Ad­min­is­tra­tion grilled on Solyn­dra loan

The Washington Times Weekly - - Politics - BY JIM MCELHATTON

Obama ad­min­is­tra­tion of­fi­cials re­fused to say on Sept. 14 whether any­body would be fired over the de­ci­sion to award so­larpanel man­u­fac­turer Solyn­dra LLC a half-bil­lion dol­lars in loans be­fore it went bank­rupt and saw its head­quar­ters raided by the FBI.

Dur­ing a hear­ing in which two top ad­min­is­tra­tion of­fi­cials de­fended the $535 mil­lion loan deal to Solyn­dra in 2009, Repub­li­cans on the House En­ergy and Com­merce Com­mit­tee ques­tioned whether Amer­i­cans could ex­pect any govern­ment of­fi­cials to be fired. The FBI raided the com­pany af­ter it filed for bank­ruptcy two weeks ago.

The com­mit­tee also raised ques­tions about whether the loan deal came about be­cause of po­lit­i­cal in­flu­ence, high­light­ing an email that they said showed how the White House was try­ing to hurry a loan ap­proval so Vice Pres­i­dent Joseph R. Bi­den could an­nounce the deal in 2009.

The largest pri­vate in­vestor in Solyn­dra is a ven­ture-cap­i­tal firm tied to Ok­la­homa bil­lion­aire Ge­orge Kaiser, a fundraiser for Barack Obama’s 2008 pres­i­den­tial cam­paign.

Rep. Henry A. Wax­man of Cal­i­for­nia, the com­mit­tee’s rank­ing Demo­crat, also noted dur­ing the hear­ing that the com­pany’s in­vestors in­cluded Madrone Cap­i­tal Part­ners, which has ties to Wal-Mart’s Wal­ton fam­ily, which has of­ten backed Repub­li­cans.

Much of the tough­est ques­tion­ing by the com­mit­tee was di­rected at Jonathan Sil­ver, head of the Depart­ment of En­ergy’s loan pro­gram, which ap­proved the loan.

Rep. Tim Mur­phy, Penn­syl­va­nia Repub­li­can, ac­cused Mr. Sil­ver of throw­ing his sub­or­di­nates “un­der the bus.”

“What do you do for a liv­ing?” an an­gry Mr. Mur­phy asked.

“We work to the fullest of our ca­pa­bil­i­ties, con­gress­man,” Mr. Sil­ver replied.

Rep. Cliff Stearns, Florida Repub­li­can and chair­man of the House En­ergy and Com­merce in­ves­ti­ga­tions sub­com­mit­tee, pressed Mr. Sil­ver on whether any­body should be fired.

“I’m say­ing we are do­ing the best job we know how to do,” Mr. Sil­ver said, de­clin­ing to an­swer the ques­tion.

The other top of­fi­cial who tes­ti­fied at the hear­ing, Jef­frey Zients, deputy di­rec­tor of the Of­fice of Man­age­ment and Bud­get, told the com­mit­tee that nei­ther he nor his staff met or talked with Mr. Kaiser.

White House records show that in March 2009, Mr. Kaiser met with Ja­son Fur­man, who was then deputy di­rec­tor of the White House’s National Eco­nomic Coun­cil.

The hear­ing came amid re­ports that the Trea­sury Depart­ment’s of­fice of in­spec­tor gen­eral also is in­ves­ti­gat­ing the loan deal.

Solyn­dra be­came the first com­pany to get a Depart­ment of En­ergy loan guar­an­tee through the stim­u­lus pro­gram, and it was hailed as an ex­am­ple of job cre­ation and clean-en­ergy tech­nol­ogy by the White House.

Both Mr. Zients and Mr. Sil­ver said they didn’t know why Solyn­dra was raided by the FBI.

Pres­i­dent Obama toured the com­pany last year, say­ing Solyn­dra ex­pected to hire 1,000 work­ers and make enough so­lar panels over the life­time of the plant it was build­ing that it would be like re­plac­ing eight coal-fired power plants.

Mr. Bi­den, along with En­ergy Sec­re­tary Steven Chu, an­nounced the award of fed­eral loans to the com­pany in 2009.

Mr. Bi­den said the an­nounce­ment was part of an “un­prece­dented in­vest­ment this ad­min­is­tra­tion is mak­ing in re­new­able en­ergy and ex­actly what the Re­cov­ery Act is all about.”

Solyn­dra ex­ec­u­tives did not ap­pear at the hear­ing, though they were ex­pected to at­tend.

“Given the tim­ing of the hear­ing, le­gal com­plex­i­ties aris­ing from last week’s ac­tiv­i­ties and the ur­gency of bank­ruptcy pro­ceed­ings, [Solyn­dra ex­ec­u­tives] will not be able to ap­pear,” Solyn­dra spokesman Dave Miller said, adding that talks were on­go­ing about a date for them to vol­un­tar­ily tes­tify.

Mr. Miller said the com­pany’s top two ex­ec­u­tives, Chief Ex­ec­u­tive Of­fi­cer Brian Har­ri­son and Chief Fi­nan­cial Of­fi­cer Bill Stover, were work­ing in Cal­i­for­nia to “en­gage in po­ten­tial pur- chasers.”

