In Wake of Solyndra Debacle, Committee Leaders Concerned with Obama Administration Rushing $9 Billion in Additional Loans by September 30
WASHINGTON, DC - Energy and Commerce Committee leaders today expressed concern to Energy Secretary Steven Chu as his agency prepares to dole out nearly $9 billion in stimulus loan guarantees that must be finalized by September 30, 2011. Of the $18 billion in loan guarantees made available by the stimulus, the Obama administration has closed just half since the stimulus was signed into law in February 2009. Given the failure of the program's flagship guarantee to Solyndra, Committee leaders are concerned that the Department of Energy appears to be rushing to award the remaining $9 billion in loan guarantees in the next ten days, resulting in risky investments for American taxpayers.
Full Committee Chairman Fred Upton (R-MI), Energy and Power Subcommittee Chairman Ed Whitfield (R-KY), and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) are seeking information on the financial condition of the 14 recipients DOE is poised to award the loans to, as well as additional details on the pending loan guarantees.
The Committee leaders write, "During the course of our investigation, the Committee has identified several documents which suggest that the timetable to issue the Solyndra loan guarantee was accelerated in order to meet stimulus deadlines, impacting the quality and comprehensiveness of DOE's and OMB's due diligence. For example, beginning in December 2008, a DOE employee began raising concerns about Solyndra's working capital. In August 2009, just before Solyndra's closing, that same employee again noted that the working capital issue remained unresolved, and that the "˜model runs out of cash in Sept. 2011 even in the base case without any stress.' The documents also suggest that OMB's review and approval of the Solyndra loan guarantee was rushed as well, and that OMB employees felt pressured to complete their review ahead of a September 4, 2009, groundbreaking event at Solyndra's manufacturing facility - an event that you attended and that featured an appearance via satellite by Vice President Biden. Now that Solyndra has declared bankruptcy, we cannot help but wonder whether additional time to review this guarantee might have prevented the taxpayers from being on the hook for the $535 million loaned to the company."
The Committee leaders continued, "With so much of DOE's Section 1705 Loan Guarantee portfolio not yet finalized, and the September 30, 2011, stimulus deadline to close these guarantees just days away, we are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready."
To view a copy of the letter, click HERE.
BACKGROUND: Solyndra was awarded the first stimulus DOE loan in the spring of 2009 and has been widely promoted as a stimulus jobs "success story" ever since, with President Obama visiting the plant in May 2010. Commencing in February 2011, the House Energy and Commerce Committee has been investigating the DOE's $535 million loan guarantee to Solyndra.
In the rush to finalize Solyndra's financing in time for a groundbreaking involving Vice President Joe Biden, emails uncovered by Energy and Commerce investigators reveal senior officials at the Office of Management and Budget were apparently prevented from finishing their work on the half-billion dollar Solyndra loan. Read the full Energy and Commerce memo detailing White House pressure to finalize the Solyndra loan guarantee HERE.
NOTE: Solyndra's executives are scheduled to testify before the Subcommittee on Oversight and Investigations at 9:00 a.m. this Friday, September 23, 2011, in room 2123 of the Rayburn House Office Building.