“Political pressure” by a White House eager to tout its stimulus agenda was largely to blame for fast-tracking the ill-fated $535 million Solyndra loan guarantee, according to findings in a massive new congressional report released Thursday morning.
The report, by Republicans on the House Energy and Commerce Committee, caps a nearly yearlong investigation by the panel into why the government allegedly ignored red flags to approve the loan. Solyndra, a solar-panel firm, filed for bankruptcy last year.
“It is clear DOE should never have issued the loan guarantee to Solyndra,” the report said, adding that a subsequent decision to restructure the terms “violated the plain language of the law.”
The report, which follows another GOP-authored congressional study earlier this week on the Fast and Furious scandal, is sure to fuel an election-year furor over questionable taxpayer investments in private companies.
The Obama administration has argued that the overall loan guarantee program has been successful and critical to supporting alternative energy innovators. In response Thursday, the administration blasted the GOP report and defended the integrity of the program.
“This is month eighteen of this congressional investigation and everything disclosed … affirms what we said on day one: this was a merit based decision made by the Department of Energy,” White House spokesman Eric Schultz said. “As Republicans won’t answer how much investigation has cost taxpayers, we believe they should instead be focused on legislation to creating jobs and grow the economy.”
But an overriding theme in Thursday’s report is that the Department of Energy was under pressure from the beginning in 2009 to approve the Solyndra loan guarantee despite warning signs.
“This report conclusively shows that DOE pushed forward with the guarantee despite these warnings because of the Obama administration’s desire to use the Solyndra guarantee to highlight its stimulus,” the report said.
The report cited a March 2009 phone call between an Energy Department official and the White House, calling that the genesis of the “conditional commitment” — incidentally just a few weeks before a major Obama speech on the stimulus — though “key terms” of the deal were not settled.
Further, the report said the September 2009 closing was guided by a Sept. 4 groundbreaking event, claiming the closing date was set by the White House and Energy Department before the budget office’s review.
That review, the report said, then “took a mere 9 days, even though it was the first DOE loan guarantee ever made.”
The report concluded that the overall loan guarantee program was a “poor fit for the stimulus,” citing an October 2010 memo that noted some projects probably would have gone forward without federal funding.
The report did not level corruption charges at the administration, despite early suggestions by lawmakers that cronyism was at play. The report did claim that George Kaiser, an Obama backer whose foundation invested heavily in Solyndra, was “closely involved” in decisions on the loan.
Meanwhile, the House Energy and Commerce Committee on Wednesday approved a bill that would end for good the loan guarantee program and impose new safeguards over existing loans.