CHU INTENTIONALLY SUBORDINATED HALF A BILLION DOLLARS OF TAXPAYERS’ LOAN IN VIOLATION OF THE ENERGY POLICY ACT OF 2005

WASHINGTON, NOV. 17, 2011 – “The American people have the right to know how the Obama Administration risked and lost $535 million in taxpayer funds,” said Rep. Cliff Stearns (R-FL), Chairman of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.  “This hearing shows that Secretary Chu failed to require appropriate oversight over the loan guarantee process, is unaware of the financial condition of the other loan guarantee recipients after two of the first three have filed for bankruptcy, did not seek legal input from the Department of Justice before subordinating taxpayers to two hedge funds, and is unable to identify who at DOE asked Solyndra to withhold announcing impending layoffs until after the November 2, 2010 elections.  The appointment of Herb Allison to review all of the loan guarantees indicates that the President has lost faith in Secretary Chu.  I agree with the point of Dan Carol, an Obama campaign senior advisor, who called on the White House to replace Chu earlier this year in an email.  Chu has failed the test, and in my personal opinion I agree with Mr. Carol that he should be replaced by the President.”

Stearns referred to an August 2009 email by a DOE staff member stating that Solyndra’s financial model showed it running out of cash in September 2011, just when the firm filed for bankruptcy.  Chu responded, “I wasn’t aware of this particular email at the time.”

Regarding the failure of Solyndra and Beacon Power, Stearns asked Chu, “When you have two of the first three loans out of the 1705 program go bankrupt, the question for you is how many loan guarantees that you are involved with and covering and monitoring are going to fail, in your opinion?”  Chu was unable to provide an answer.  He also was unable to even cite loan guarantees that were at high risk.

Although the Obama Administration claims that politics played no role in Solyndra, advisors for Argonaut, Solyndra’s largest investor, discussed with DOE impending layoffs at Solyndra.  The email states that DOE “did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov 3^rd – oddly they didn’t give a reason for that date.”  The mid-term elections were held the previous day.  Chu could not say who at DOE made that request.

Stearns added that the investigation continues, “The White House has continued to stonewall this investigation at every turn, forcing this Committee to issue a subpoena to obtain basic investigative documents. And yet, the White House has still only produced a few selective documents form the West Wing of the White House to the Committee, some of which were heavily redacted, despite the White House Counsel’s office having admitted that this is a legitimate investigation.”