Does that prove the White House engaged in cronyism, shoveling cash toward a political ally? Not necessarily. Democrats have pointed out that Solyndra’s loan process was initiated by the Bush administration and that many key investors were Republicans. Still, there could have been other reasons the deal was hastened. As a former Clinton energy aide stressed to me, it was arguably a mistake to sell the loan guarantees as job-creating stimulus (the program was expanded as part of the 2009 stimulus bill). “It means you try to force huge amounts of money quickly through processes that aren’t quite ready yet,” the aide said. “It’d be better to have a calmer, steadier source of funding.”
2) Solyndra proves that energy-loan guarantees are a flop. Not exactly. The Energy Department’s loan-guarantee program, enacted in 2005 with bipartisan support, has backed nearly $38 billion in loans for 40 projects around the country. Solyndra represents just 1.3 percent of that portfolio — and, as yet, it’s the only loan that has soured. Other solar beneficiaries, such as SunPower and First Solar, are still going strong. Meanwhile, just a small fraction of loan guarantees go toward solar. The program’s biggest bet to date is an $8.33 billion loan guarantee for a nuclear plant down in Georgia. Improper political influence in the process is disturbing, but, at least so far, Solyndra appears an exception, not a rule. (That said, the GAO and others have pointed out potential pitfalls and the need for stricter oversight in the loan program.)
Solyndra LLC Chief Executive Officer Brian Harrison and Chief Financial Officer Bill Stover have postponed their previously scheduled congressional testimony until sometime next week. (Sept. 13)
A House committee opened an investigation into the loan on Wednesday, with both Democrats and Republicans asking tough questions of administration officials. As Carol Leonnig and Joe Stephens reported:
A House committee opened an investigative hearing Wednesday morning into a $535 million federal loan to a favored solar company by asking why the Obama administration sought to pour more taxpayer money into a company when the firm warned it was near collapse.
Republicans and Democrats on the House Energy and Commerce Committee questioned the reasoning of the administration’s decision earlier this year to help Solyndra restructure its debts and to release another $67 million to the troubled California-based company. Solyndra — once a centerpiece in President Obama’s initiative to develop clean-energy technologies — shuttered its plant two weeks ago, laying off 1,100 workers and leaving taxpayers on the hook for repaying the $535 million loan.
New records obtained by The Washington Post show that some federal reviewers warned internally earlier this year that it would be far cheaper for the government to allow Solyndra to shut down and sell off its assets, rather than to restructure the deal and bet on the company recovering. A preliminary estimate by the Office of Management and Budget in January showed that restructuring Solyndra could cost taxpayers up to $168 million more than liquidation.
At the hearing, Rep. Cliff Stearns (R-Fla.), chairman of the energy subcommittee on oversight and investigations, quoted from internal e-mails about those officials’ concerns and questioned two senior administration officials about why more public money was put on the line.
“I want to find out what happened to this money and who is responsible for putting these dollars at risk,” Stearns asked Jonathan Silver, head of the Energy Department’s loan guarantee program, and Jeffrey Zients of the Office of Management and Budget.
More from The Washington Post
A history of Solyndra
White House pressed on $500M loan
Opinion: Solyndra scandal spreads