ADMINISTRATION WITNESSES CLAIM ALL DUE DILIGENCE APPLIED TO SOLYNDRA LOAN – CAN’T ANSWER WHAT WENT WRONG

WASHINGTON, SEPT. 14, 2011 – “Solyndra was the first loan guarantee issued by the Obama Administration using stimulus dollars and Administration officials held out the company as a glowing example of how stimulus dollars were creating jobs – now 1100 Solyndra workers are out of work, the firm is bankrupt and raided by the FBI, and taxpayers are likely out $535 million,” said Rep. Cliff Stearns (R-FL), Chairman of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

The investigation into Solyndra discovered that the rush to spend stimulus dollars undermined the quality and depth of the reviews by the Department of Energy (DOE) and the Office of Management and Budget (OMB).  Stearns cited an email from a senior OMB official to Vice President Biden’s office, “We have ended up with a situation of having to do rushed approvals on a couple of occasions…we would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around.”  Added Stearns, “The review process took a back seat to the need to set up a photo-op for the Vice President and other Administration officials.”

The Administration witnesses, Jeffrey Zients, Deputy Director of OMB; and Jonathan Silver, Executive Director, DOE Loans Programs Office; testified that all due diligence was applied in approving the loan.  Incredulous that this due diligence failed to prevent the loan guarantee, Stearns asked, “There are two different types of due diligence is what you’re saying?”  Silver responded, “Exactly.”

In order to attract more capital, the Administration restructured the loan and put the private investors ahead of taxpayers in recovering any funds in case of Solyndra’s failure, a violation of federal law and Congress’ specific intent.   Zients testified on this restructuring, “DOE ultimately provided information and analysis to OMB to show that the loan was in imminent default, and that the restructuring proposal was expected to be less costly to taxpayers than other options, including liquidation.”  In addition, it was learned that the Administration was considering another loan restructuring in August. 

“It is clear that in a rush to spend $8 billion in stimulus funds for this loan guarantee program, this Administration failed to review properly Solyndra’s viability in the global market, which is very disconcerting given that $10 billion remains to be spent by the Administration before the end of this month,” stated Stearns.  “I see no reason for the taxpayers to have any confidence that these funds could be spent wisely and it should be returned to the Treasury to reduce our debt.  Finally, I look forward to hearing from the Solyndra executives at our hearing next week.”