As Obama administration officials pondered restructuring a government-backed loan for the struggling solar-panel manufacturer Solyndra in late 2010, a White House budget analyst cautioned that an Energy Department plan could potentially cost taxpayers an additional $240 million more than if it allowed the firm to collapse.
The details in the ongoing partisan fight over the Energy Department's loan-guarantee program emerged in a new report released Thursday by the House Republicans investigating the collapse of Solyndra, a clean-energy company.
Kelly Colyar, an analyst at the Office of Management and Budget (OMB), wrote that the U.S. could lose about $141 million if Solyndra shut its doors in January 2011, as the company was on the precipice of collapsing, according to administration e-mails published in the report.
If the Energy Department went ahead with a plan to restructure Solyndra's $535 million loan guarantee, taxpayer exposure would grow to $385million, according to Colyar. As part of the restructuring, private investors were put ahead of taxpayers for repayment if the firm eventually shuttered. The restructuring was approved, and Solyndra collapsed in September 2011.
"Our investigation revealed a shocking episode where politics were put before taxpayers and integrity was sacrificed for the sake of corporate favoritism," said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.
Colyar's OMB colleagues shared her concerns, the report says. On Dec. 15, 2010, OMB official Kevin Carroll notified his superior, Richard Mertens, deputy associate director of natural resources programs, in an e-mail of the plan to restructure the loan and questioned whether it was consistent with the Energy Policy Act, which established the guaranteed-loan program.
Jack Lew, who was OMB's director and is now White House chief of staff, knew about the concerns of the staff but didn't intervene, the report says. Instead, he let Energy officials determine whether to go forward.
Much of the 147-page report is a rehash of the GOP's criticism throughout its investigation. including charges that the administration fast-tracked approval of Solyndra for political reasons and the Energy Department failed to anticipate market challenges. The foundation of Obama fundraiser George Kaiser was one of the investors.
Americans for Prosperity, a conservative group, has poured millions into ads hammering Obama for the Solyndra debacle, and likely GOP presidential nominee Mitt Romney has criticized him for directing the loan guarantee toward a political backer. Thursday's report, like the committee's previous reports, did not establish that Kaiser used his influence to help Solyndra win administration backing.
White House spokesman Eric Schultz reiterated the administration's position that the decision to back Solyndra was based on merit.
"This is month 18 of this congressional investigation," he said, "and everything disclosed ... affirms what we said on day one: This was a merit-based decision As Republicans won't answer how much the investigation has cost taxpayers, we believe they should instead be focused on legislation to create jobs and grow the economy."
