The exterior of solar-panel manufacturer Solyndra is shown in Fremont, Calif. A Republican-led investigation of the federal government's investment in the solar-panel maker concluded that agencies identified a variety of red flags about the soundness of the now-bankrupt manufacturer but allowed the investment in the company to proceed. PAUL SAKUMA/Associated Press file
WASHINGTON - Republicans investigating the government's investment in a bankrupt solar-panel manufacturer have concluded that the Obama administration ignored numerous red flags about the company's financial viability, leaving taxpayers on the hook for more than $500 million.
For months, Republican lawmakers have made the government's loan to California-based Solyndra Inc. the centerpiece of their criticisms of President Barack Obama's $787 billion economic stimulus package. The release of the report Thursday by the House Energy and Commerce Committee gave them another opportunity to reinforce that message.
The White House countered that the report showed that none of the accusations that Republicans had made about political interference in approving the loan turned out to be true. Democrats on the committee also released a memorandum taking issue with the findings.
"The Republican report is partisan and one-sided. It does not substantiate the primary allegation that motivated the committee's Solyndra investigation, which is that the loan guarantee decision was a form of political payoff to a campaign contributor," the Democratic memo said.
Tulsa billionaire George Kaiser, an Obama supporter, invested $400 million in the solar company's parent, 360 Solar Degree Holdings Inc., through an investment vehicle called Argonaut Ventures connected to his charitable organization, the George Kaiser Family Foundation.
Kaiser has said he had no part in helping Solyndra win a government loan.
The Energy and Commerce investigation lasted 18 months. Backers of the loan have said competition from Chinese solar-panel manufacturers was a major factor in Solyndra's failure. The report said White House Office of Management and Budget staff was aware that China's effort to penetrate the U.S. market could hurt Solyndra.
An email from an OMB reviewer in August 2009 said pricing pressures from China "raise concerns about how strong Solyndra's position will be in the face of rising competition."
The reviewer had requested to his supervisor that the Solyndra loan be postponed, the report said.
The committee said federal workers also identified risks when the Energy Department and OMB reviewed a restructuring of the loan in late 2010 and early 2011, but the agencies allowed it to move forward anyway.
Solyndra filed for bankruptcy protection in September. Lawmakers say the government could have saved hundreds of millions of dollars if officials had decided to cut their losses, rather than restructure the loan.
"Solyndra was a mistake that would have been much smaller if, in fact, career professionals had not been overruled," said Rep. Darrell Issa, R-Calif
But the committee's Democratic staff said Republicans were twisting internal debates among reviewers into evidence of mismanagement. In the end, decisions were made based on merit after extensive consideration of the company's prospects, they said.
The Tulsa World Business staff contributed to this story.
Original Print Headline: Report is critical on Solyndra
