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

09/30/2011 05:06 pm ET | Updated Nov 30, 2011

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:

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