As the Obama administration moved last year to bail out Solyndra, the embattled flagship of the president’s initiative to promote alternative energy, a White House budget analyst calculated that millions of taxpayer dollars might be saved by cutting the government’s losses, shuttering the company immediately and selling its assets, according to a congressional investigation.
Even so, senior officials in the White House’s Office of Management and Budget did not discourage the Energy Department from proceeding with its plan to restructure a federal loan to Solyndra — a move that put private investors ahead of taxpayers for repayment if the company closed, the investigation by Republicans on the House Energy and Commerce Committee found.
(Charles Dharapak/AP) - Vice President Biden spoke in 2009 about green energy initiatives and Solyndra.
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The restructuring went forward, but within months Solyndra failed anyway, leaving federal taxpayers on the hook for much of the half-billion-dollar federal loan. Now, a year after the company’s collapse, debate continues over whether the refinancing plan was legal or a wise investment. Last week, Solyndra’s final liquidation plan estimated that the government will recover just $24 million of the $527 million that taxpayers lent to the company.
Details about the debate emerge in internal government documents. They show that Energy Department officials argued that Solyndra might be able to pull out of its downward spiral if given an emergency infusion of cash.
They also show that career OMB staff members circulated a series of e-mails emphasizing the risks of restructuring the loan. In congressional testimony last year, the agency’s deputy director suggested that career staff members made the final determination about what to do and “used their best expertise.”
The House energy committee is expected to release the results of its 18-month investigation into Solyndra this week. Its report, parts of which were obtained by The Washington Post, suggests that then-OMB Director Jack Lew let the refinancing move forward without intervening, even though some OMB analysts thought a refinancing plan that favored private investors might violate the law. Lew is now White House chief of staff.
Solyndra abruptly shut its doors in August 2011 and defaulted on its loan. A short time later, the FBI raided its offices in Silicon Valley as part of a criminal investigation into whether the company misled the government about its finances.
The congressional report, which revisits a number of events previously reported in The Post, may provide additional ammunition for Republican presidential candidate Mitt Romney, who visited Solyndra’s shuttered plant earlier this year and cited it as a symbol of wasted stimulus money. Republicans have accused the administration of favoring Solyndra because its largest investors were funds linked to Oklahoma billionaire George Kaiser, a fundraiser for the president.
Energy Department spokesman Damien LaVera said Wednesday that the department stands by its earlier conclusion that restructuring Solyndra’s loan provided the best hope for the company’s success and for protecting taxpayers.