Secretary Steven Chu acknowledged Thursday making the final
decision to allow a struggling solar company to continue receiving
taxpayer money after it had technically defaulted on a
$535 million federal loan guaranteed by his agency.
spokesman Damien LaVera said in a statement that the secretary
approved the restructuring agreement for Solyndra because it gave
the company “the best possible chance to succeed in a very
competitive marketplace and put the company in a better position
to repay the loan.”
Thursday, a law enforcement official confirmed that the criminal
probe of Solyndra is focused on whether
the company and its officers misrepresented the firm’s finances to
the government in seeking the loan or engaged in accounting fraud.
The official spoke on the condition of anonymity because of the
sensitivity of the probe.
the political front, Chu’s admission came as some members of
Congress were asking whether Chu went too far in trying to help
the company before it went into bankruptcy, leaving taxpayers on
the hook for the loan.
a Nobel laureate and physicist who came to the administration from
academia, arrived in Washington with a mandate to push billions of
dollars in stimulus funds into clean-energy companies and
projects. With keen White House interest, Chu rode herd over an
$80 billion showcase initiative that was supposed to spur a
new “green” industry and economic growth.
was the first company approved for a loan guarantee under the
Obama administration; its application originated several years
earlier during George W. Bush’s presidency. Early on, there were
concerns about Solyndra’s finances, but the company was still
endorsed by President Obama and received high-profile support from
Chu. Both visited the firm at different press events. Chu flew to
California to announce the loan approval at the groundbreaking for
a $750 million factory that was built mostly with funds from
announcing the Solyndra deal in March 2009, Chu boasted of the
“speed at which the department can operate,” according to an
agency news release.
Chu initially set a target to have the first conditional
commitments out by May .
. . but today’s announcement
significantly outpaces that aggressive timeline,” the release
April 2010, the company’s auditors raised doubts about whether the
company could continue as a “going concern” because of cash-flow
problems. The following month, Obama visited the company to praise
it as an “engine of growth.”
late autumn of 2010, company executives confided to the Energy
Department that they were running out of cash and could not make a
required payment to a cash-reserve account. The company was
supposed to begin making the first of $5 million payments to
create a $30 million cash reserve on Dec. 1.
on its loan that day. Chu approved a
softening of the loan requirements so that the company could
continue receiving loan installments.
the choice was between imminent liquidation or giving the company
and its workers a fighting chance to succeed,” LaVera said in the
statement, first reported by Politico.
agency authorized the Federal Financing Bank to give two
additional cash installments to Solyndra — one in December 2010
and another in January 2011. Both payments came before Energy
Department officials finalized a deal to restructure the loan and
forestall the company’s collapse in late February.
Capitol Hill, Republicans continued to complain Thursday that the
Obama administration and Chu had not protected taxpayers.
was the leadership at DOE so stubborn, ignoring every warning sign
that Solyndra was a bad bet, continuing to throw good money
after bad right up until Solyndra’s fate was sealed and taxpayers
were left holding the bag on DOE’s $535 million bust?” said
Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and
Commerce oversight and investigations subcommittee.
is tentatively scheduled to appear before the subcommittee next
month. The House probe seeks to determine whether the White House
sought to help Solyndra for political reasons. The nature of the
separate criminal probe was first reported in an online story by
Bloomberg News on Thursday evening. The leading private investors
in Solyndra were investment funds tied to Oklahoma billionaire
George Kaiser, a prominent fundraiser for Barack Obama’s 2008
Democrats also have questioned Chu’s decision, including Rep.
Henry A. Waxman (Calif.), the ranking Democrat on the Energy and
Gene Green (D-Tex.) said Thursday that he wants to know why Chu
restructured Solyndra’s loan to put taxpayers behind a group of
private investors to be repaid if the company went bankrupt. Two
investors, including an equity fund tied to Kaiser, provided an
additional $75 million to keep the company afloat.
guess I’m surprised that Secretary Chu made the decision earlier
this year to give the private sector priority over the federal
commitment, because your fiduciary duty is to the taxpayer, and
not to an applicant. .
. . Your responsibility is to the
American people,” Green said.
writer David A. Fahrenthold contributed to this report.