The ques­tion of whether mar­ket con­di­tions or the Obama ad­min­is­tra­tion was more to blame for tax­pay­ers po­ten­tially los­ing a half-bil­lion dol­lars in loans to the com­pany fell mostly along po­lit­i­cal lines dur­ing the hear­ing.

Mr. Stearns said the rush to spend stim­u­lus money im­pacted the qual­ity of over­sight by the Of­fice and Man­age­ment and Bud­get and the Depart­ment of En­ergy.

One of the doc­u­ments re­viewed dur­ing the months-long Repub­li­can in­ves­ti­ga­tion cited by Mr. Stearns show the White House had sched­uled a 2009 ground­break­ing cer­e­mony with Mr. Bi­den and Mr. Chu be­fore the loan deal was fi­nal­ized, he said.

Mr. Stearns also cited an email to the vice pres­i­dent’s of­fice from a se­nior OMB of­fi­cial un­cov­ered by con­gres­sional in­ves­ti­ga­tors.

The OMB of­fi­cial wrote, “We have ended up with a sit­u­a­tion of hav­ing to do rushed ap­provals on a cou­ple of oc­ca­sions. . . . [W]e would pre­fer to have suf­fi­cient time to do our due dili­gence re­views and have the ap­proval set the date for the an­nounce­ment, rather than the other way around.”

In an­other email in late Au­gust 2009, a spe­cial as­sis­tant to White House Chief of Staff Rahm Emanuel con­tacted se­nior OMB staff ask­ing whether “there is any­thing we can help speed along on OMB side.”

At the time, the White House was talk­ing of sched­ul­ing an an­nounce­ment high­light­ing the loan deal, but OMB had not fi­nal­ized its re­view.

An­other OMB staff mem­ber, who re­ceived a for­warded copy of the email, re­sponded, “I would pre­fer this an­nounce­ment be post­poned. . . . This is the first loan guar­an­tee, and we should have full re­view with all hands on deck to make sure we get it right.”

In the end, OMB com­pleted its re­view and the ground­break­ing event at Solyn­dra went ahead as sched­uled.

But in a re­port re­leased by Repub­li­cans on the House En­ergy and Com­merce Com­mit­tee, of­fi­cials said doc­u­ments show that OMB staff work­ing on the loan ap­proval felt pres­sure from the White House to fin­ish their work in time for the ground­break­ing, which also was at­tended by Mr. Chu and Arnold Sch­warzeneg­ger, a Repub­li­can who was Cal­i­for­nia’s gov­er­nor at the time. Mr. Bi­den ap­peared via a satel­lite feed.

“And out there at Solyn­dra, you guys have fig­ured it out,” Mr. Bi­den said. “You fig­ured out how to har­ness the sun’s power for a bet­ter, more ef­fi­cient, more pros­per­ous fu­ture for all of Amer­ica, and you’re cre­at­ing more jobs.”

In his re­marks, Mr. Sch­warzeneg­ger said the project would cre­ate thou­sands of jobs, and he ap­plauded the Obama ad­min­is­tra­tion.

“So let’s give a big hand to Pres­i­dent Obama and the Obama ad­min­is­tra­tion for this great job,” Mr. Sch­warzeneg­ger said.

Af­ter the com­pany’s bank­ruptcy two years later, ad­min­is­tra­tion of­fi­cials de­fended the de­ci­sion to award Solyn­dra the loans in 2009, say­ing the com­pany fell vic­tim to un­fore­seen dif­fi­cul­ties in the so­lar in­dus­try and that its fi­nances were scru­ti­nized by govern­ment of­fi­cials be­fore award­ing the loans.

Mr. Sil­ver said China be­gan flood­ing the mar­ket with cheaper so­lar panels be­cause the Chi­nese govern­ment was pro­vid­ing mas­sive sub­si­dies to so­lar man­u­fac­tur­ers and that in turn “drove the price curve down in a very sig­nif­i­cant fash­ion.”

Repub­li­cans also ripped the de­ci­sion to al­low a loan re­struc­tur­ing, in which new in­vestors who poured $75 mil­lion into Solyn­dra would be paid back be­fore tax­pay­ers in case of a de­fault.

Mr. Wax­man said the loan deal de­serves scrutiny, and he raised ques­tions about whether there was proper vet­ting and whether the com­pany mis­led fed­eral of­fi­cials about its fi­nances.

He said the com­pany even briefed him per­son­ally on its fi­nances and as­sured him it was in solid shape. Still, he said, the com­pany’s col­lapse shouldn’t keep the govern­ment from back­ing so­lar-en­ergy ini­tia­tives.

But Rep. Mike Pom­peo, Kansas Repub­li­can, said the col­lapse wasn’t sur­pris­ing.

He said that’s what hap­pens when the govern­ment tries to pick win­ners and losers.


Jonathan Sil­ver, head of the En­ergy Depart­ment pro­gram that ap­proved the $535 mil­lion deal for Solyn­dra in 2009, faced some of the tough­est ques­tion­ing on Sept. 14 by a House in­ves­ti­ga­tions sub­com­mit­tee.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.