White House to scrutinize Energy Department loan guarantees
Reporting from Washington
Shifting its position on Energy Department loan guarantees, the White House said it would review all pledges to avoid such ill-fated decisions as the much-publicized $535-million loan guarantee for California solar equipment maker Solyndra, which fell into bankruptcy early last month.
The step aims to defuse the embarrassing Solyndra episode, which has given rise to criticism that the Obama administration has wasted hundreds of millions of dollars in public money.
White House Chief of Staff William Daley on Friday ordered the 60-day evaluation and asked for recommendations about “how to improve the loan monitoring process,” the White House said.
Leading the inquiry is Herb Allison, a former Treasury official who oversaw the federal bailout program for the financial sector.
Daley, in a prepared statement, said that “while we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars.”
Allison will review all three Energy Department loan guarantee programs, totaling about $36 billion. The program that supported Solyndra no longer makes new guarantees because funding for it expired Sept. 30. The department said it would work with Allison and heed his findings.
In a news conference this month, President Obama defended the loan program, asserting that “the overall portfolio has been successful.”
“It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It’s helped to create jobs,” he said.
Obama’s defense opened him to charges that he has been tone deaf to the political implications of Solyndra, which could cost taxpayers as much as $535 million. With the economy still weak and deficits topping $1trillion, the White House can’t afford to be seen as a lax overseer of taxpayer dollars.
Republicans have seized on the issue. As Obama crisscrosses the country pressing for his $447-billion jobs plan, Republicans have been citing Solyndra as an example of stimulus spending that backfired.
GOP presidential candidate Mitt Romney, speaking at the Values Voter Summit this month, said: “I welcome renewable energy. But as an old venture capitalist myself, I can tell you this: There will be no more Solyndras.”
The Republican National Committee put out a statement saying the White House was trying to make a “scapegoat” out of Energy Secretary Steven Chu, who has kept a low public profile.
Meanwhile, investigators are poring over the Solyndra deal. The Justice Department and congressional Republicans have been investigating the loan since the company went bankrupt. At the request of Republican-controlled congressional committees, the White House turned over thousands of emails, some of which showed administration officials rushing to approve the deal in time for a glitzy photo op.
The White House has balked at releasing everything in its possession, including the president’s BlackBerry messages.
Republicans are threatening to use subpoenas to get more information, even as the administration prepares to release thousands more emails in the coming months. And they aren’t stopping at Solyndra.
Congressional investigators have recently turned their attention to loans guarantees granted by the Energy Department to two automakers — Fisker Automotive Inc. and Tesla Motors Inc. — and to the U.S. subsidiary of a Russian-owned steel company.
Solyndra produced a promising new version of solar panels at its Fremont plant and attracted more than $1 billion from major investors and government help, including tax credits from California.
The federal loan guarantee in 2009 was the first approved under a new Energy Department program, making Solyndra a symbolic standard-bearer for the administration’s push for investing in green jobs.
Obama visited the plant in May 2010, touting the permanent jobs it had created.
But the company was running into trouble trying to compete with suddenly lower-priced conventional panels from China. It faltered for more than a year before firing all 1,100 employees and closing its doors at the end of August. It filed for bankruptcy Sept. 6.
Times staff writer Tom Hamburger contributed to this report.
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