Energy Secretary Chu Takes Full Responsibility for Solyndra
Chu denies politics played a role in $535 million loan to failed solar firm.
Nov. 16, 2011 — -- Energy Secretary Steven Chu will accept full responsibility Thursday for the decision to risk $535 million on Solyndra, the government-supported solar panel manufacturer that shut its doors earlier this year laying off 1,100 workers, and is now the subject of multiple federal investigations.
"As the Secretary of Energy, the final decisions on Solyndra were mine, and I made them with the best interest of the taxpayer in mind," Chu has written in testimony prepared for his first appearance before Congress to answer questions about the failed loan.
"I want to be clear: over the course of Solyndra's loan guarantee, I did not make any decision based on political considerations," says Chu's prepared testimony, which was made public by his aides late Wednesday. "My decision to guarantee a loan to Solyndra was based on the analysis of experienced professionals and on the strength of the information they had available to them at the time."
Chu's testimony before a House Energy and Commerce subcommittee that has been investigating the loan is expected to be followed by pointed questions from Republican members who have been highly critical of the Solyndra loan. The loan to the California energy firm was at one time held up by the Obama administration as a model of the president's plan to infuse start-up clean energy firms with federal support in hopes of sprouting a vibrant new high tech industry.
But as ABC News first reported in March, in partnership with the Center for Public Integrity, the model first loan was emerging as a troubling example of a program that was taking big risks with public funds, and was in some instances benefitting investors who had strong political ties to Obama. One of the top investors in Solyndra, Oklahoma billionaire George Kaiser, was also a prolific fundraiser for Obama during the 2008 campaign.
The Energy Department has maintained that the program remained untainted by politics, and that recipients of billions of dollars in federal loans were selected exclusively based on their potential for success – with no political consideration. In advance of Thursday's hearing, investigators with the Republican led committee released the latest batch of internal emails it has reviewed. Among them were emails that suggested that Energy officials asked the company to delay layoffs at its California facility until after the Nov. 2 midterm elections.
The two congressmen leading the investigation, Reps. Fred Upton (Mich.) and Cliff Stearns (Fla.) released a statement saying they hope Chu's testimony will "shed light on key questions about the decision-making inside the Department of Energy and the role of other agencies and officials, from the Office of Management and Budget to the west wing of the White House."
"We want to hear his thoughts on why two of the first three loans made with stimulus subsidies have gone belly up," the Republicans' statement said. "We need to understand why red flags were ignored because of the urgency to get these dollars out the door. And we need to know whether this administration believes, after all we have learned, whether it was a mistake to put taxpayers on the line for half a billion dollars to this one company."
Chu's prepared remarks indicate he will defend the decision to loan money to Solyndra as part of a risky but nonetheless essential program aimed at keeping the U.S. competitive with other countries competing for dominance in the emerging clean energy space. His testimony describes the tough choices the Energy Department faced as it discovered Solyndra's business plan was finding it increasingly difficult to compete with China.
"The Department faced a difficult decision: force the company into immediate bankruptcy or restructure the loan guarantee to allow the company to accept emergency financing that would be paid back first if the company was still unable to recover," Chu's testimony says. "Immediate bankruptcy meant a 100 percent certainty of default, with an unfinished plant as collateral. Restructuring improved the chance of recovering taxpayer money by giving the company a fighting chance at success, with a completed plant as collateral."