Chu: Solyndra loan approval not political
BY JIM MYERS World Washington Bureau
Friday, November 18, 2011
11/18/11 at 7:38 AM
Read previous stories about Solyndra and review documents.
WASHINGTON - U.S. Energy Secretary Steven Chu on Thursday denied his agency cut corners to rush through a half-billion-dollar loan to a now-failed solar panel maker and disputed Republican efforts to cast it as a political favor.
Testifying under oath during an hours-long hearing, Chu explained he "now'' knows who Tulsa businessman and philanthropist George Kaiser is.
"Not at the time of the valuation of the loan. Not at the time of the restructuring,'' he said.
"I know now what his connection, what his role has been.''
Kaiser was a fundraiser for President Barack Obama and an equity group associated with his family foundation is a major investor in Solyndra, a California-based solar panel manufacturer that received the loan only to declare bankruptcy later.
Rep. Joe Barton, R-Texas, accepted Chu's explanation concerning his knowledge of Kaiser's activities and that the Tulsan never asked him about the loan program.
"I absolutely believe that,'' Barton said.
"But it's the elephant in the room. Everybody and their dog at DOE (the Department of Energy) knew who he was and knew what he was involved in.''
At various times during the nine-month Solyndra loan investigation by a subcommittee of the House and Energy Committee, Republicans have tried to use Kaiser's fundraising for Obama and the equity group's investment in the solar panel company to turn the loan into a political scandal.
Even while he repeatedly dodged Republicans' calls for him to apologize for what they view as a debacle, Chu, a Nobel winner in physics, never wavered as he took responsibility for approving the Solyndra loan and others in the program.
"I want to be clear. Over the course of Solyndra's loan guarantee, I did not make any decision based on political considerations,'' he said.
During his time to question Chu, Oklahoma Republican Rep. John Sullivan asked him to identify who pressured him or his agency to delay Solyndra's announcement of layoffs until after the 2010 election.
"I was not part of that decision,'' Chu responded. "I certainly would not have been in favor of that decision.''
Sullivan also accepted Chu's explanation but went on to charge that delay was done for political purposes.
"No, I don't think it is a proper way to do business,'' Chu agreed.
Sullivan also questioned Chu about pressure coming from the White House to get the loans approved quickly without the proper due diligence.
Chu again denied such activity occurred.
"We never cut corners in doing the proper due diligence,'' he said.
Replying to questions from Sullivan on the lack of information on projected sales, administrative expenses and net profits, Chu explained business plans of new firms often include losses as they build factories and sales.
Solyndra, he said, expected to be in the red until sometime this year.
Chu reminded Sullivan that many savvy investors came up with nearly $1 billion before the federal government even looked at Solyndra.
He blamed Solyndra's problems on China's aggressive investment in the solar cell industry, market changes in Europe and an acute drop in prices for the firm's products.
Democrats on the panel said Chu's comments should put to rest the Republican efforts to turn Solyndra into a political scandal for the Obama administration.
Rep. Henry Waxman, D-Calif., urged Republicans to stop dancing on Solyndra's grave.
In addition to the issue of delaying the layoff announcement by Solyndra until after the 2010 elections, however, the other issue expected to continue to be pushed by some concerns the decision by Chu to restructure the firm's loan and allow the debt owed to the government to be subordinate to the emergency financing supplied by the firm's investors.
Republicans believe Chu's actions violate a federal law that, they say, bans such subordination.
They repeatedly pressed him on that issue and his decision not to go to the U.S. Department of Justice for a legal opinion.
Chu again defended his decision, saying restructuring the loan at the time was viewed as the best option for getting the government loan paid off.
"Immediate bankruptcy meant a 100 percent default with an unfinished plant as collateral,'' he said.
Shortly after ending his appearance before the House subcommittee, Chu's office announced his plans to visit a solar facility near Denver on Friday to highlight the choice the nation faces in competing for clean energy jobs.
Original Print Headline: Chu denies Kaiser had effect on
Jim Myers 202-484-1424
Steven Chu: The U.S. energy secretary said the decision to approve the Solyndra loan was not based on political considerations.