GOP Questions Chu's Competence As Energy Secretary

By Adrianna McGinley

Energy Secretary Steven Chu emphatically denied any wrong doing on his part or that of his Department in the decision to provide the now bankrupt solar energy company Solyndra with a $535 million government loan guarantee in 2009.

Members of the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations rigorously questioned Secretary Chu about what he knew regarding the decision to move forward with the loan and when he knew it. Republican members referenced numerous emails they said clearly showed the eminent failure of the company.

Chu denied having any knowledge of the emails at the time the loan was approved and said given the information that was available at that time “competent decisions were made”.

Chu attributes the failure of the company not to bad decisions, rather to an unforeseeable economic downfall spurred by rising competition and government support in China to further solar energy development. Chu added that the U.S. must be willing to take risky decisions and make risky investments in order to support a sustainable future and create jobs.

“There’s a heavy expectation in the business world that these technologies will become competitive without subsidy in a relatively short period of time,” Chu said. “The whole issue is…do we want to be buyers or sellers?”

GOP members also grilled Chu on whether or not he was aware of any communication between the White House and the DOE regarding the decision to restructure the loan and the decision to delay the announcement of Solyndra layoffs and looming financial default until after the 2010 midterm elections.

Chu emphatically denied any pressure or influence from the administration on these issues, saying “I’m not sure what communications there were between DOE and the White House, but certainly we did not communicate with the White House on whether we should approve the loan…that was our responsibility.”

Chu also denied White House pressure to restructure the loan in February 2011, adding that the decision was a difficult one.

“We either had to stop the loan, which would have made Solyndra go into immediate bankruptcy with a half completed factory, or we could say we can continue on the contract of the loan, which was to build this factory,” Chu said. “Once the factory was complete Solyndra would have a fighting chance of continuing or it could offer that factory sale as a whole unit.”

“We were always focused on that path that could get as much taxpayer recovery as possible,” Chu emphasized.

Chu added these loans are inevitably risky in nature and the legislation of the entire DOE loan program reflects that. Chu said the legislation passed by Congress includes $10 billion budgeted for losses, but when asked how much of the lost tax payer money would be recovered, he said “not very much.”

Members on both sides of the aisle also questioned the legality under the 2005 Energy Policy Act of the decision to subordinate tax payer recovery for corporate interests during the process of restructuring. GOP members maintained Chu broke the law in making that decision, sparking several members to question whether Chu is competent as energy secretary and whether resignation should be considered.

“Have you discussed with your boss whether or not you should continue in your position having violated the spirit of the Energy Policy Act of 2005?” Rep. Michael Burgess (R-Texas) questioned.

Chu responded, “we believe there was no violation of the law.”

Solyndra Executives Provide No Answers

By Adrianna McGinley

Top Solyndra Inc. executives invoked their Fifth Amendment rights and declined to answer any questions presented to them at a House Committee hearing Friday.

Solyndra CEO Brian Harrison and CFO Bill Stover were scheduled to testify September 14 at a House Energy and Commerce Committee hearing investigating the over $500 million loan guarantee the company was awarded in 2009, but requested to postpone their appearance one week. According to the Subcommittee on Oversight and Investigations Chairman Cliff Stearns (R-Fla.), the duo requested postponement because they were in active negotiations to sell the bankrupt company, in an attempt to lessen the consequences taxpayers would face.

The committee accepted the request with the condition that the two would answer questions at Friday’s hearing. Stearns said he received written assurance that Harrison would in fact answer questions, only to receive later notice that the two would voluntarily appear, but would plead the Fifth.

The Solyndra investigation has become a source of heated partisan debate, but one point on which there was agreement was the disappointment of not receiving answers from the executives.

“It is a very sad commentary that we met resistance every step of the way as this subcommittee has tried to seek answers to basic questions overseeing the approval process of this project,” said Committee Chairman Fred Upton (R-Mich.). “We finally had to resort to a subpoena and now the outright resistance of getting answers that both of you, our two witnesses, assured us only last week that you would provide. Let me just warn you and the other folks involved in this taxpayer rip off, we’re not done.”

Members of the committee presented dozens of questions to the witnesses, all of which were answered, “On the advice of my council, I invoke the privilege afforded to me by the Fifth Amendment of the U.S. Constitution, and I respectfully decline to answer any questions.”

After receiving no satisfactory answers, the committee dismissed the witnesses but made it clear that the investigation would continue.

Rep. Henry Waxman (D-Calif.) recommended that the next step in the investigation be to question private venture capitalists who invested over a billion dollars in Solyndra, including Argonaut Private Equity and Madrone Capital Partners.