Solyndra executives back out of congressional hearing
Executives of beleaguered solar equipment maker Solyndra Inc. canceled their Wednesday appearance before a congressional investigative committee at the last minute, citing the demands of a complicated bankruptcy and a federal investigation they face.
Solyndra got a $535-million loan as part of the U.S. stimulus package in late 2009 and was held up by the Obama administration as a powerful example of the kind of innovative manufacturing that would revive the economy. But in the last few weeks, the Fremont, Calif., company has closed shop, laid off most of its 1,100 workers, filed for Chapter 11 bankruptcy protection and had its offices and executives’ homes raided by the FBI.
The House Energy and Commerce Committee will hear testimony from administration officials about the government’s loans to Solyndra. The company said in a statement that its executives were busy with the bankruptcy and were discussing a new hearing date with the committee.
The events surrounding Solyndra’s government backing and now bankruptcy have become a political hot potato in Washington.
Republicans have speculated that Solyndra got the half-billion-dollar loan because its biggest investor has ties to George Kaiser, a major fundraiser for President Obama’s 2008 campaign. But Democrats have found enough information in public records of the Energy Department’s loan approval process to try to widen the Solyndra scandal to Republicans as well.
Although Solyndra’s biggest private investor was a venture capital fund affiliated with Kaiser, its second-largest investor was a fund linked to the Walton family of Wal-Mart Stores Inc., who are major donors to Republican campaigns. The chief executive of Solyndra, Brian Harrison, is also a Republican, according to voter registration records.
Kaiser has denied in a letter sent to media outlets that he ever spoke to the administration about the Solyndra loan.
The Democrats’ main defense against accusations of administration cronyism is that Solyndra applied for the Energy Department loan as part of a program created by the Bush administration. Memos prepared by the Republican and Democratic staffs of the House Energy and Commerce Committee said Solyndra first applied for an Energy Department loan in 2006. Its plan to build a factory to manufacture a new kind of solar technology was one of 16 projects chosen from about 140.
In January 2009, shortly before President Obama took office, Energy Department officials reviewed the application. They said that “the project appears to have merit” but did not approve the loan, requesting additional information, including an independent market analysis of the company’s long-term prospects, according to the Republican staff memo.
In March 2009, after the analysis was submitted, Energy Department officials reviewed the application again and gave conditional approval. The March 2009 timetable was set under the Bush administration, according to the Energy Department.
Officials from the White House Office of Management and Budget reviewed Solyndra’s application in August 2009 and “questioned whether the risk rating assigned to the Solyndra deal was too high” and how “competitive pressures” in the market for solar cells might affect the company’s ability to repay the loan, the Republican memo said. OMB officials recommended unspecified changes to the deal, which the Energy Department approved, and it was completed in September 2009.
