Prominent Republican members of the House energy committee accused the Obama administration of "wasting" more than half a billion dollars in taxpayer money by making a federal loan guarantee to a "troubled" solar power company that collapsed in bankruptcy Wednesday.
"This is really bad news.... Half a billion dollars of taxpayer money and we may end up holding the bag," House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) told ABC News, raising serious concerns about the administration's energy loan program. "This is just a classic case of fraud and abuse and waste."
Solyndra, a California-based manufacturer of rooftop solar panels, opened in 2005 and in 2009 became the Obama administration's first recipient of an energy loan guarantee to the tune of $535 million meant to help minimize the risk to venture capital firms that were backing the solar start-up. Obama made a personal visit to the factory last year to herald its bright future.
ABC News and the Center for Public Integrity's iWatch News first reported on questions about the choice of Solyndra for the loan in May after the Department of Energy disclosed it was being forced to restructure its loan package for the company, which was showing early signs of financial distress. One of Solyndra's major investors was George Kaiser, an Oklahoma billionaire who raised between $50,000 and $100,000 for Obama during the 2008 election.
Following the ABC News and iWatch News reports, the House Energy and Commerce Committee opened their own investigation into the loan and into the Kaiser link, which Stearns office said in a statement "raised concerns that politics may have played a role in putting taxpayer dollars at risk making this loan guarantee."
"How was it they were the first ones?" Upton said. "We want to know who made this decision. What were some of the economic analysis that were apparently presented to try and convince the folks in the administration, the Department of Energy to do this? And we're not going to stop until we get those answers."
White House officials deferred ABC News' request for comment on this report to the Department of Energy. There, officials told ABC News and iWatch News that it used objective factors in selecting Solyndra. The department released a statement Wednesday on its website blaming changing economics in the industry -- including a major push by Chinese firms to drive down solar panel prices -- for the company's collapse along with two other domestic firms. According to the Energy Department, the price for solar products dropped 42 percent in 2011.
"The changing economics have affected a number of solar manufacturers in recent months, including unfortunately, Solyndra, a once very promising company that has increased its sales revenue by 2,000 percent in three years and sold more than 1,000 installations in 20 countries," the Energy web post states. "As a result, Solyndra now plans to suspend its manufacturing operations and file for bankruptcy protection."
The department also sought to emphasize that the Solyndra loan guarantee "was pursued by both the Bush and Obama Administrations." However, it was the efforts of Obama's energy team that first caught the attention of government auditors in 2010.