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House Judiciary chairman urges Justice Department to probe Solyndra loan
House Judiciary Committee Chairman Lamar Smith (R-Texas) called on the Justice Department Monday to investigate a California solar firm that filed for bankruptcy in August after receiving a $535 million loan guarantee from the Obama administration.
Smith, in a letter to Attorney General Eric Holder, requested that the Justice Department appoint an examiner to probe the Solyndra bankruptcy case, citing an investigation by Republicans on the House Energy and Commerce Committee.
“An independent examiner is needed to shed light on the circumstances that led to DOE’s decision to extend, and later restructure, the Solyndra loan,” Smith wrote in the letter.
Smith questioned why the Energy Department’s February agreement to restructure the Solyndra loan guarantee allowed some investors to be repaid before the federal government in the event that the company declared bankruptcy.
“An independent examiner will uncover the truth about whether politics played a role in influencing the Obama administration to favor Solyndra over more financially stable loan applicants and thus ensure the integrity of the bankruptcy process for all creditors,” Smith said.
About two years after the Obama administration approved the loan guarantee, in late August, Solyndra announced that it would suspend its manufacturing operations, lay off 1,100 workers and file for Chapter 11 bankruptcy protection.
Republicans have pounced on the incident, alleging that the Obama administration missed red flags about the company’s financial problems. They have used the bankruptcy to raise questions about the administration’s push to invest in renewable energy.
But the White House pushed back against these allegations last week, arguing that the emails are simply a “scheduling matter” — not an attempt to rush the review of the loan guarantee.
The Energy Department says the Solyndra bankruptcy shows that policymakers need to invest more money in solar energy in order to compete with countries like China, which has invested billions in renewables.
The administration says it will continue to make large investments in renewable energy like solar and wind. The Energy Department, for example, is in the process of finalizing 14 additional loan guarantees by the end of the month. Nine of the pending loan guarantees are for solar projects.
