House Investigates Solyndra Crimes

A parade of Treasury Department officials testified on Friday that they had never before seen a government loan restructured as the one with Solyndra had been. The testimony came as the Republican-controlled House investigated whether the Obama administration had committed a crime in its handling of the politically connected solar energy firm.

Months after the Obama administration granted the $535 million loan to the firm with which it had such close ties, it allowed investors who sank in an additional $75 million to recoup their funds before taxpayers in the event of bankruptcy.

On Friday, Gary Burner and Gary Grippo, high-ranking Treasury Department employees, told the House Energy and Commerce oversight subcommittee that never in their memory had private investment funds been prioritized ahead of taxpayer dollars.

There is a good reason for that: House Republicans contend it is illegal. The Energy Policy Act of 2005 clearly states that all government loan guarantees “shall be subject to the condition that the obligation is not subordinate to other financing.”

Prior to the hearings, Rep. Mike Pompeo, R-KS, remarked, “It was very clear that the statute did not permit the administration to allow private citizens to get ahead of taxpayers when they restructured the loan, and they did that.” He added new documents proved the deal was a more prevalent form of crony capitalism than believed. “It looks like, again, folks who were investors in Solyndra — private investors — were working hard inside this administration to get favored deals for Solyndra,” he said.

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The Congressman’s remarks came as news reports show more insiders to have been involved in the failed, government-guaranteed loan. E-mails show Obama adviser David Prend was the first to pressure the administration to provide the loan to Solyndra. The company he co-founded, Rockport Capital, held 7.5 percent of its stock. In addition to Prend, Steve Spinner, who served on Obama’s transition team, pushed for the loan, although his wife was the company’s lawyer. These two join the firm’s most notorious connection: Obama campaign bundler George Kaiser.

Rockport was among the firms that provided the $75 million and which the Obama administration preferred over U.S. taxpayers.

Today’s hearings were not the first to raise the issue of the loan restructuring’s legality. The committee pointed to an August 17 memo written by Assistant Treasury Secretary Mary Miller, which stated that any restructuring plan would have to be run past the Justice Department because it plainly violated the law. “To our knowledge that [review] has never happened,” she wrote.

Two August e-mails Fox Business Network obtained from the Treasury Dept. similarly questioned the propriety of the action. “I think DOE should be thinking through whether the proposed deal is just giving the investors more time to extract more value from the firm before bankruptcy,” one read. Another joked, “I will bet a quarter that the DOE lawyers have some kind of theory on how whatever restructuring they have done and whatever they are considering doing does not violate these [subordination] requirements. Can’t wait to hear it.”

House Democrats predictably returned fire. Congressman Henry Waxman, D-CA, branded the hearings “rigged” and “a kangaroo court.” Congressman John Dingell agreed, “I’ve never seen such a big fuss over such a small thing in all my time in the committee.” However, some on the Left disagree. Even Nation magazine, which called the scandal “overblown,” said the insider lobbying represented “a blatant conflict of interest.”

Yet Energy Department spokesman Damien LaVera stated, “Based on a careful analysis of the terms of the restructuring, the career officials in the DOE loan program determined that the restructuring was legal and that it did not require Justice Department review.”

Waxman entered into the record a memo written by Energy Department Loan Programs Office Chief Counsel Susan Richardson, which concluded the restructuring “will yield the highest probable net benefit to the Federal Government by minimizing the Federal Government’s potential loss on the Guaranteed Loan.” It adds, “Both by reason of its placement within the statutory scheme, and the plain meaning of the words, we read Section 1702(d)(3) as a condition precedent to the issuance of the loan guarantee. We do not believe it can reasonably be read either as a requirement that the guaranteed loan may never be subordinated, or as a restriction on the authority of the Secretary following the issuance of a loan guarantee.” In other words, the subordination section supposedly only applied to the opening of a loan, not any point after the loan guarantee had been made. But the point of the section was to prevent taxpayer exposure, not assure it as the restructuring did.

Obama apparently had a master plan to fund “green energy,” then pass stifling anti-energy measures that would drive up the cost of traditional energy (oil and gas), thereby assuring the alternative energy sector’s success. An e-mail Energy Department adviser Matt Rogers wrote to his colleague Rod O’Connor on May 24, 2010, confided that Solyndra was “counting on an energy bill to pass, including a renewable energy standard to ensure adequate U.S. market size.” (Emphasis added.)

As Chris Stirewalt of Fox News reported, “had he succeeded, higher energy costs and the chance for companies to earn extra credits for the right to use other, more efficient energy sources by buying solar panels would have made Solyndra profitable, however bad its original business plan had been.”

Obama wanted to fundamentally transform America from top-to-bottom, including its energy sector. He chose Solyndra, the investment of a key campaign contributor and several other cronies, as the instrument of our deliverance. This company would be a prime beneficiary of his plan to reduce American consumer strength, his cap-and-trade bill, thus assuring his cronies profitability and the success of this “investment,” albeit at the price of massive cost hikes for most Americans.

When it looked as though the company would not last long enough to see the bill passed, he pumped in another $75 million, placing the American taxpayer at the back of the line to collect. After all, it was a “sure thing,” just as soon as Congressional Democrats passed his bill. When it failed, some pushed for yet another million dollar project from the Navy, hoping to keep the company going for maximum profits.

Obama planned to pass a punishing bill against energy consumers, then force them to underwrite his buddies’ company, which would be hailed as “the wave of the future.” Instead, he has regulated energy just enough to cause prices to “necessarily skyrocket” by one-third over the last year, without any uptick in green energy. His restructuring scheme lost taxpayers half-a-billion dollars and may have broken the law in the process.

We owe the House Republicans our debt of thanks for holding the administration accountable for its actions.