Cliff Stearns On Solyndra: Steven Chu 'Ignored Every Warning Sign'

WASHINGTON -- House Republicans are turning up the pressure on Energy Secretary Steven Chu after a spokesman admitted he was responsible for the final decision to allow Solyndra to keep receiving taxpayer money after the struggling solar company had technically already defaulted on the $535 million federal loan guaranteed by the agency.

The chairman of the subcommittee at the center of the Solyndra investigation, Rep. Cliff Stearns (R-Fla.), told The Huffington Post on Friday that Chu's decision was a direct violation of the Energy Policy Act of 2005, which requires that taxpayers be placed ahead of private investors when it comes to repaying a federal loan guarantee.

"Chu admits that he approved the loan restructuring agreement, bringing up the question -- why did he allow private investors to be placed ahead of taxpayers in recovering any funds if Solyndra failed, which is a clear violation of the Energy Policy Act and the provision on subordination?” Stearns said.

The chairman of the Energy and Commerce oversight sub-panel also accused the secretary of knowing about Solyndra's problems well before he made the decision.

“Secretary Chu and the leadership at DOE ignored every warning sign pointing to Solyndra’s failure and stubbornly continued to commit taxpayer money to a doomed venture that left the American people holding the bag at a cost of $535 million," said Stearns in a statement.

The story comes after the Washington Post reported on Thursday that in March of 2009 Chu green-lighted Solyndra's $535 million loan guarantee, along with a subsequent change that will allow private investors to be repaid before taxpayers in the event of a default.

That revelation has put the Obama administration back on the defensive, with White House spokesman Jay Carney telling reporters Friday that Chu, the Nobel Prize-winning physicist who arrived in Washington via academia, had the president's full confidence.

Earlier this month Stearns called for the firing of Jonathan Silver, executive director of DOE’s loan programs office, following his testimony before the House Energy and Commerce Oversight and Investigations Subcommittee. At the hearing Silver was repeatedly asked to name the person ultimately responsible for the approving the restructuring of the Solyndra loan agreement, and though he was specifically asked about Chu's role in the approval process, Silver declined to name names.

"Our analysis ... reflected the information as it was understood at that time," Silver said at the subcommittee hearing earlier this month.

The Obama administration has also pushed back against allegations of misconduct, with White House spokesman Jay Carney insisting that the White House had not rushed the review of loan guarantees and that the emails presented at the hearing with Silver revealed little more than a "scheduling decision."

Many have cautioned that the drama around Solyndra is overblown, with the Obama administration emphasizing that technology ventures always come with some level of risk. HuffPost's Tom Zeller noted that the Solyndra loan represents just 1.3 percent of the $39 billion in loans that the program has generated thus far, and only around 3 percent of the total loan guarantees targeting the solar industry. The fact that Solyndra received up to $1 billion in private sector banking alone would suggest that leaders at the DOE weren't the only ones who saw promise in the technology.

But such observations won't satisfy the GOP-led investigative panel.

"The problem is with these scandals no one gets fired and they’re all covered up," Stearns said in an interview with the Fox Business Network earlier this month.

Chu is slated to appear sometime soon before the the House Energy and Commerce subcommittee, with Stearns saying he expects the secretary to answer questions about what he knew and when he knew it.

WATCH Stearns on Fox Business Network earlier this month call for Silver's firing:

Comments

[vetxcl]

02:27 PM on 10/04/2011

And here's news you may be able to use: http://cleantechnica.com/2008/02/07/how-to-cheap-or-free-solar-panels/

[Pleroma]

12:53 PM on 10/03/2011

I think the conversation should be about US trade policy, which is what really doomed Solydra financially. And benefited the Chinese, of course.

All of this Obama/Bush prattle is beside the point that this company and even the industry is doomed by US trade policy.

[Genders]

08:07 PM on 10/06/2011

Nope. Chu did doom Solyandra. His official DOE report used old solar number compared to 2016 fantasy pr fossil and nuke numbers. That was why solyandra looked good at 6-10$ per Wp installed, when the real market is at 1-2$ per Wp installed.

US companies are installing rooftop solar for 1-2$ per Wp. That price is right along the curves of the industry over 3 decades. It's only a surprise is you are paid more by the fossil and nuke companies to ignore it.

[Genders]

08:08 PM on 10/06/2011

But, you are right overall, we need Fair trade, not free trade.

[Billy Jack]

11:09 AM on 10/03/2011

You want to talk about ignoring warning signs? How about this one, "Bin Laden Determined to strike within US", Bush, 9/11/01

[Genders]

08:08 PM on 10/06/2011

FF. No kidding! And look up PNAC!

[mdh461]

08:48 AM on 10/03/2011

He said, she said? All meetings in the white house on this subject are tape recorded. This problem can be solved.

