The House Committee on Energy and Commerce held a hearing Wednesday as part of an investigation into some questionable government loan guarantees provided to Solyndra, a solar energy firm that filed for bankruptcy last week.
The $535 million loan guarantee Solyndra received was the first issued by the Department of Energy (DOE) under Title XVII of the Energy Policy Act of 2005. Some feel that the decision to grant the loan was rushed and perhaps politically motivated: The mounting scandal prompted a Wall Street Journal reporter to describe Solyndra as a black eye for the Energy Department loan guarantee program.
E-mails obtained by The Washington Post and ABC News Wednesday support a theory that the loan was indeed accelerated. An official with the Office of Management and Budget, which was responsible for the final approval of the loan guarantee, referred in one email to the time pressure we are under to sign-off on Solyndra.
This deal is NOT ready for prime time, a White House official wrote in an email nine days before the loan guarantee was announced.
White House spokesman Eric Shultz denied any impropriety in issuing the loan guarantee, which was granted in time for Vice President Joe Biden to make the announcement at a groundbreaking ceremony in 2009.
There was interest in when a decision would be made because of its impact on whether an event involving the vice president could be scheduled for a particular date or not, but the loan guarantee decision was merit-based and made by career staffers at DOE, Schultz told the Washington Post.
A memo issued by the Committee on Energy and Commerce on Sept. 14 claims the DOE and OMB did not take adequate steps to protect taxpayer dollars.
Solyndra's funding and subsequent collapse is of particular interest to Republicans who believe the government backing could have been influenced by a political connection between President Obama and Tulsa billionaire George Kaiser, whose foundation is a Solyndra investor and who was an active fundraiser in Obama's presidential campaign. Kaiser reportedly made frequent trips to the White House near the time the loan guarantee was approved, but denies having any influence on the decision, according to the Washington Post.
Rep. Fred Upton, R.-Michigan, who is known to be a critic of the Obama adminstration's energy policies, has been vocal in his skepticism about Solyndra's loan guarantee. How did this company, without maybe the best economic plan, all of a sudden get to the head of the line? he said to ABC.
Shayle Kann, Managing Director of Solar at GTM Research, told IBTimes that while he could not make any determination about whether the loan was improperly accelerated, he believed Solyndra -- which manufactures photovoltaic solar panels -- was given the loan guarantee because the firm was the farthest along in the process among the companies seeking financial backing. Kann explained that the economic situation that contributed to firm's failure was not unique to Solyndra: The supply of solar panels went up while demand went down, and other solar energy companies were affected. (Evergreen Solar filed for bankruptcy in mid-August, and Spectrawatt filed a week later.)
Solyndra [was] not alone in not being able to keep up with the price decline, Kann said. Anybody who isn't cost-competitive is hurting. He pointed out that while the government may not have picked a winner, investors from the private sector made the same mistake -- with much more money.
Kann insisted that Solyndra's collapse does not indicate a failure of the loan guarantee program, which he says is providing a lot of value.
Taking Solyndra as a proof of a failed stimulus program is a big mistake, Kann said. Taking Solyndra as proof of a failed loan guarantee program is also a mistake.
Solyndra executives scheduled to testify at Wednesday's hearing postponed their testimonies until next week.