My colleague Erika Johnsen was at yesterday's marathon hearing, so stay tuned for her full recap, but I figured I'd provide a quick video primer in the meantime. In short: Under tough Republican questioning, Energy Secretary Steven Chu testified that he was unaware of any troubling signs about the Solyndra loan until it was too late, dismissed allegations that subordinating taxpayers in favor of private investors during the infamous Solyndra sweetheart restructuring was illegal, and denied any political influence at any stage of the approval process. These claims range from suspicious to preposterous. We'll get into the middle point later, but consider the following evidence: The warning bells sounding over the efficacy and stability of Solyndra's business model grew louder at every step of the process. And political fingerprints were all over this project from the get-go; from the desire to make Solyndra the "poster child" of the president's "green energy" agenda, to his ill-fated visit to the company's headquarters, to Solyndra's high-priced political lobbying efforts, to the 2010 election/layoffs maneuver. Here's House Energy and Commerce Oversight Subcommittee Chairman Cliff Stearns (R-FL) recapping all of the emails, warnings, assessments, and red flags of which Chu now insists he was unaware:
A few examples. (1) Chu said he just recently became aware of the pressure that was brought to bear on Solyndra to delay its layoffs notification until after the 2010 election. As you watch this, remember that the Washington Post reported that several high-ranking Obama officials were involved in the decision, and that an investor email revealed that the announcement delay occurred at the behest of...Secretary Chu's Department of Energy:
(2) Chu was forced to admit that taxpayers won't recover "very much" money from the Solyndra bankruptcy:
Well, yeah. The administration restructured the loan (on which Solyndra had already defaulted) in such a way that private investors (ie, Obama donor George Kaiser, Inc.) would recoup the first $75 million, subordinating taxpayers. More on that in a moment. The Energy Secretary was repeatedly badgered about why, after becoming fully and directly aware of Solyndra's red-stained, irredeemable balance sheet, he signed off on a loan restructure that continued to pour cash into the failing company. Chu's response: Solyndra was in the middle of building a factory at the time, so he thought it would be best to just let them finish building it. His argument was that even though the company was failing terribly, completing the facility at least gave them some scarcely detectable glimmer of hope to recover. How'd that work out? Not to worry, though, he assured lawmakers that he made all of these decisions with taxpayers' best interests at heart -- which apparently involved not saving us $168 million by cutting Solyndra loose when he had the chance earlier this year. Terrific.
(3) Much of the questioning yesterday dealt with the taxpayer subordination issue because current federal law states that taxpayers "shall not" be passed over by other entities, investors, etc. in these situations. When Chu green-lit the dubious restructuring terms, the Treasury Department recommended that DOE refer the legality question to the Justice Department. Chu said that they chose not to do so. His argument was that the law didn't really mean what it says, which perturbed even some Democtrats:
One of the most aggressive lines of questioning Chu has received came from, surprisingly, a Democrat. Rep. Gene Green (D-Tex.) tore into Chu over the fact that the Energy Department restructured Solyndra’s loan guarantee so that the newer outside investors who were pouring additional money in would get repaid before taxpayers if the company went bankrupt. Green says that Congress never intended that to happen when it passed the loan-guarantee program back in 2005. Rep. Michael Burgess (R-Tex.) cites Green and argues that the Energy Department violated the 2005 Energy Policy Act. “We believe there was no violation of the law,” says Chu. “That seems like a tortured legal reading of a fairly straightforward law,” retorts Burgess.
Chu also wouldn't say whether he notified the DOJ after Solyndra defaulted on its first set of loan conditions, which would have been required by law. But remember, folks, he works for the most transparent administration evah!
(4) Any apologies for this epic $535 million mess? Nah:
It's "extremely unfortunate" what "has happened" to Solyndra, you see, but that ought not involve any personal accoutability from the guy who approved, then re-approved the loan, even in the face of mounting evidence that it would meet a nightmarish demise. Note well the passive voice he employed. It's like this fate somehow just befell the poor company -- and it's impossible to say who's to blame, really. Which brings us to the Democrats on the panel. With rare exceptions, like the aforementioned Gene Green, they behaved atrociously. Most suggested that there was nothing to see here, and accused Republicans of embarking on a partisan witch hunt. (Again, I guess all that money just vanished on its own, and no one could have prevented it). Rep. Jan Schakowsky of Illinois, though, used her question period to insinuate that if there was a scandal here, it was Bush's fault. Her argument went like this: The loan program and the Solyndra loan itself was originally conceived during the previous administration, so the Obama administration was merely continuing existing policy. There's just one little problem with that lovely blame-shifting narrative:
The results of the Congressional probe shared Tuesday with ABC News show that less than two weeks before President Bush left office, on January 9, 2009, the Energy Department's credit committee had voted against offering a loan commitment to Solyndra. Even after Obama took office on Jan. 20, 2009, analysts in the Energy Department and in the Office of Management and Budget were repeatedly questioning the wisdom of the loan. In one exchange, an Energy official wrote of "a major outstanding issue" -- namely, that Solyndra's numbers showed it would run out of cash in September 2011. There was also concern about the high-risk nature of the project. Internally, the Office of Management and Budget wrote that "the risk rating for the project sponsor [Solyndra] … seems high." Outside analysts had warned for months that the company might not be a sound investment.
That's right, the Bush-era credit committee unanimously voted against offering the loan commitment to Solyndra. Obama's crew fast-tracked it, over numerous internal warnings that it would end disastrously -- none of which Secretary Chu claims to have seen. Remarkably clueless for a Nobel Laureate, don't you think? To help illustrate how insufferable many subcommittee Democrats were throughout the hearing, I'll leave you with this performance from Henry Waxman. Try to remember that the questions were supposed to be about Solyndra:
Republicans won't accept that "climate is occurring"? Boy, they really are deniers!
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