White House orders loan review to avoid more Solyndras
The White House, shifting its position on the Energy Department's loan guarantees, said it will now review the entire program for such ill-fated decisions as the much-publicized $535-million loan guarantee for California solar equipment maker Solyndra, which later fell into bankruptcy.
The step aims to defuse the embarrassing Solyndra episode, which has given rise to criticism that the Obama administration has wasted hundreds of millions of dollars in taxpayer money.
In a news conference this month, the president asserted that "the overall portfolio has been successful." He said: "It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It’s helped to create jobs."
Obama’s defense opened him to charges that he has been tone-deaf to Solyndra’s implications. With the economy still weak and deficits topping $1 trillion, the White House can’t afford to be seen as lax overseers of taxpayer dollars.
Republicans have seized on the issue. As Obama crisscrosses the country pressing for his $447-billion jobs plan, Republicans have been citing Solyndra as an example of stimulus spending that backfired.
GOP presidential candidate Mitt Romney, speaking at the Values Voter Summit this month, said: "I welcome renewable energy. But as an old venture capitalist myself, I can tell you this: There will be no more Solyndras."
White House chief of staff William Daley ordered the 60-day evaluation and asked for recommendations about "how to improve the loan monitoring process," according to the White House.
Leading the inquiry is Herb Allison, a former Treasury official who oversaw the federal bailout program for the financial sector.
In a statement, Daley said that "while we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars."
Investigators are poring over the Solyndra deal. The Justice Department and congressional Republicans have been investigating the loan since the company filed for bankruptcy. At the request of Republican-controlled congressional committees, the White House has turned over thousands of emails, some of which showed administration officials rushing to approve the deal in time for a glitzy photo op.
The White House has balked at releasing everything in its possession, including the president’s BlackBerry messages. Republicans are threatening to use subpoenas to get more information even as the administration prepares to release thousands more email communications in the coming months.
They aren’t stopping at Solyndra. Congressional investigators have recently turned their attention to loan guarantees granted by the Energy Department to two automakers -- Fisker Automotive and Tesla Motors -- and to the U.S. subsidiary of a steel company owned by a Russian firm.
-- Peter Nicholas and Neela Banerjee
Photo: Solyndra's headquarters in Fremont, Calif. Credit: Robert Galbraith / Reuters