Stephen Chu's Toughest Solyndra Questions
Today, Republicans on the House Energy and Commerce Committee will try their best to draw concessions from Energy Secretary Stephen Chu for his department's support of Solyndra, the first renewable energy company to receive a loan under President Obama's 2009 stimulus package, which has since gone belly up.
Today, Republicans on the House Energy and Commerce Committee will try their best to draw concessions from Energy Secretary Stephen Chu for his department's support of Solyndra, the first renewable energy company to receive a loan under President Obama's 2009 stimulus package, which has since gone belly up. Republicans say the Department of Energy's $535 million loan guarantee to a company financed by Obama bundler George Kaiser smacks of corporate cronyism but Chu, in remarks prepared for today's testimony, says "I want to be clear: Over the course of Solyndra’s loan guarantee, I did not make any decision based on political considerations.” The hearing will likely cite some of the more than 186,000 pages of documents released by the DOE related to the Solyndra loan. Here are some of the toughest questions Chu will have to face. (Update: watch the hearing live on C-SPAN here.)
Why such a rush? One of the e-mails released by House Republicans Wednesday, show internal divisions over Chu's apparent eagerness to grant a loan to Solyndra. In reference to a July 2009 Dow Jones story where Chu says the loan to Solyndra "is theirs, as soon as they get the additional capital that's required by statute" and that the loan's approval was "imminent," a DOE staffer appears frustrated saying "This nonsense has to stop ... The conclusion that ‘the loan is theirs’ doesn’t help our negotiation.”
What about other green energy loans? An idea that Rep. Cliff Stearns, the House Republican leading the Solyndra investigation, is likely to push is whether the Solyndra failure is an outlier or more indicative of the direction of the White House's green energy program. In an article this morning, Stearns tells Politico “Out of the first three loans out of the gate, two of them, Solyndra and Beacon Power, have gone bankrupt ... The larger issue is, are the rest of the loan guarantees in the same shape as Beacon Power and Solyndra, and see if his confidence that this is the last bankruptcy, or are there more? How much more does he think taxpayers are going to lose?” On those arguments, Chu appears ready to face-off with Stearns. In his released remarks he said, "we are currently at risk of falling behind our global competitors who are seizing the opportunity by investing more heavily and establishing market policies that give them a strategic advantage." He adds, "There are some who say that we cannot compete with China. respectfully disagree. However, time is of the essence.”
Did Energy put investors before taxpayers? The Washington Post points out another document release that could be played up today concerning who would get paid first, taxpayers or Solyndra investors if the company went bankrupt:
One new document expected to be cited at Thursday’s hearing is a December e-mail to Kaiser from Steven Mitchell, who was managing director of Argonaut and a member of Solyndra’s controlling board. Mitchell wrote that the Energy Department shot down Argonaut’s plan for the agency to rescue the company from a liquidity crisis, so “we politely moved the conversation toward” how to file for bankruptcy.
“To me it was clear the DOE folks were somewhat caught off guard that we weren’t going to bail out the company,” Mitchell wrote. A senior Energy Department staffer responded by suggesting that if Argonaut and other investors contributed an additional $75 million to keep the company afloat, they would be placed ahead of taxpayers for repayment if the company went under, the e-mail said.