The Treasury Department has opened an inquiry into the role one of its units played in granting a $535-million federal loan guarantee to solar equipment maker Solyndra, which collapsed into bankruptcy 10 days ago.
Once heralded by the Obama administration as the kind of innovative manufacturer that could help revive the economy, Solyndra laid off nearly all its 1,100 workers at the end of August and ceased operations.
After it filed its Chapter 11 Bankruptcy Court petition, the FBI raided its offices in Fremont, Calif., and the homes of its executives.
The Treasury inquiry is the third launched by a federal agency into how Solyndra got its federal loan guarantee. The other probes are by the Justice Department and the Energy Department’s inspector general’s office.
Unlike the other two, the Treasury’s inquiry is focused on the actions of its Federal Financing Bank in processing and funding the loan, said Richard K. Delmar, counsel to the Treasury Department’s inspector general’s office.
The Federal Financing Bank “works in a supporting role to the Energy Department, and we’re looking to what kind of responsibility the law gives [it] in these cases and how it carried out its responsibility,” Delmar said.
On Wednesday, House Republicans grilled administration officials about the Energy Department loan program, part of the $787-billion stimulus package Congress approved two years ago.
At the hearing, the GOP suggested that the White House pressured the agency to rush through the loan, in part, to benefit a major campaign donor with ties to Solyndra’s biggest shareholder, a charge the administration denies.
The Solyndra controversy has become an embarrassing distraction to the administration as it tries to sell its new job-creation program. Republicans have used the company’s failure to argue that the stimulus did not work and to dismiss President Obama’s new jobs program as another stimulus plan that won’t work.
In late 2009, the Energy Department awarded Solyndra the loan guarantee to build a new plant, which meant that the federal government and, by extension, taxpayers would have to cover any default on the loan. The Federal Financing Bank lent the money to Solyndra at interest rates lower than those on most other energy projects.