Amid revelations that the Obama administration considered bailing out the solar company Solyndra, a House subcommittee on Thursday voted to subpoena White House records related to the failed firm's financial and political connections.
Rep. Cliff Stearns, R-Ocala, chairman of the House Energy and Commerce Oversight Subcommittee, said the subpoena was necessary because the White House is "slow-walking" all requests for information.
"We want to get to the bottom of this," Stearns said of the bankrupt company that took $528 million in federal loans down with it.
On the losing end of a party-line 14-9 vote, Democrats tried to block the subpoena.
The White House said it has "cooperated extensively with the committee's investigation by producing over 85,000 pages of documents, including 20,000 pages produced just [Wednesday] afternoon."
"And all of the materials that have been disclosed affirm what we said on day one: This was a merit-based decision made by the Department of Energy," White House spokesman Eric Schultz said.
But the inspector general's office that first raised concerns about the federal loan program used to finance Solyndra said the Energy Department was ill-equipped to quickly distribute billions of dollars in economic stimulus funding.
The Energy Departments inspector general, Gregory H. Friedman, said Energys $35.2 billion in stimulus funding eclipsed its annual budget by $8billion and placed strains on the federal, state and local officials responsible for distributing the funds, according to the Washington Post.
Friedman said the department failed to properly document and could not always demonstrate how it resolved or mitigated risks before granting loan guarantees, the Post reported.
Congressional Republicans began investigating Solyndra months before the California-based Solyndra filed for bankruptcy protection in September and laid off 1,100 workers.
But even amid revelations that federal officials warned of Solyndra's problems, President Obama visited the company and praised it publicly.
At the time, Obama boasted, "Companies like Solyndra are leading the way to a brighter, more prosperous future."
The administration's document dump on Wednesday revealed that it considered a bailout of Solyndra days before it collapsed.
The bailout would have provided an infusion of cash and a new board of directors, including two directors appointed by the Energy Department, Fox News reported.
Officials rejected the plan, which was recommended in August by the investment banking firm Lazard Ltd. Lazard was paid $1 million for analyzing options related to the faltering company, the Fox report said.
According to email records released Wednesday, the bailout plan considered by the Energy Department would have converted much of the U.S. loan to equity in the company worth as much as 40 percent.
Lazard was hired to look at Solyndra's financing after the company received a $528 million loan in 2009 and $69 million in private money earlier this year in a restructuring deal approved by the administration. Under the second deal, the private investors moved ahead of U.S. taxpayers in case of a default on the loan, a move that GOP investigators criticized.
Without an infusion of new cash, Lazard wrote in an Aug. 17 memo to the Energy Department, Solyndra was almost certain to fail, which would "likely result in little recovery to the DOE." The department rejected the refinancing plan sometime after Aug. 28, and Solyndra shut its doors on Aug. 31, the Fox report stated.
White House Chief of Staff Bill Daley announced last week that he had ordered an independent review of similar loans made by the Energy Department.
Stearns was unimpressed.
"Why have two of the first three companies that received these loan guarantees failed? Why was the taxpayers' money subordinated in the Solyndra loan? Why were so many warning signs and red flags ignored?" he asked during the subcommittee meeting Thursday.
"We want answers, and so do the American taxpayers. It is unfortunate that it has come to this [subpoena], but we do not have any faith in the White Houses overtures -- they seem to simply want to delay and obstruct."
After the subcommittee vote, Stearns said in a statement:
This inquiry has found a cause for great alarm over the political influence contaminating the DOE loan guarantee program. Documents reveal a disturbing prevalence of wealthy donors and bundlers littered throughout the loan guarantee process, with direct access to the presidents West Wing inner circle.
"It is unfortunate that it has come to authorizing a subpoena, but we do not have any faith in the White Houses overtures -- they seem to simply want to delay and obstruct.
In another black eye for the administration, Labor Department watchdogs criticized the $490 million in stimulus funds earmarked for "green jobs" training.
As of June, the 8,000 unemployed workers who had landed green jobs after completing stimulus-backed training programs represented just 10percent of the administrations goal, Elliot Lewis, the department's assistant inspector general, told the House subcommittee on regulatory affairs
Green jobs have not materialized, and therefore job placements had been much less than expected, the Post quoted Lewis as saying.
Energy Secretary Steven Chu is scheduled to testify at the House Energy Committee on Nov. 17.
Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
