Investigators Probe White House Role in Massive Energy Loan
Republican congressman says WH "monitored" $535 M loan guarantee.
Sept. 2, 2011 — -- House investigators said they have uncovered evidence that White House officials became personally involved in an Energy Department review of a hot-button $535 million loan guarantee to the now-failed California solar company Solyndra.
The allegation surfaced in a letter House Energy Committee Chairman Fred Upton (R-Mich.) sent to the White House Thursday night, saying he planned to accelerate efforts to understand an investment deal that may have left taxpayers out half a billion dollars.
"We have learned from our investigation that White House officials monitored Solyndra's application and communicated with [Department of Energy] and Office of Management and Budget officials during the course of their review," the letter says.
Thursday's letter, which calls on the White House to turn over correspondence between administration officials, Solyndra and its investors, presents the most pointed suggestion that the White House had direct involvement in the financing.
"How did this company, without maybe the best economic plan, all of a sudden get to the head of the line?" Upton told ABC News in an interview this week. "We want to know who made this decision ... and we're not going to stop until we get those answers."
READ: Solyndra Collapse a 'Waste' of Half a Billion By Obama, GOP Critics Say
White House officials have said in interviews that they did not intervene in the Solyndra deal or others benefiting companies backed by supporters of the president. Yet the administration, from Obama to the Department of Energy, has very publicly praised the loan guarantee.
In 2009, the Obama administration hailed the Solyndra loan as the first in a series of federal infusions for "green energy" firms that held the potential to clean up the environment and create jobs. But earlier this week, Solyndra abruptly closed its doors, announced it would file for bankruptcy and laid off more than 1,100 workers.
While Energy Department officials steadfastly vouched for Solyndra -- even after an earlier round of layoffs raised eyebrows -- other federal agencies and industry analysts for months questioned the viability of the company. Peter Lynch, a longtime solar industry analyst, told ABC News the company's fate should have been obvious from the start.
"Here's the bottom line," Lynch said. "It costs them $6 to make a unit. They're selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan."
Other flags have been raised about how the Energy Department pushed the deal forward. The Center for Public Integrity's iWatch News and ABC disclosed that Energy Department officials announced the support for Solyndra even before final marketing and legal reviews were in. To government auditors, that move raised questions about just how fully the department vetted the deal -- and assessed its risk to taxpayers -- before signing off.
READ: Did Obama Administration Cut Corners for a Green Energy Company?
The White House's Office of Budget and Management viewed the arrangement as a riskier bet to taxpayers than DOE had. That forced the government to set aside millions more in case of a default, iWatch reported last month.
Republicans in Congress have raised questions for months about the Energy Department's decision to make Solyndra the poster-child for the green energy loan program. They expressed concern that so much federal money was headed to a company whose key investor was George Kaiser, an Oklahoma billionaire who raised more than $50,000 for Obama's 2008 presidential campaign. Since May, Kaiser has declined interview requests.
The Obama administration has said the loan to Solyndra came only after a thorough review by Energy Department analysts, and that no one from the White House exerted pressure to influence the decision to back the loan in 2009, or to restructure the financing this year after it became clear Solyndra was not thriving financially.
Asked about the wisdom of throwing its support behind Solyndra, Press Secretary Jay Carney said there is always risk in such a financing. But in the case of Solyndra and other green energy firms, he said, the risk is worth it.
"I think there were Republicans who thought investments in clean energy were a mistake, that they were ready to cede that vital industry to foreign competition," Carney said during Thursday's White House press briefing. "They were ready to cede the automobile industry to foreign competition, a million jobs there. I -- we just disagree on that front."
The Oklahoma-based George Kaiser Family Foundation, a prime investor in Solyndra, said in a statement cited by the Tulsa World newspaper that the company had been unable to overcome "serious challenges in the marketplace, especially the drastic decline in solar panel prices during the past two years caused in part by subsidies provided by the government of China to Chinese solar panel manufacturers."
