Taxpayers on Hook For 535 Million

November 18, 2011

Today Steven Chu, Energy Secretary entered the Rayburn Office building inWashingtonD.C.to testify at the Energy and Commerce Sub Committee on Oversight and Investigation.

Chairman, Representative Cliff Stearns (R) Florida opened the hearing concerning the 535 million dollar loan guarantee to the now defunct Solyndra Company. “It is readily apparent that senior officials in the administration put politics before the stewardship of taxpayer’s dollars”.

The investigation has been active for 9 months with many questions surfacing on why the Department of Energy would guarantee this loan at the end of the Bush administration would not make the loan guarantee stating DOE had too many issues with the cash flow of the company and the liquidity remained unresolved.  They ended discussions with Solyndra.

Later in the month President Obama was inaugurated and Steven Chu was put in charge of the DOE.  Secretary Chu pushed the loan though quickly and pressed for action on this company.  Solyndra was labeled “A Litmus test” to fund Green projects.

The Office of Budget Management could not score the company correctly and 6 months after receiving the 535 million dollars Solyndra was struggling and one year later they started to default on the terms of the loan.

At that point Secretary Chu made several waivers and “Last minute offers” subordinating the loans to private investors according to Rep. Stearns and now we have huge problems with a few of the loans Secretary Chu pushed through. Several have blown up and now have filed for bankruptcy. The President and colleagues have never addressed these loans and have made statements such as this one, “Hey, sometimes these things just don’t work out”.

Secretary Chu testimony was given under oath as is any testimony in front of Congressional Committees under Title 18, Section 1001 under United States Code.  The Secretary was asked if he would require Consul and he rejected before being sworn in.

Secretary Chu opened with a five minute statement addressing the clean energy sector and the race to bring the industry to America. There are hundreds of billions of dollars spent on Clean Energy around the world.  “Over 50 countries offer some kind of public financing” for the industryChuexpressed.

Through the loan programs there are over 38 companies working on reducing our countries dependence on fossil fuels.  These companies need the funding from the government to achieve their goals as private sector funds are not available currently to loan all these start-up industry.

Solyndra had invested nearly a billion dollars of private funds to the business before applying for the half a billion dollar loan through DOE.  The Secretary looked at all information available and felt he was doing what was right and good for the taxpayers of this nation. “As Secretary of Energy the finally decisions on Solyndra were mine” Secretary Chu emphatically went on, “I did not make any decision based on political considerations”.  His decision to loan the money to Solyndra was based on information provided to him from experience professions.

MIT name Solyndra as one of the top 50 innovative companies of the times.  The market deteriorated and caused a decline in the market causing the monetary loss in the Clean Energy industry.  The problems may not have happened had the economy not faulted.

During the hearing Secretary Chu was asked if he knew that subordinating the loan was illegal and could not occur.   He informed the committee the General Consul informed him he could subordinate the loan and decided to do that with hopes Solyndra would come out of the financial problems within the company.

This hearing went on for over two hours with both sides asking tough questions to get to the bottom of why this company was given the loan when so much information was out there showing the financial difficulties the company was having.

Rep. Waxman and Rep. DeGette both addressed the Clean Energy race and continually emphasized who important it was we get off the fossil fuels to move toward the clean energy businesses and the Republicans are misrepresenting the problems in this case. Waxman “It’s pretty obvious what’s going on in this hearing room” as he asked the Secretary if the loans were made for political favors to a campaign donor, which Chu denied. Mr. Waxman stated the Republicans and big oil are creating a scandal plain and simple.

Ultimately when asked by Representative John Sullivan (R) Oklahoma if he would guarantee this loan today knowing what he knows now he stated “Certainly knowing what I know now we’d say no”.

Now taxpayers are on the hook for more waste as this loan was pushed through knowing there were huge risks within the company.  Secretary Chu revealed he pushed many loans through quickly knowing the Clean Energy industry was up and coming with many issues unanswered.