In Solyndra Loan Guarantees, White House Intervention Is Questioned

But at a subcommittee hearing, officials of the Energy Department’s loan office and the White House budget office defended their decisions, which they said were carefully reviewed and not politically inspired.

The collapse of the deal has turned what was once portrayed by some as a shining example of the promise of federal subsidies to stimulate economic growth through green jobs into a grim lesson in what others call the futility of federal meddling in the marketplace.

The subcommittee’s Republican staff members, in a memorandum issued at the hearing, said that e-mails among White House staff “raise questions as to whether the Solyndra loan guarantee was pushed to approval before it was ready in order for the Administration to highlight the stimulus, and whether additional time might have resulted in stronger mitigation of the risks presented by the deal.” The e-mails were first disclosed in The Washington Post and on the Web site of ABC News.

While President Obama has made fostering the green energy sector a hallmark of his policies since coming into office, his Energy Department has repeatedly asserted that Solyndra, based in Fremont, Calif., was well on its way to getting a loan guarantee during the closing years of President George W. Bush’s administration.

“In fact, by the time the Obama administration took office in late January 2009, the loan programs staff had already established a goal of, and timeline for, issuing the company a conditional loan guarantee commitment in March 2009,” Jonathan Silver, executive director of energy loan programs, said in prepared testimony. Financed through the stimulus package that had just passed Congress, it was the first loan guarantee issued by the Energy Department under a program created by a 2005 energy law.

But Representative Cliff Stearns, a Florida Republican who is the chairman of the Energy and Commerce subcommittee on oversight and investigations, said Mr. Silver was wrong to claim “that Solyndra was a train ready to leave the station when Mr. Obama took office.” He said that in the last days of the Bush administration, an Energy Department committee unanimously rejected the request for a loan guarantee, calling it premature.

“Only after the Obama administration took control, and the stimulus passed, was the Solyndra deal pushed through,” Mr. Stearns said.

The Energy Department, in an e-mail with the subject “facts vs. fiction,” immediately disputed that account. Its review committee “did not reject the application,” wrote Dan Leistikow, the agency spokesman. “It noted that the project ‘appears to have merit’ and simply remanded the application without prejudice so that work could continue.”

Much of the early minutes of the hearing was taken up with assigning political blame. Mr. Stearns chastised the Democratic minority for having voted against having the committee subpoena documents concerning the deal.

“It should not take a financial restructuring, bankruptcy and an F.B.I. raid for my colleagues on the other side of the aisle to put politics aside and join us in our efforts,” he said. The F.B.I. seized documents at the company several days ago.

But the ranking Democratic member, Representative Diana DeGette of Colorado, said, “It should be clear to everyone in this room that solar energy development is not a Democratic or Republican issue — it is an issue of security American energy innovation for decades to come.”

The Solyndra loan guarantee was the Obama administration’s first. The administration, seeking to forge a “clean energy” economy and provide jobs in the face of a growing recession, picked the project partly because it was what government officials were then fond of calling “shovel ready.”

But Representative Michael C. Burgess, a Republican of Texas, said in an opening statement, “It appears the shovel that this project was ready for was to bury it somewhere.”

Jeffrey D. Zients, deputy director for management at the White House budget office, said that before the loan was finally approved in September 2009, its terms and the risks involved were carefully reviewed, with the energy loan office answering detailed queries from the budget office, and with advice from a credit rating agency, engineers and market analysts.

Jay Carney, the White House spokesman, said that the e-mails that the committee disclosed had “nothing to do with anything besides the need to get an answer to make a scheduling decision.” The company’s groundbreaking event, for its second solar panel manufacturing plant, was held on Sept. 4, 2009, with Energy Secretary Steven Chu attending and Mr. Biden speaking via satellite hookup.

At the hearing on Wednesday, skeptical Republicans pointed out that the Energy Department was likely to award billions more in loan guarantees soon, and questioned its ability to pick winners.

Mr. Zients said that under the Bush and Obama administrations, the energy loan program has closed 18 loan guarantees and made conditional commitments for another 18, including not only many solar projects, but also others for wind and geothermal energy. “We have reason to be optimistic that the portfolio as a whole will perform,” he said of the other loans.

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