House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) on Monday charged that the controversial loan to the failed solar-panel maker Solyndra could lead to hundreds of millions of dollars in lost tax revenue for the government — pushing the total cost far beyond the $535 million already incurred when the company went bankrupt.
He summed up the Solyndra situation by saying the combination of loan and tax losses could put the real taxpayer cost of Solyndra at $849 million.
In addition, Issa asked Chu to explain whether a $529 million loan to a California auto company poses a similar risk of tax losses.
Fisker Automotive received that loan in 2010 under the Advanced Technology Vehicles Manufacturing (ATVM) Program. Fisker has only used $193 million of its $528 million loan so far.
"As the Committee continues to conduct oversight on Fisker's ATVM loan, DOE is withholding important documents regarding these loans," Issa wrote in his letter. "Given DOE's noncompliance, the Committee cannot assure taxpayers that, in the case of bankruptcy, a similar subordination of taxpayer interests will not occur."
A DOE spokesman said Monday that DOE has been careful to manage taxpayer risk for all loan programs under its control.
"From day one, decisions made on loan applications and projects supported by loan guarantees were made on the merits after careful review by experts in the loan program," Damien LaVera told The Hill. "Our consistent goal has been to manage these critical investments in innovative clean energy technologies in a way that manages the risk to the taxpayers."
But Issa cited press reports in explaining that the additional $341 million
in tax losses could be the result of the way in which the Solyndra loan
was restructured. Specifically, Issa said that in 2011, the DOE convinced two private investors to put another $75 million into Solyndra. In return, the government agreed to give up priority status for being repaid in the event of a bankruptcy.
Issa said the restructuring also appeared to give the private investors the right to "maximize their share of ownership of the net operating losses," which would help them lower their tax burden. He cited an IRS statement in U.S. Bankruptcy Court in Delaware saying the final reduced tax liability could be anywhere from $306 million to $341 million.
In light of this possibility, Issa asked whether a loan to Fisker might have been restructured in the same way. He asked Chu to provide all documents related to the tax implications of both the Solyndra and Fisker loans by Nov. 5.
A DOE official familiar with the case downplayed Issa's fear of $300+ million in lost tax revenues, since those tax benefits could only be claimed against future Solyndra profits.
On the idea that some investors are able to claim a greater share of these losses, the official said that was an arrangement on which private investors agreed, and that the government had no say in those negotiations.
And regarding Fisker, the official said there has been on restricting of that loan at all. While DOE appears likely to take the position that Issa's fears about both Solyndra and Fisker are not warranted, it was unclear when DOE planned to respond to Issa's letter.
— This story was updated at 6:30 p.m.