Treasury Department review of Solyndra loan was rushed, report says
Energy Department didn't involve Treasury Department until loan to now-bankrupt company was largely finalized, report says - Hurried process may have left some concerns unaddressed, audit finds
The Energy Department kept Treasury Department officials in the dark until late in the government's review of the $535 million loan to now-bankrupt solar panel maker Solyndra, triggering a rushed consultation that may have left concerns unresolved, a new audit released Wednesday found.
The audit by the Treasury Department’s inspector general found that Treasury officials had raised serious concerns about the terms of the loan, but there was no documentation of whether they were addressed. The report’s findings of hurried reviews and ignored warning signs echo previous iWatch News reporting on Solyndra.
The loan, originally touted as a model of President Obama’s green energy program, has become a political weapon. “The Treasury report echoes what our investigation has shown over and over; Solyndra was a bad bet from the beginning that was rushed out the door while every red flag was ignored,” Republican Reps. Fred Upton and Cliff Stearns said in a statement Wednesday.
Though the Energy Department arranged the loan, it was actually processed by the Federal Financing Bank, a government lending institution under Treasury’s control. The newly released audit found that Treasury was not involved in the process until the loan negotiations were largely complete.
Treasury officials raised concerns about the terms of the loan, including the fact that it included a 100 percent guarantee, rather than a partial guarantee, auditors found. After a conference call with Energy Department officials, one Treasury official wrote, in an email uncovered by auditors, “we pressed on certain issues … but the train really has left the station on this deal.”
As part of the 2009 job-creating stimulus, the government has committed nearly $40 billion to clean energy projects. The first loan guarantee went to Solyndra Inc., a California solar firm backed by an Obama fundraiser. But instead of picking a winner, the government backed a loser. The firm failed, putting more than 1,000 people out of work and taxpayers on the hook for $535 million. Among questions now: Did the White House unduly influence the process? Did the Energy Department rush its first commitment, ignoring warning signs about the company's viability? Will this failed project cost Obama?