- Category: Politics
03 Aug 2012
- Published on Friday, 03 August 2012 09:41
- Hits (838)
The House Energy and Commerce Committee released a report detailing the findings of its investigation into the Department of Energy’s management of its loan guarantee program.
The report, released a day after the same committee approved the “No More Solyndras Act”, finds that despite warnings from analysts, the Obama administration opted to restructure the Solyndra deal instead of cutting losses on a $535 million loan, which led to bigger costs to taxpayers when the company declared bankruptcy.
Included in the report was an analysis done by a financial analyst at the White House Office of Management and Budget, who said in January 2011 that the government would recover more of its money if it allowed the struggling company to go bankrupt instead of giving Solyndra another chance.
The report also cited an assessment of Vice President Biden’s Chief of Staff Ron Klain, that loan guarantees “present harder problems” than just giving people cash because [the government] is presumed to expect to be paid back.
Mr. Klain had added that determining which companies should receive loans was the challenge, and that “pioneering” companies like Solyndra were risky to be given loans compared to larger and “more proven” companies.
“The White House was determined to make Solyndra a stimulus success story at any cost,” the committee’s press release said. “[Despite warnings], the Obama administration went ahead in backing the solar company, cutting corners in the process, and rushed the loan guarantee out the door.”
The report detailed Solyndra’s role as a supplier for industrial real-estate firm 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,” they said. “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.”
Committee Chair Fred Upton said the company “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.”
“Now, Solyndra is a painful reminder of why the federal government should not be in the venture capital business,” he added. “Our investigation revealed a shocking episode where politics were put before taxpayers and integrity was sacrificed for the sake of corporate favoritism.” – N. Arboleda