Republican lawmakers are stepping up their investigation into alternative energy loan programs in the wake of the collapse of the Solyndra solar company, the first company to receive such government funding.
Days before Department of Energy deadlines to finalize $8.9 billion in loans for 14 pending renewable energy projects, Congressional investigators asked for detailed financial information on the deals and the government's due diligence.
We are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready, said Fred Upton, Cliff Stearns and Ed Whitfield of the House Energy and Commerce committee, in a letter to Energy Secretary Steven Chu on Tuesday.
The lawmakers have been probing whether politics influenced government loans to Solyndra. They had expected company executives to answer questions at a hearing on Friday.
But lawyers for Solyndra executives said their clients would not answer lawmakers' questions, invoking their rights to avoid self-incrimination under the Fifth Amendment of the U.S. Constitution.
Upton and Stearns said they will still ask the executives why they misled our members about the financial state of their company during a mid-July lobbying trip, and about their dealings with the Obama administration.
Investigators asked for detailed financial information from the Energy Department on its pending clean energy loans as well as its existing portfolio of 18 guarantees worth $9.4 billion.
A spokesman for the Energy Department said every deal closed by September 30 will be fully vetted and has had months of extensive review.
We are not rushing to complete deals, we are using the full amount of time Congress allocated for the program so we can ensure that we fully complete all due diligence and make informed decisions based on the most recent data, DOE spokesman Damien LaVera said.
ENOUGH DUE DILIGENCE?
The loan guarantee program was created in a 2005 energy law, and its funding was supplemented by the federal economic stimulus package.
The Energy Department has closed on a total of 18 guarantees, but had made conditional commitments for 14 other loans for solar, wind, biofuel and geothermal projects around the country.
We question whether the DOE needs additional time to conduct its due diligence to ensure taxpayer dollars are not being put at risk unnecessarily, the lawmakers said.
Three of the conditional offers were to First Solar for large solar power plants in California. The company has contracts to sell the power from the plants to utilities in California and has said those sales would cover its debt repayments.
First Solar shares slipped to a four-year low of $78.68 per share after the news and closed at $79.21, down 5.6 percent.
The process for vetting and awarding the loan guarantees has been cumbersome and the new Congressional request will likely delay loans further, said Theodore O'Neill, a solar industry analyst with Wunderlich Securities.
The big companies will look for financing somewhere else, and the smaller companies are going to struggle, O'Neill said.
SOLYNDRA EXECUTIVES WON'T TESTIFY
Solyndra was the first company to receive loan guarantee funding, securing $535 million in guarantees in 2009. The company filed for bankruptcy last month, and is the focus of investigations by the FBI and by Republicans in Congress.
Solyndra Chief Executive Brian Harrison and Chief Financial Officer W.G. Stover had agreed to testify to Congress about the loans, but on Tuesday, their lawyers said they would not answer questions, according to letters obtained by Reuters.
The company said it was cooperating with the Justice Department and did not break any rules. In a statement, it blamed low prices and a glut of solar panels for its woes, and said a failure of the DOE to agree to a new financing arrangement led to its bankruptcy.
As late as August, the company believed that existing investors and the DOE would come to a financing arrangement that would have secured the capital the company needed, Solyndra said.
The Solyndra loan had been hailed by President Barack Obama and other top administration officials as a model of how the government could kick-start job growth in clean energy.
The company and Energy Department have blamed heavily subsidized competition from China for the company's woes.
But Republicans have uncovered e-mails showing concerns about the company's finances dating back before the loans were made. Other e-mails suggested decisions may have been rushed to accommodate the schedules of Obama administration officials who wanted to promote them.