant to Rules X and XI of the U.S. House of Representatives.  We have a direct interest in understanding how OMB and DOE carried out their roles with respect to approving over $11 billion in financing, and whether they properly weighed the risks presented by these guarantees, and the Solyndra guarantee in particular. OMB's opinion that this Committee does not need to see certain documents is not a proper basis for withholding these documents, and betrays a fundamental misunderstanding of the Constitutional roles of Congress and the Executive Branch.
 
I expect OMB to produce the documents requested in the March 14 letter.  I expect Deputy Director Zients to appear before this Committee tomorrow and answer the questions of this Committee fully and without qualification regarding OMB's actions during the Solyndra loan review.  It is time for OMB to stop stonewalling and allow this investigation to proceed.
 
Sincerely, 
 
Cliff Stearns 
Chairman, Subcommittee on Oversight and Investigations