President Barack Obama likes to brag that his energy secretary, Steven Chu, won a Nobel Prize in physics. You would think that means that Chu is a brainiac who makes shrewd decisions and is extremely aware of whatever is happening around him. But as his testimony before the House Energy and Commerce Oversight and Investigations Subcommittee on Thursday revealed, there's a world of information that escapes Chu's notice.
The subcommittee is investigating Chu's decision to make Fremont, Calif., solar power company Solyndra the first recipient of a federal energy program loan in September 2009. Two years and $528 million later, Solyndra filed for bankruptcy, and it looks as if taxpayers will not see a dime of it. The Nobel Prize winner's pet pick was a bust.
Thursday was supposed to be Chu's moment to take responsibility for this high-profile bad "bet" -- as Obama once put it. Chu did say, "The final decisions on Solyndra were mine." Yet by the end of the hearing, Chu was using the passive voice and putting the onus on other people. As he looked back at the whole thing, Chu said that "competent decisions were made by the people in the loan program," that green energy is important and that everyone knew "there were risks."
If the White House was pushing for the Solyndra deal because Obama campaign contribution bundler and frequent White House visitor George Kaiser owned an equity firm that backed Solyndra, it was news to Chu. Ditto on communications between Solyndra backers and top White House operatives. Who knew?
The Nobel laureate was "not aware" of staffers' predictions that Solyndra would go broke, even run out of cash in September 2011.
In September 2009, Chu approved the Solyndra loan. He clearly missed the Office of Management and Budget staff's recommendation that the deal be "notched down" in light of "the weakening world market prices for solar generally." When he showed up at Solyndra's groundbreaking, Chu announced, "If you build a better solar panel, the world will beat a path to your door."
As Rick Perry would say, "oops."
In March 2010, PricewaterhouseCoopers warned that Solyndra's recurring losses and negative cash flows raised "substantial doubt about (its) ability to continue as a going concern."
And still, Chu was a booster. In May 2010, Obama appeared at a Solyndra event, chatting up Chu's Nobel history and proclaiming, "The true engine of economic growth will always be companies like Solyndra."
A month later, Solyndra canceled a planned $300 million public offering.
This might be a good place to mention that shortly after winning its first loan guarantee, Solyndra applied for a second, this one for $400 million. To its credit, the administration did not approve the loan.
By October, CEO Brian Harrison had informed the Energy Department that the company was about to lay off workers. According to an email from Kaiser's investment fund, "the DOE ... requested a delay until after the election (without mentioning the election)."
Voila. Solyndra announced it would shutter one of its plants and lay off 40 workers Nov. 3, the day after the election. Chu testified he would not have approved such a political request.
Now Chu admits he approved a deal that allowed investors to put $75 million into Solyndra in order to give the company a chance to survive. He acknowledged that the second deal included a sweetener that put investors ahead of taxpayers in the payback line that follows bankruptcy.
Sadly, when that expensive (for taxpayers) gambit failed, Solyndra laid off 1,000 workers.
Chu rejected the notion that incompetence and politics may have been factors in this half-billion-dollar blunder. "It's extremely unfortunate what happened," said Chu, "but the bottom fell out of the market; it was totally unexpected."
Rep. Henry Waxman, D-Calif., came to Chu's defense. "We have lost the money," he announced. "It's unfortunate, but there's no scandal there."
No scandal? In February 2009, former Solyndra CEO Chris Gronet was so sure he'd get the loan that he set 10 conditions for the administration to meet to help him raise another $147 million. No. 9: "Fundraising support after conditional commitment: Steven Chu visits Solyndra with press interviews (target by end of March)."
Just who worked for whom?
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