House Probing $528M Loan to Failed Solar Company
Leaders of a House subcommittee want to make the Obama administration answer for putting taxpayers on the hook for a half-billion-dollar loan to a now-bankrupt solar panel manufacturer.
A hearing Wednesday will examine what went wrong with Solyndra Inc., which received a federal loan of nearly $528 million and recently filed for bankruptcy. GOP leaders of the subcommittee describe the loan as a "half-billion bust" that raises red flags about the administration's efforts to generate more jobs in the renewable energy sector.
"It is not the role of government to pick winners and losers in the market," said Republican Reps. Fred Upton of Michigan and Cliff Stearns of Florida, in a joint statement. Upton is chairman of the House Energy and Commerce Committee, while Stearns oversees the committee's investigations and oversight panel.
The subcommittee has been investigating Solyndra for nearly six months. They've questioned whether the Energy Department and the White House conducted a proper review of Solyndra's application for a loan guarantee. They've also asserted that politics may have played a role in approving the loan guarantee by pointing out that investors in Solyndra had helped raise money for President Barack Obama's 2008 campaign.
The panel plans to hear on Wednesday from officials with the Energy Department and the White House Office of Management and Budget, which played the central roles in approving the loan guarantee. The guarantee essentially works as an insurance policy that covers a company's debt obligation in the event of default. In many cases, the loans come from private banks, but in Solyndra's case, the financing came from the federal government itself.
Administration officials have noted that a loan guarantee for Solyndra was also sought by the Bush administration and that private investors put more than $1 billion into the company.
Two executives with Solyndra Inc. were also asked to testify Wednesday but are now expected to appear voluntarily next week instead. They are Brian Harrison, the company's president and chief executive officer, and W.G. Stover Jr., a senior vice president and chief financial officer.
A Solyndra spokesman, David Miller, said numerous factors played a role in the delay, including "legal complexities arising from last week's activities and the urgency of bankruptcy proceedings."
"It is in the best interest of all interested parties for them to remain in California to engage with potential purchasers," Miller said.
A news release from the Energy and Commerce Committee said lawmakers have been assured of the pair's appearance next week. Miller said the company was in contact with committee staff and was working with them on a future date.
The $862 stimulus bill that Congress passed in early 2009 included money for the loan guarantee program. GOP lawmakers are also using the company's collapse to attack economic stimulus legislation in general.
Lawmakers say Solyndra misrepresented the company's viability when company officials visited Capitol Hill in July. While company officials painted a picture of improving finances, the company was preparing to restate financial statements projecting reduced revenues, according to staff with the Energy Department's loans program.
Solyndra was heralded as one of the nation's bright spots of green technology innovation, creating a solar tube of sorts that could soak up sunlight from many angles, producing energy more efficiently and using less space. The company's panels were also light and easy to install, which was meant to save upfront costs.
But over the past few years, other companies caught up and provided similar products at a lower cost.