Head of Embattled Energy Loan Program Steps Down
Jonathan Silver leaves after Solyndra bankruptcy.
Oct. 6, 2011 — -- The head of the Energy Department's embattled loan program, Jonathan Silver, resigned Thursday after a tumultuous month during which the program's first loan recipient, the solar panel manufacturer Solyndra, declared bankruptcy, leading to a wave of scrutiny for his agency.
Energy Secretary Steven Chu confirmed in a statement emailed to ABC News that Silver had stepped down, but said his departure had long been expected.
"Under his leadership, the loan program has demonstrated considerable success, with a broad portfolio of investments that will help American companies compete in the global clean energy market," Chu said. "Because of my absolute confidence in Jonathan and the outstanding work he has done, I would welcome his continued service at the Department, but I completely understand the decision he has made."
Silver's departure came on the same day that President Obama was forced to defend his administration's decision to lend $535 million to Solyndra, a decision that came despite deep misgivings among professional budget analysts inside the government. His administration was facing intense scrutiny over the loan decision, both from Republicans in Congress, but also from inspectors general at two agencies, and from the Justice Department.
Last month, the California solar panel manufacturer filed for bankruptcy. Days later, the FBI raided its headquarters in what sources have said is a probe to determine whether the company misled officials in order to obtain federal support.
ABC News, working in partnership with the Center for Public Integrity, first reported on simmering questions about the loan program in March. Already, government auditors had begun questioning whether the Energy Department was giving favorable treatment to some applicants – including Solyndra. At the time, Silver strongly defended the loan to Solyndra, promising that the company would be delivering thousands of new American jobs.
Energy Department officials and the White House have maintained that politics never entered the equation when loans were being considered. But critics of the administration questioned whether there was political influence, noting that a top investor in Solyndra was also a major fundraiser during Obama's 2008 campaign.
Silver defended the program last month in an appearance before Congress, but deflected questions about the Solyndra loan, telling members he had arrived at the department after the loan had already gained approval.
"Support for innovative technologies comes with inherent risks," Silver testified.
But a House subcommittee investigating the Solyndra loan had deeper questions about Silver's decision to restructure the deal after the company was already showing significant signs of financial distress. At the time the Energy Department restructured the deal, the company had used $460 million in federal loan money to help build a new solar cell manufacturing plant. The company would receive another $67 million in taxpayer funds before shutting its doors on Aug. 31. And the new arrangement gave private investors the first crack at recouping funds after Solyndra filed for bankruptcy.
Silver testified that the restructuring was critical -- a step needed to give the faltering company a "fighting chance" to survive.
Republicans who are heading the Congressional probe -- Reps. Fred Upton (Mich.) and Cliff Stearns (Fla.) – released a statement Thursday saying they do not believe Silver's resignation will keep them from seeking more answers.
"Mr. Silver's resignation does not solve the problem," the congressmen said in a joint statement. "American taxpayers are already on the hook for the half billion dollar Solyndra bust - what other shoes does this Administration expect to drop?"
When Silver joined the Department in late 2009, he was touted for his venture capital experience -- a critical need for a department that had been tasked with handing out billions of dollars to start-up companies in the alternative energy space. Energy Department officials said that during his tenure, the loan programs he oversaw were supporting 38 projects that include the world's largest wind farm and several of the nation's largest photovoltaic solar generation facilities.
Energy officials said Silver is leaving to become a Distinguished Visiting Fellow at Third Way, a Washington think tank.
