White House fights subpoena

By Alex Anastasio

On November 4, the White House counsel issued a statement in which the White House refused to comply with a recent subpoena by the House Energy Committee over the now-bankrupt company Solyndra. In her response to the subpoena, White House counsel Kathryn Ruemmler argued that the subpoena was overbroad, but did not say that the White House would refuse a more limited request for documents.

Energy Secretary Steven Chu testified before the House Energy Committee, where he denied accusations of incompetence and corruption. Chu refused to apologize for the loan, arguing that Solyndra’s bankruptcy was “unfortunate” but a result of unanticipated factors. Chu also stated that he did not foresee that much of the loan could be recovered.

Several members of the Committee have accused the White House and the Department of Energy of rushing reviews of Solyndra’s financial stability. Some Republicans and Democrats have also questioned whether Solyndra officials concealed the deteriorating state of the company’s finances. As recently as the summer of 2011, Solyndra representatives publically reassured members of Congress that the company was financially stable. Released records show that in January 2011, Solyndra informed the DOE that the company was in financial trouble.

On September 23, Solyndra executives previously invoked their Fifth Amendment rights and refused to testify before the House Energy Committee. Questioning became so intense that at least one member of the Committee complained. On September 8, FBI agents raided Solyndra’s offices, just a week after Solyndra filed for bankruptcy. Several e-mails released by the House Energy Committee indicate that Solyndra and its private investors aggressively sought funds from the DOE, eventually procuring a deal in which private companies invested more money in Solyndra in exchange for priority repayment of their loans in the event Solyndra went bankrupt.

The DOE loan program in question was created by the Energy Policy Act of 2005. The loan guarantees were created in order to assist companies developing jobs in the clean energy market. The loan program was expanded by the 2009 stimulus act. It was under a 2009 provision that Solyndra received more than half a billion dollars in loan guarantees. Vice President Biden announced the approval of the Solyndra loan, and President Obama once visited the factory itself.

Solyndra, which filed for bankruptcy on September 1 of this year, was a manufacturer of thin-film solar panels. These panels, which are different from conventional flat solar panels, became unprofitable to manufacture due to increased production efficiency on the part of flat-panel producers. Solyndra manufactured the panels at an advanced facility, the construction of which was financed with $535 million in federal loan guarantees, along with nearly $200 million in private capital. In 2009, Solyndra estimated that the construction of the advanced facility would employ approximately 3000 people and that operation of the facility would create over 1000 jobs in the US. Over 1100 people were laid off when Solyndra filed for bankruptcy.

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