A GOP report shows that White House budget analysts had concerns about the financial risks of the Energy Department’s early 2011 restructuring of the federal loan for Solyndra, the solar panel company that collapsed last August, according to a news account.
The Washington Post obtained portions of the House Energy and Commerce Committee’s upcoming report on their lengthy probe of the Obama administration’s support for Solyndra, which cratered last year after receiving a $535 million Energy Department loan guarantee in 2009.
It will likely fuel ongoing GOP political attacks against the embattled loan guarantee program and other White House green energy initiatives – criticism that plays a starring role in Republican National Committee ads backing presumptive nominee Mitt Romney.
The House GOP report shows that an OMB analyst calculated that millions of taxpayer dollars might be saved by cutting the government’s losses, closing the company and selling its assets, according to the Post.
The GOP report also shows that while career OMB staff members circulated e-mails warning of the risks of revamping the loan, senior OMB officials – including then-OMB chief Jack Lew, who is now President Obama’s chief of staff – didn’t discourage the Energy Department from proceeding.
The Energy Department, in a last-ditch effort to save the struggling company, restructured the loan in early 2011, a decision that has prompted strong attacks from GOP critics who called the revisions ill-considered and illegal.
The revision put private investors – who agreed to pump more cash into Solyndra – ahead of taxpayers for repayment if the company was forced to liquidate, which ultimately happened.
Obama administration officials, in statements to the Post, again defend their handling of the Solyndra loan. From the story:
“OMB spokeswoman Moira Mack said the agency’s career staff members, who were responsible for calculating the cost of the proposed restructuring, ultimately determined that the Energy Department’s approach was reasonable, considering the information available at the time.”
The GOP report also notes that some OMB analysts thought a refinancing plan that put private investors ahead of taxpayers – a process called “subordination” – might be illegal, the Post account states.
However, Energy Department officials, in past comments that were reiterated to the paper, have said that attorneys found it was within the department’s authority. A department spokesperson, in the new article, cites the “shared determination by our career lawyers and outside legal experts” that the restructuring was legal.
The Energy and Commerce Committee approved legislation Wednesday that would prevent “subordination” of taxpayer interests in other loans and adds other new restrictions to the clean energy loan guarantee program. Three Democrats supported the bill, two Republicans opposed it.
The head of the Energy Department’s loan program has criticized the bill, saying at a recent hearing that subordination should be available as a rare, last-ditch tool to help support struggling companies that have received federal loans in order to protect the taxpayer investment.
The GOP bill would ultimately phase out the loan program by preventing loans for any applications submitted after the end of 2011.