The Energy Department, under fire over its management of a program that offers loan guarantees to clean-technology companies, has been finalizing additional multimillion-dollar loan guarantees in the program at a rate of more than one a week since the beginning of August. It now has just two weeks left to commit the program’s remaining $9.3 billion.
The push to finalize deals for the lucrative federal financing before the program expires at the end of the fiscal year is drawing fire from Republicans and government watchdogs. They say haste led to costly mistakes in the decision to back Solyndra, a solar-panel maker that collapsed two weeks ago, leaving taxpayers liable for a half-billion-dollar federal loan.
“Rather than churn out billions more in loan guarantees to make a deadline, the administration has to move deliberately and cautiously on behalf of taxpayers,” said Ryan Alexander, president of the nonpartisan government watchdog group Taxpayers for Common Sense. “Solyndra has demonstrated there is no such thing as a free lunch. And loan guarantees can come at a pretty price to taxpayers.”
Since the start of August, the Department of Energy has closed seven loan guarantees, at a rate of more than one a week — after approving just 11 in the previous 26 months of the program.
Congressional Republicans are raising similar concerns, among them Rep. Cliff Stearns (R-Fla.), who heads a subcommittee that has been investigating the program for months.
“We are just days from the program expiring, yet nearly half of the guarantees, just under $10 billion, have yet to be awarded,” Stearns said in a statement. “The last thing we can afford from the Obama administration are more of the same sloppy, poor investments in the final rush to get the cash out the door.”
Energy Department officials said they have been reviewing projects intensely for months, and are not rushing their judgments.
“We are committed to ensuring that every deal closed before September 30th is fully vetted, and will not close any deal that has not received full due diligence,” said Energy Department spokesman Damien LaVera. “We are using the full amount of time Congress allocated for the program so we can . . . make informed decisions based on the most recent data.”
The federal stimulus act provided about $18 billion for loan guarantees to help jump-start clean energy projects that could create jobs and lessen U.S. reliance on imported oil. The guarantees make it easier for businesses to secure loans because lenders know that if the company defaults, taxpayers will assume the debt.
Under the law, the loans have to close and companies have to start construction before Sept. 30.
President Obama made the program a high-profile priority, traveling the country to visit clean-tech factories and drum up public enthusiasm. As of Friday, the department had closed 18 deals in the stimulus-funded portion of the program, worth $9.5 billion in loan guarantees. It had made conditional commitments for 14 projects, worth $9.3 billion in guarantees — if they win final approval by the end of the month.
Leaders on Capitol Hill say they want to avoid another failure like Solyndra’s, which some critics have begun to cite as justification for opposing other Obama programs.
The Silicon Valley solar panel maker was a centerpiece of Obama’s initiative to develop clean energy technologies, and received the program’s first loan guarantee, for $535 million. Solyndra reported accelerating sales until Aug. 31, when it collapsed without warning and filed for bankruptcy protection, leaving 1,100 people out of work and taxpayers on the hook for the loans. Last week, FBI agents raided Solyndra’s offices and seized files and computer records.
In an interview Thursday with the Fox Business Network, Stearns called for the Energy Department to fire its top loan official, Jonathan Silver. The previous day, Silver had testified before Stearns’s subcommittee, saying the department did nothing unethical in approving the loan guarantee for Solyndra, which is owned in large part by funds linked to Obama fundraiser George Kaiser.