“These adjustments may require approval of the Department of Justice,” Burner wrote in a Feb. 10 e-mail. “Let me know if you need the name of a contact at DOJ.”
Despite the warning, the deal went forward without Justice Department involvement. Solyndra, a California-based solar panel maker, collapsed in August, and taxpayers are liable for a $535 million federal loan to the company.
Burner’s e-mail was released in connection with a hearing Friday before an investigative panel of the the House Energy and Commerce Committee. The hearing examined circumstances surrounding a similar e-mail released last week that also raised questions about the refinancing.
In that e-mail, Assistant Treasury Secretary Mary Miller wrote to the deputy director of the White House’s Office of Management and Budget, saying that she had warned officials before the deal was completed that it might be illegal. She also urged officials to get prior Justice Department approval.
“To our knowledge that never happened,” Miller wrote in the Aug. 17, 2011, message to the OMB.
Energy Department spokesman Damien LaVera said Friday that career officials conducted a “careful analysis” of the restructuring terms and concluded they were lawful. Changes to the loan did not involve “compromising the claim,” and so Justice approval was not required, he said.
Energy Department lawyers argued in a February memo, also released Friday, that although federal law bars the government from making taxpayer interests subordinate to those of private investors, that restriction does not apply in a restructuring. That is particularly true in Solyndra’s situation, the memo said, because the restructuring was intended to save a failing company and protect taxpayers’ investment.
Energy Secretary Steven Chu approved the new terms in February, allowing private investors to pump $75 million more into the ailing California company.
At Friday’s hearing, Burner testified that he neither intended to suggest consultation with the Justice Department was required nor concluded the deal would be illegal. Under questioning, he said he continued to believe “it would have been wise for them to seek Department of Justice approval.”
Committee Republicans cited the e-mails as evidence the Obama administration ignored clear warnings from its own staff that the deal was illegal. They claim the administration was rushing to save a company it had repeatedly highlighted as a stimulus program success story.