[wayoutleft]

03:27 AM on 10/03/2011

What chumps. This is not Europe. Europe has public policies; we cannot even conceptualize the people of America as a society. People here are trying to MAKE MONEY- not be awarded the Order of St. Barney or something. Pols love to give big capitalists money for just about any reason- you name it. They claim that they expect big capital to do socially beneficial things. Why?

[Midnight Cry]

10:37 PM on 10/02/2011

Who arranged the Solyndra loan? A top Obama fund raiser named Steven J. Spinner who, according to ABC, worked to "pick and select fantastic projects" for DOE to fund. During the campaign, he was responsible for raising at least half a million dollars for Obama. Now, he told associates that he "helped oversee the more than $100 billion of loan guarantee and direct lending authority" for DOE's green-energy lending program.

And what a coincidence! Spinner's wife, Allison's law firm Wilson, Sonsini, Goodrich & Rosati got $2.4 million in legal fees to handle the legal work in connection with the Solyndra loan.

The fact is that the Solyndra scandal is just the tip of the iceberg. Much of the DOE green energy lending program is a scam. It is a slush fund of pork for paying back campaign contributors. Top Obama bundler George Kaiser was the chief investor in Solyndra, per Dick Morris.

[sjj734]

03:38 AM on 10/03/2011

Solyndra was in the works during the Bush administration. Execs with Republican ties in the company leadership also. Ultimately, the final approval was given by the Obama administration, but GOP hands are not clean on this either.

[notsostimulated]

07:31 AM on 10/03/2011

The request was denied by the Bush administration. But you already knew that.

[notsostimulated]

07:33 AM on 10/03/2011

I am curious about $2.4 million in legal fees. Am I the only one who finds that amount obscene?

[vetxcl]

02:29 PM on 10/04/2011

I'm curious about your motives.

[JedG]

09:53 PM on 10/02/2011

I keep on hearing from commentors that the Bush Administration stopped their two year push to get the $545 million dollar funding at the end of Bush's term.

I can't find anything out there that confirms that statement.

I did find the following:

"The Department of Energy's loan guarantee credit committee, not the OMB, remanded the application, saying that that although the Solyndra project "appears to have merit," the committee needed more information. The loan programs staff -- still under the Bush administration -- subsequently developed a schedule to complete Solyndra's due diligence that would approve the conditional commitment in early March 2009 and close it by April 2009."

"Even FoxNews.com reported that 'the Bush officials were still weighing the decision on a loan right up until the handover to the Obama administration.'"

"In March the credit committee, staffed with the same career officials that previously remanded the application, recommended approval."

It appears that the Obama Administration made two major mistakes.

1. It was too anxious to try and make good on his commitment to make good on the renewable energy issue his Administration assumed that the Bush commitment to Solyndra was valid.

2. Assumed that the Bush appointed credit committee that approved the loan was reliable.

Those two assumptions about the integrity of the Bush White House were Obama's only mistake on this issue.

[demsrsilly]

05:20 AM on 10/03/2011

Pretty sure that you will lose some lib points for even stating that obama made a mistake.

So really, if what you say is true, then it is the Bush administration that wanted to make huge investments in renewable energy, not the obama administration.

Odd how joe biden took all the credit for the obama administration during the half billion dollar photo op for the investment. 

[energydem]

09:18 PM on 10/03/2011

The loan guarantee programs were established in statute by the Congress. What was either administration supposed to do, ignore the law? I am glad Jed provided some real information instead of trying to wade through the urban and rural myths on these sites. I don't agree that those were the only mistakes the Administration made on Solyndra however. Solar needs production tax credits not loan guarantees.

[HaeJee]

09:33 PM on 10/02/2011

This is not a sign of complete neglect on Obama's part….. that Stearns, wants others to believe. Considering it is coming from a biased Republican that considers anyone in Obama's administration as the enemy. The federal government is ran off regulations and procedures created by BOTH conservatives and liberals. If Stearns wants to find fault, then he needs to educate himself on federal regulations and policies to understand that they are created by both parties. When regulations are created, you have to have enough votes and support by politicians on both sides. Chu, being Chinese American may have been influenced by his culture of following procedure and NOT asking questions or raising issues he PROBABLY should have done. Solyndra is a shared failed among conservative and liberal politicians. I can only assume they dropped the ball during the other fire fighting situations.

I certainly won’t forget how we got here. Thanks to Bush caring more about baseball and Cheney reluctantly running this country.

[castlemike]

08:49 PM on 10/02/2011

Public scape goat identified.

[vetxcl]

02:30 PM on 10/04/2011

News you can use: http://cleantechnica.com/2008/02/07/how-to-cheap-or-free-solar-panels/

[Sharon Hunt]

08:45 PM on 10/02/2011

oh, just another so called "report" from the fair and balanced network. Yawn.

[hoffalypse]

10:59 PM on 10/02/2011

HAHAHAAHA ur government is screwing u and u blame fox news somehow... wakeup buddy

[destin023]

06:34 PM on 10/02/2011

"Many have cautioned that the drama around Solyndra is overblown, with the Obama administration emphasizing that technology ventures always come with some level of risk."

