ICYMI: Working to Ensure There Will Be No More Solyndras
Working to Ensure There Will Be No More Solyndras
By Reps. Michael C. Burgess (R-TX) and Fred Upton (R-MI)
The Hill's Congress Blog
July 31, 2012
With millions out of work and rising prices on basic living expenses, American families are struggling across this country just to make ends meet. They have sent their representatives to Washington to ensure that their voices are heard, and that their tax dollars are used wisely. When this doesn’t happen, Congress must hold the proper people accountable, and do everything in our power to ensure that the waste stops and never happens again. The Obama administration’s decision to give a $535 million loan guarantee to Solyndra, when the writing was on the wall about the company’s troubled financial condition, is just the kind of waste that shouldn’t happen – and that Congress should take every step to prevent.
In the waning days of the Bush Administration, the Department of Energy Credit Committee reviewing Solyndra’s loan guarantee found the application insufficient and decided not to engage in further discussions with the solar company. Just over two weeks later, days after President Obama took office, Solyndra’s loan guarantee was on the fast track for approval. Every step of the way, warnings were raised by experts both inside and outside the Obama administration, but every red flag was ignored. One expert at the Office of Management and Budget bluntly stated that Solyndra was “not ready for prime time.” As the loan guarantee was being finalized in late 2009, a DOE expert prophetically warned, “the model runs out of cash in September 2011… how can we advance a project that hasn’t funded working capital requirements…”
Despite all of its troubles, Solyndra was a darling of the Obama administration right up until its bankruptcy last September, widely promoted as a stimulus success story. Even as Solyndra was encountering financial problems in May of 2010, President Obama traveled to the plant in Fremont, California, proudly declaring, “It’s here that companies like Solyndra are leading the way toward a brighter and more prosperous future.”
During Solyndra’s rapid decline, DOE made every effort to save the company no matter what the cost to American taxpayers. They went so far as restructuring their loan guarantee in February 2011, putting Solyndra’s investors ahead of taxpayers, which violated the plain letter of the law. As Solyndra’s finances deteriorated, the Obama administration was even considering a second $469 million loan guarantee for the company. Solyndra eventually went bankrupt, was raided by the FBI, and left taxpayers on the hook for half a billion dollars.
The Energy and Commerce Committee has relentlessly pursued information on what happened leading up to the Obama administration granting approval for Solyndra. The committee has issued subpoenas, held hearings, and requested documents that pertain to how Solyndra was selected to receive funding and how DOE restructured their loan. While nearly all of the $535 million was given to Solyndra, we were able to rescind $100 million in funding from DOE’s loan guarantee program to prevent other Solyndras from occurring.
Sadly, Solyndra isn’t the only company that received loan guarantees from the Department of Energy and then fell into trouble. The failures are starting to pile up - first Solyndra, then Beacon Power, followed by Abound Solar which filed for bankruptcy earlier this month, and now media reports indicate Nevada Geothermal is running out of cash.
Uncle Sam should not be in the business of funding risky projects. Congress has a responsibility to ensure that there will be no more Solyndras. That is why the Energy and Commerce Committee is working on the “No More Solyndras Act” to bring an end to the ill-fated loan guarantee program. While this is an important step, there is still more that we can do.
We must impose penalties on any executive branch official who violates the terms of the loan guarantee as set forth in the legislation that was signed into law in 2005. The concept is simple: when a federal employee breaks the law, and loses taxpayer dollars, he or she should be held accountable. Included in the No More Solyndras Act is an amendment that will impose administrative penalties for such violations. The goal is not just to end the program, but to hold those who are responsible for spending taxpayer dollars accountable.
While President Obama and his administration refuse to apologize for their failed investment in Solyndra, and have even worked to block the committee’s investigation, the Energy and Commerce Committee has continuously searched for answers and has pushed for legislation that will aggressively ensure that taxpayer dollars will never again be used to fund these types of projects. It is not the place of the government to pick winners and losers in the business sector; rather, the market should. In this time of economic uncertainty, we should be careful stewards of the taxpayers’ hard earned dollars.
Burgess is a member of the House Energy and Commerce Committee. Upton is the chairman of the committee.
Read the article online here.