Saturday, October 29, 2011

White House to review energy loan programs as subpoena looms

By Ben Geman and Andrew Restuccia

The White House announced Friday that it has ordered an “independent analysis” of Energy Department loan programs following the collapse of Solyndra, the solar panel company that went bankrupt last month after receiving a $535 million loan guarantee in 2009.
The announcement came on the same day that Republicans in the House scheduled a Thursday vote to subpoena the administration for documents on the Solyndra loan.
The administration’s 60-day review will evaluate the department’s multibillion-dollar loan portfolio and make recommendations about improving the monitoring process, according to the White House.
White House Chief of Staff Bill Daley ordered the analysis, which will be led by Herb Allison, a former Treasury Department official who oversaw the Troubled Asset Relief Program.
“The president is committed to investing in clean energy because he understands that the jobs developing and manufacturing these technologies will either be created here or in other countries. And while we continue to take steps to make sure the United States remains competitive in the 21st-century energy economy, we must also ensure that we are strong stewards of taxpayer dollars,” Daley said in a statement Friday.
Allison's review is also aimed at establishing an "early-warning system to identify potential concerns," according to the White House.
The move follows strong criticism from Republicans of the administration’s handling of the Solyndra financing.
Republicans on a subpanel of the House Energy and Commerce Committee will hold a vote next week on a subpoena resolution for Solyndra documents.
The White House has rejected Republicans’ request for all internal communications related to the solar firm and noted that more 70,000 pages of documents have already been provided.
“Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration’s stonewall on Solyndra,” Rep. Cliff Stearns (R-Fla.), chairman of the Oversight and Investigations Subcommittee, said in a statement. “What is the White House trying to hide from the American public?”
If Republicans approve the resolution next week, it would mark the second time that the committee has subpoenaed the Obama administration for Solyndra documents.

Solyndra is under investigation by the FBI and the Energy Department’s inspector general.
The Treasury Department’s inspector general is also investigating Solyndra, according to multiple press accounts. Treasury’s Federal Financing Bank provided the loan that the Energy Department was guaranteeing.

Republicans have pounced on Solyndra’s struggles and eventual failure, putting the White House on defense politically as administration officials seek to defend their actions on Solyndra and beat back criticism of their energy programs.
While Obama administration critics have attacked the Energy Department’s oversight of the loan programs, Energy Secretary Steven Chu said he welcomed the review.
He pledged cooperation, noting he has directed staff to “make sure that the Department provides all necessary assistance and information to Mr. Allison that the review is as thorough and productive as possible.
“I look forward to working with Mr. Allison as he conducts his review and recommends further steps to ensure that the Department is protecting the interests of taxpayers,” Chu said.
The Energy Department’s green energy loan guarantee program was established under a 2005 energy law. Additional funding for renewable energy loan guarantees was approved in the 2009 stimulus law.
The stimulus-backed program — which also covered electric transmission and advanced biofuels projects — ended on Sept. 30.
The department approved $4.7 billion in loan guarantees for four solar projects the day before the renewable energy program expired. Republicans allege the Energy Department rushed the final approval of the loan guarantees in order to meet the Sept. 30 deadline.
Energy Department officials insist they subjected every loan guarantee to a stringent review process.
The Energy Department also has a separate direct loan program for automakers and suppliers to help spur advanced technology vehicles. That program was authorized in a 2007 law.
Overall, the Energy Department’s loan programs have finalized loans and loan guarantees for 33 projects, totaling about $35.5 billion.
While the loan programs were authorized under the Bush administration, the programs were slow to get off the ground, and no financing deals were closed until the Obama administration took over.
Chu made finalizing loans a priority, but now faces criticism over the vetting of the projects in the wake of Solyndra’s collapse. He defended the Energy programs on Friday, saying they’ve created thousands of jobs.
“Our loan programs are putting thousands of Americans to work and helping our country compete in the global race for the clean energy jobs of the future. We are committed to aggressively competing for those jobs and industries, while also being responsible stewards of taxpayer dollars,” he said.
The White House said that Allison, who left Treasury in September of 2010, will be permitted to bring in a team of outside experts for the project.
Allison also served in the George W. Bush administration as president of Fannie Mae after it went into conservatorship in September of 2008, and was tapped by President Obama in 2009 to become Treasury’s assistant secretary of Treasury for financial stability, a role he held until September of 2010.
He is also a former president of Merrill Lynch.

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