Energy loans official leaves in wake of Solyndra

Reuters News
|
Posted: Oct 06, 2011 6:09 PM
Energy loans official leaves in wake of Solyndra

By Ayesha Rascoe and Roberta Rampton

WASHINGTON (Reuters) - The Obama administration said on Thursday its top energy loans official was stepping down, as President Barack Obama defended a clean energy loan program in the wake of the collapse of a solar panel company that got $535 million in federal support.

Jonathan Silver, a venture capitalist who had also worked for the Clinton administration, was leaving because the loan program has allocated all its funding, Energy Secretary Steven Chu said.

Silver's departure, however, comes as Republicans in Congress probe the White House's role in backing government loans given to Solyndra, a California solar panel maker, in 2009.

Solyndra filed for bankruptcy in August, and is also under investigation by the FBI.

Silver joined the department after the loan guarantee was awarded, but he was in charge in February when the government agreed to restructure the debt as the company ran out of cash.

In that restructuring, some $75 million in private investment was ranked ahead of the government in the event of bankruptcy. That private fund was backed by a prominent Obama fundraiser.

OBAMA DEFENDS LOAN PROGRAM

Obama defended the Energy Department's handling of loans to Solyndra, saying the government should not back down from its support for clean energy.

He said the program, which was created by Congress during the George W. Bush administration, was necessary to help the United States remain competitive in the clean energy sector that has become dominated by China and Europe.

"If we are going to be able to compete in the 21st century, then we've got to dominate cutting-edge technologies, we've got to dominate cutting-edge manufacturing," Obama told a news conference.

The fall of one company should not discredit the entire program, Obama said, noting decisions on the loan were made "on merit."

"We knew from the start, it was going to entail some risks," he said. "There were going to be some companies that did not work out. Solyndra was one of them."

Obama said the United States cannot afford to back down from supporting clean energy, when China and other countries are strongly backing alternative energy.

"I'm not going to cave to the competition when they are heavily subsidizing all these industries," Obama said.

(Editing by Doina Chiacu and Vicki Allen)