The White House is bracing for criticism. Solyndra, a California-based Silicon Valley company which had hoped to take advantage of a new and developing market for solar panels, is now declaring bankruptcy. Solyndra sought and received a loan guarantee of $500 million from the Department of Energy loan office, in collaboration with the White House budget office. The application came from Solyndra late in the administration of George W. Bush, and received final approval in the spring of 2009, the first year of Barack Obama’s term. Solyndra, which sustains relatively high production costs, failed to foresee that Chinese companies would flood the market, and that such competition would lower the price of solar equipment. An additional factor in the company’s failure was diminishing demand for solar panels in Europe.
Those who criticize the failed loan blame the White House, and suggest that the approval was hastened to provide an opportunity for Vice President Joe Biden to announce the loan’s approval at a publicized groundbreaking two years ago. The government agencies involved have defended their decisions, saying the application was carefully reviewed, and the loan approval was not politically motivated. The White House was spotlighting clean technology when the loan was approved, and had praised Solyndra and a total of 22 specific companies, many of which the president had personally visited.
Critics of the president point to emails in August of 2009. At that time, the Department of Energy (DOE) had tentatively approved the loan, but was awaiting a final financial review by the Office of Management and Budget (OMB). The emails show White House officials asking for a firm date when the final decision might be made. The OMB complained they were being rushed and needed adequate time to assess the risk. One email from an OMB official states that that office needed “time to negotiate.” A spokesman for the White House, Eric Schultz, said, “There was interest in when a decision would be made because of its impact on whether an event involving the vice president could be scheduled for a particular date or not, but the loan guarantee decision was merit-based and made by career staffers at DOE.”
Obama’s Department of Energy has repeatedly asserted that Solyndra was well on its way to receiving the loan during the final years of the G.W. Bush administration. Jonathan Silver, the executive director of energy loan programs said, “In fact, by the time the Obama administration took office in late January 2009, the loan program’s staff had already established a goal of, and timeline for, issuing the company a conditional loan guarantee commitment in March 2009.” The stimulus package had just passed Congress, and this loan was the first of many guaranteed by the DOE under a program created by a 2005 energy law.
However, Rep. Cliff Stearns (R-FL), chairman of the Energy and Commerce Subcommittee on Oversight and Investigations, said Silver was wrong to call the loan “a train about to leave the station” when Obama took office. Stearns insisted, “Only after the Obama administration took control, and the stimulus passed, was the Solyndra deal pushed through.”
Jeffrey D. Zients, deputy director for management at the White House budget office, said that during the Bush and Obama administrations, 36 loan applications had been considered, not only for solar projects, but also for wind and geothermal energy harnessing firms. The evaluation of these loans is ongoing and Zients concluded, “We have reason to be optimistic that the portfolio as a whole will perform.”Powered by Sidelines