The above quote is not the point & the liar Obama knows it. Solyndra's never made a dime from the first shipment of panels to the day they finally admitted it. Obama was warned of this repeatedly & said "to hell with it, it's the little peoples' money". The article goes on to explain nonchalantly that it's only a half billion repesenting only 1.3% of a failed industry that can't compete with the lion's share of the market China is winning over. There is only a limited amount of business/homes that will utilize solar as a second tier & non reliable energy source. Obama willingly lied then promoting Solyndra as he willingly lies about everything he's incompetent about. He is beyond inept, he's in a class of arrogant ignorance never before seen in the WH..

[energydem]

09:22 PM on 10/03/2011

And you know for a fact that President Obama said "to hell with it, it's the little people's money". Get real and stop fabricating. The president of the United States would never be involved in a contract at the Department of Energy. Staff would never let that happen. And technology ventures do always come with some risk. Stop hating.

[Patriot86]

05:00 PM on 10/02/2011

A big who cares... I would rather try and fail then do nothing like the GOP has done.

[Quitcherbichin]

05:53 PM on 10/02/2011

....and it only cost us 535M...that's one helluva lot of trying.

[DaveMac45]

08:04 PM on 10/02/2011

I guess you didn't read this part.

"Solyndra loan represents just 1.3 percent of the $39 billion in loans that the program has generated thus far, and only around 3 percent of the total loan guarantees targeting the solar industry. The fact that Solyndra received up to $1 billion in private sector banking alone would suggest that leaders at the DOE weren't the only ones who saw promise in the technology."

[Patriot86]

08:59 PM on 10/02/2011

Yeah well, GOP would rather subsidize Nascar then invest in alternative energy...which is the future...sure let China get the trillions of dollars ...instead of us...good little GOP drones.

[Nightangle]

08:04 PM on 10/02/2011

I care, I care a LOT.

Solyndra went into bankruptcy and instead of creating jobs estimated at 1200, it laid off 1100 existing employees. During it's 18 months existence, it created about 500 jobs. During the bankruptcy hearing, the Judge assessed 75 million which Solyndra did not have, so the government had to pay another $75 million. Total government subsidy so far would be 615 million. That's about 1.23 million/per job created + the loss of $1100 existing employees.

Solyndra is not alone. The EDD has back other 3 solar energy companies - Abound Solar, SoloPower, and 1366 Technologies - these 3 solar energy companies received $806 million guaranteed load from Energy Dept.

Separately, Stirling Energy Systems filed for Chapter 7 liquidation last week, yet another in a string of solar companies to seek bankruptcy protection.

And what about a satellite company called LightSquared ? gratewire.com › General Open Forum

[Patriot86]

08:58 PM on 10/02/2011

We should be out and out subsidizing these alternative energy companies until they are strong enough to stand on their own..stop allowing China to dump and presto America wins...of course you care because you h8te Obama but I see this as a failure to have a national policy with R&D supported by government...we absolutlely need to get off of oil and why should we give China who is a threat to us the new alternative energy business which is worth trillions of dollars...it is ins_ane and shows the usual lack of interest in the future which the GOP is completely guilty of-they are like plodding turtles with no vision at all...they have cost us so much money with their regressive policies....we need to partner with buisness and make successful alternative energy companies...it is a dangerous business to continue to enrich China with American dollars, and we will bitterly regret it in the end.

[knott wrench]

03:59 PM on 10/02/2011

That was OUR US Taxpayers Money Mr.Steven Chu Allwoed to be Flushed down The Toilet!

Let's send him on "Vacation" to do some "Time" with Bernie Madoff and Friends"

[mashtoe]

03:46 PM on 10/02/2011

Chu is working for communist China. His job is to get US taxpayers to pay for R

[JedG]

10:10 PM on 10/02/2011

The Waltons (major Republican donors) of Walmart fame dropped just under $100 million on Solyndra during the Bush's final year. Walmart, AKA Chinamart, is really working and investing in China, Chu is not.

[JJenius]

03:28 PM on 10/02/2011

When will everyone realize that ONLY CONGRESS can allocate funds, tax, and borrow. Read the U.S.Constitution Section 8. This whole deal started when Bush was in office and the then CONGRESS allocated funds! Cheeze!

[knott wrench]

04:01 PM on 10/02/2011

Still, he was the "Accountability/'Gatekeeper'" of these funds. At least he got a pay cheque when showed up for "Work" little that it appears he did.

[Uhgg]

06:11 PM on 10/02/2011

and the Bush Administration Held out because of warning signs that the company was not in good shape

[JedG]

10:15 PM on 10/02/2011

That's a totally false and well refuted statement. Bush and the Bush appointed committee was still in place in March 2009 and had been trying to get final just before and after Bush left office. Bush nor his hand picked committee never "stopped" the funding. They just had trouble getting the documents ready before the administration changed.

The Obama Administration's error was believing them.