WASHINGTON -- The Republican lawmaker leading the charge against an Obama administration loan guarantee program for clean-energy companies wasn't always so skeptical of government attempts to boost the green economy.
Rep. Fred Upton, R-Mich., the chairman of House Energy and Commerce Committee, previously lobbied the Department of Energy to lend money for at least four energy projects in his home state through the same loan program. But after last month's bankruptcy of the solar panel manufacturer Solyndra — the first company to win a DOE clean-energy loan funded through Obama's $825 billion stimulus plan — Upton was among the Republican lawmakers who decried the Department of Energy loan guarantee program for "picking winners and losers."
Now, Upton is suggesting that the DOE program — which has about $7 billion in conditional loan commitments to green firms that are due to be finalized by the end of this week — may amount to "risky investments for American taxpayers." Upton and Rep. Cliff Stearns, R-Fla., wrote to Energy Secretary Steven Chu last week and urged him not to rush to finalize several loans that are required by statute to be closed by Friday.
House Energy subcommittee staff are scheduled to meet today with Energy Department officials to discuss the outstanding loans.
"In this time of record debt, I question whether the government is qualified to act as a venture capitalist, picking winners and losers in speculative ventures and shelling out billions of taxpayer dollars to keep them afloat," Upton said at a hearing earlier this month.
In the aftermath of Solyndra's collapse, Upton and other Republicans have noted that a foundation tied to an Obama fundraiser was a major investor in the Fremont, Calif.-based company and questioned whether politics played a role in Solyndra winning the loan guarantee. As the result of an ongoing Energy subcommittee investigation, the White House was forced to release a series of e-mails that suggested administration officials were eager to see the deal finalized, so Vice President Biden could attend a 2009 groundbreaking ceremony for Solyndra.
But in the past, Upton, like many of his Republican colleagues, voted in favor of energy policy laws that created the loan guarantee program and lobbied the Energy Department to back loans for firms in their state.
Backed loan guarantees
In 2005, when Republicans controlled Congress and the White House, Upton voted for an energy law that included a loan guarantee program to help support companies looking to develop renewable energy projects as well as nuclear and coal. And in 2007, Upton backed legislation that created the Advanced Technology Vehicle Manufacturing (ATVM) Loan Program, targeting manufacturers and suppliers looking to retool U.S. factories to build high-fuel economy vehicles.
The ATVM Loan Program has proved to be a boon for Michigan. In July, a Michigan steel manufacturer, Severstal Dearborn, won a $730 million loan guarantee from the Energy Department. One year earlier, Upton was among Michigan lawmakers who wrote to Chu calling for "prompt completion and consideration of loan applications" from Michigan companies.
"For America's auto industry to continue its global leadership into the 21st Century, we must foster the American manufacture of fuel-efficient vehicles for the mass market," according to the July 1, 2010, letter that Upton co-signed.
Upton also was among four GOP lawmakers from Michigan who wrote to Chu on Oct. 30, 2010, urging him to back a $207 million ATVM loan guarantee for EcoMotors International, which was looking to develop a manufacturing site in Livonia, Mich. . The application wasn't approved.
Upton praised Chu
Upton voted against the 2009 stimulus bill that created a third stream of guarantees, known as 1705 loans, for solar energy outfits such as Solyndra and other higher-risk renewable energy companies that face difficulty finding financing from private lenders.
But his opposition to the stimulus bill didn't stop him from seeking financing for Michigan companies seeking the 1705 loan guarantees.
Upton was among a bipartisan group of Michigan lawmakers who praised Chu for "efforts to promote the development of clean energy in Michigan and across the country," according to a December 2009 letter to the Energy Department that was co-signed by Upton.
That letter was written to bolster the application of four clean-energy companies — Suniva, Inc., United Solar Ovonics, Xtreme Power Solutions and Clairvoyant Energy — seeking 1705 loans. None has been approved.
"While many members of Congress questioned whether this program would actually be able to produce the promised jobs, members on both sides of the aisle wanted to see jobs created and folks put back to work," said Sean Bonyun, a GOP spokesman for the House Energy Committee.
Damien LaVera, an Energy Department spokesman, noted that only about 40 applicants out of hundreds were granted conditional loan guarantees and that all applicants are rigorously vetted by internal analysts and outside experts.
"We evaluate the technical aspects of an application to make sure the technology is feasible, work to ensure that projects can be built to scale, do extensive market analysis to ensure there is a place in the market for the product, and evaluate the finances of the project to ensure it is commercially viable," LaVera said.
Upton isn't the only Republican critical of the loan guarantee program that has sought loan guarantees for their constituents. Both Rep. Darrell Issa, R-Calif., and Stearns, the chairman of the Energy subcommittee investigating the Solyndra loan, wrote to the Energy Department on behalf of clean energy firms seeking 1705 loans.
Issa defended Republican lawmakers who sought the loan guarantees on behalf of constituents.
"Members of Congress will always ask for money from whatever pool is available to help their constituents," Issa said. "The question is—and Solyndra is an example—is the process one in which it is truly competitive and is without political interference."