Thursday, August 02, 2012

House GOP Report On Solyndra & DOE Loan Guarantee Program

Aug 2: The House Energy and Commerce Committee Republicans released an extensive report detailing the findings of its investigation into the Department of Energy's (DOE's) management of its loan guarantee program. The 147-page report chronicles the committee's 18-month investigation into what Republicans called DOE's failed $535 million loan guarantee to Solyndra, which included the review of over 300,000 pages of documents, interviews with numerous individuals, and five committee oversight hearings. The report was released following the committee's approval yesterday of the "No More Solyndras Act," legislation authored by full Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) to ensure taxpayers will never again be left on the hook for risky bets like Solyndra or other stimulus failures [See WIMS 7/13/12].

    The report states, "Now, after a thorough review of the record, the Committee is able to present a complete picture of the facts and circumstances surrounding the DOE's decision to award a loan guarantee to Solyndra, and the roles various Executive Branch agencies, including the White House, played in these events."

    According to a Republican release, the report details the evidence gathered during the course of the investigation and the committee's conclusions. "The evidence demonstrates administration officials knew Solyndra was a bad bet from the beginning, but the White House was determined to make Solyndra a stimulus success story at any cost. Despite repeated warnings that Solyndra was doomed to fail, the Obama administration went ahead in backing the solar company, cutting corners in the process, and rushed the loan guarantee out the door. The investigation also found DOE knowingly violated the law when it restructured the terms of the loan guarantee and subordinated taxpayers' interest to the interests of private investors.

    "Documents obtained by the committee exposed a startling relationship between Solyndra and another stimulus-backed project. The report details Solyndra's role as a supplier for Prologis' Project Amp, a solar panel installation project and the recipient of a partial loan guarantee for $1.4 billion. The White House was well aware of Solyndra's deteriorating financial condition when it allowed DOE to move forward with Project Amp.  DOE would later use the relationship between Project Amp and Solyndra as a key bargaining tool to push for a second restructuring while directly engaging in last minute negotiations between Solyndra and the Project Amp sponsor."

    The release also indicates that the report also gives an in-depth look into "the role played by one of President Obama's prominent backers in the administration's decision to issue the loan guarantee and the loan's restructuring that put taxpayers behind two private investors. Key decision makers at DOE, including head of the loans program office Jonathan Silver, knew of billionaire George Kaiser's influence and attempted to leverage it." According to the report, "Individuals connected to the George Kaiser Family Foundation (GKFF) -- whose primary investment arm, Argonaut, was Solyndra's largest shareholder -- played important roles in a series of critical discussions and negotiations with DOE. George Kaiser, whose fortune funds the GKFF, was closely involved in financial decisions related to Solyndra, often authorizing key disbursements and restructuring proposals, as well as in Solyndra's lobbying, public relations, and government procurement strategies in Washington."

    Chairman Upton said, "Solyndra will be remembered in the history books as a sad hallmark of a newly installed administration that felt it was above the rules, lusting for positive headlines rather than focused on delivering results. We now know the first domino of the Solyndra mess was DOE cutting the Treasury Department out of the approval process in the rush to send what will go down as the most expensive press release known to man. Now, Solyndra is a painful reminder of why the federal government should not be in the venture capital business. Our investigation revealed a shocking episode where politics were put before taxpayers and integrity was sacrificed for the sake of corporate favoritism. We discovered the problem, and now we reported legislation to correct the situation in The No More Solyndras Act to ensure that taxpayers will never again be the victims of the administration's blind political ambition and gross negligence."
    Representative Stearns said, "What was once the poster child for the administration's green energy spending plan, Solyndra is now a symbol of President Obama's failed stimulus economy. Our investigation uncovered a political saga starring key White House officials and big Obama donors. The story reaches a turning point when DOE subordinates taxpayers to outside funding and then Solyndra files for bankruptcy, laying off employees and leaving taxpayers on the hook for millions of dollars. While this may make for a great Hollywood drama, it is a disturbing truth for taxpayers. We must ensure that the Solyndra story is never repeated."

    Rep. Ed Markey (D-MA) issued a release saying, "Energy and Commerce Republicans today released their 'report' on their specious probe into the solar firm Solyndra. He said, "Mitt Romney and Republicans in Congress are trying to deliver a knockout blow to clean energy through this one-two punch of investigating solar companies and forcing wind companies to lay off 40,000 workers. At the same time, they are protecting tens of billions of dollars in handouts to the nuclear and fossil fuel industries that are supporting their campaigns. The Solyndra investigation hasn't uncovered a scandal, but instead has created a symbol for Republicans to appease their fossil fuel fundraisers and eliminate competition for oil, coal and nuclear energy."
    Rep. Markey indicated in a release that, "Republican hypocrisy over their stated goal of oversight and the picking of winners and losers in the energy market was put on display yesterday when [he] offered an amendment to the 'No More Solyndras Act' that was passed out of the Energy and Commerce Committee. His amendment would have eliminated the loan guarantee program entirely, unlike the Republican bill which grandfathers more than $100 billion in applications that are still in the pipeline for nuclear, coal and other energy projects. All but three Committee Republicans voted against the amendment."
    Rep. Markey also offered other amendments to prevent the Department of Energy from awarding loan guarantees to troubled nuclear projects favored by Republicans that were also defeated. He indicated that these included amendments to prevent loan guarantees from being awarded to companies threatened with delisting from stock exchanges (such as the United States Enrichment Corporation, which has a $2 billion loan guarantee application pending), companies whose net losses in the past year exceed the $535 million value of the Solyndra loan guarantee (such as the United States Enrichment Corporation) and companies whose projects are already more than $535 million over budget (such as Georgia Power Company, which has had its $8.3 billion nuclear loan guarantee application conditionally approved). He said Republicans also rejected an amendment to ensure that 75 percent of each project's loan guarantee funds are not used to outsource jobs, a charge levied by Republicans against the Obama Administration's clean energy programs.
    Access a Republican release with a summary of findings and link to the complete report (click here). Access a release from Rep. Markey (click here). Access the Republican Committee website on markup of the H.R.6213 and other bills including voting details, statements, videos, etc. (click here). Access the Democrats Committee website with similar information (click here). [#Energy/Solar, #Energy/Wind]
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