The White House and Department of Energy appear to have broken the law in rushing though a taxpayer-guaranteed loan for the now-defunct Solyndra Inc., according to the chairman of the House Oversight and Investigations Subcommittee.
Speaking in an exclusive interview with Newsmax.TV on Thursday, Rep. Cliff Stearns, R-Fla., said it appears that officials violated the Energy Policy Act of 2005 with respect to the $535 million DOE loan guarantee to the California-based Solyndra.
“The administration, Department of Energy, I think broke the law. And so we have lots of questions,” says Stearns, whose subcommittee issued an extraordinary subpoena seeking internal White House communications relating to the Solyndra loan guarantee on Thursday. Solyndra went bankrupt in September and its offices were raided by the FBI two days later.
That led to an investigation by Stearns’ subcommittee, which issued an initial subpoena for communications between the Office of Management and Budget and DOE back in July.
“We started investigating this and we found that there were a lot of emails, disturbingly between the White House and a lot of the wealthy donors who invested in both Obama when he was running for president but also in some of these loan guarantee investments and they had access to the White House,” Stearns tells Newsmax.TV.
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Thursday’s vote to issue a subpoena was split along party lines. “All of the Democrats voted against it just like they voted against the July 15 subpoena,” says Stearns. “And as it turns out, I think there’s lots of concern I think from taxpayers because they’re going to lose all of this money. It’s over half a billion dollars.”
Information contained in nearly 1,200 pages of documents released by the government Wednesday revealed that days before the solar panel maker collapsed, the Obama administration considered a bailout that would have provided an infusion of cash and a new board of directors, including two directors appointed by the Energy Department.
Officials subsequently rejected the bailout plan, which was recommended in August by the investment banking firm Lazard Ltd. Lazard was paid $1 million for analyzing options related to the faltering company.
Stearns said that Democrats were quick to label the first subpoena request a witch hunt with no value.
“They were all against it. But as it turned out, they now realize that their vote was wrong and they should have supported it because we found lots of information, and particularly we found out that the administration and Department of Energy subordinated taxpayers’ loan money to two hedge funds controlled by some investors of the Obama campaign.”
Congressional Republicans have been investigating Solyndra’s bankruptcy amid embarrassing revelations that federal officials were warned it had problems but nonetheless continued to support it, and sent President Barack Obama to visit the company and praise it publicly.
“Both the president and the vice president indicated they thought this would be the way for America to transition out of fossil fuel into alternative energy. So they touted this one a great deal,” explains Stearns.
Asked whether he believes Energy Secretary Steven Chu broke the law, Stearns said the subcommittee will have some tough questions for Chu at a hearing on Nov. 17.
“We’ll put him under oath and ask him to explain how he could justify subordinating taxpayers’ loan which to me is against the law,” said Stearns.
He said that his subcommittee wants to know why Chu apparently ignored red flags in the case of Solyndra.
“We’re trying to understand how high it went up and what was the impact, particularly in light of the fact that two years ago the Department of Energy indicated – they prophesized that Solyndra would go bankrupt in September 2011,” says Stearns. “So you had that prophesy come true and yet the administration kept pushing this. Why were they pushing this?”
Stearns says that the subcommittee will also ask Chu about other loan guarantees through DOE. “What does he feel about the rest of the loan guarantees? And what is he doing with due diligence to be sure that the taxpayers don’t lose any more money? Because out of the three initial loan guarantees, two of them are now in bankruptcy.”
In all, Stearns said, about 35 companies obtained loans through the program, including one that used much of the money to manufacture solar panels in Mexico. “It’s questionable how many jobs they’re going to develop here in the United States which was the original mission of the president,” according to Stearns. “So when he (Obama) says we’re going to win some, lose some, I think he now realizes that was a mistake because now he’s asking his new commissioner to look at all of the loan guarantees because he’s worried now it’s become a political issue.”
Stearns acknowledges that Obama may be insensitive to the value of so much tax money. “I think the background of the president is such that he doesn’t quite understand what a half billion dollars is.”
Stearns says that a larger question is whether the United States can effectively compete against countries such as China in manufacturing solar panels and wind turbines. “They have access to raw materials, but more importantly they have access to very cheap labor and including the communist government buys the land, gives it to them free,” he said.
“So is that the best model for us to compete? Or would we be better off to find something in nanotechnology dealing with NASA aerospace technology where we really have trump in terms of technology like Apple and so forth and software computers?”