What Stephen Chu Does and Doesn't Know About Solyndra
We expected a number of uncomfortable questions to be raised during Energy Secretary Stephen Chu's first testimony before the House Energy and Commerce Committee today and House Republicans did not disappoint. Chu was grilled on everything from the initial approval of Solyndra's $535 million loan to emails suggesting political pressure from the White House to the restructuring of the Solyndra loan in February to whether he even knew of the existence of Obama fundraiser George Kaiser. Some of his responses were thoughtful. Others were cagey. Here's what Chu does and doesn't know about Solyndra, according to today's testimony.
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Did you pressure Solyndra to delay the announcements of layoffs? This question stems from uncovered emails of a Solyndra investor saying that the Department of Energy "pushed very hard" for Solyndra to hold off on announcing layoffs until after the Nov. 2010 midterm elections. Chu said he was dismayed to see the emails but was unaware that officials were doing that. “I don’t know. I just learned about that,” he said. "I was not part of that decision, and I certainly would not have been in favor of that decision. I don't believe it's a proper way to do business."
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Did you know who George Kaiser was? A seemingly easy question from Rep. Joe Barton got a strange response: "I know now."
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How much will taxpayers get back? “That remains to be seen. Not very much,” Chu said.
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Why did you restructure Solyndra's loan? This question garnered a rather thorough response. In February, when there were a number of signs Solyndra was not on sound financial footing, the DOE agreed to restructure its loan. Chu said "at that point, we had a half-completed factory, and we had two choices — we either had to stop the loan, which would’ve put Solyndra into immediate bankruptcy, or we could continue on contract of the loan to build the factory ... It was a difficult decision."
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Did the White House put pressure on you to approve the loan? “We did not communicate with the White House on whether we should approve a loan, and especially the Solyndra loan,” he said. “That was our responsibility."
Was the loan restructuring legal? As The Washington Post's Brad Plumer notes, "Democrat. Rep. Gene Green (D-Tex.) tore into Chu over the fact that the Energy Department restructured Solyndra’s loan guarantee so that outside investors would get paid before" taxpayers. Green said that restructuring may have violated Congress's 2005 Energy Policy Act. “We believe there was no violation of the law,” Chu said. “That seems like a tortured legal reading of a fairly straightforward law,” responded Republican Congressman Michael Burgess.
Why did Solyndra ultimately fail? "The price of solar panels dropped precipitously, in a single year dropped by 40 percent,” he said. Accoridng to the Post, "He chalks this up to two factors—ramped-up production in China and decreasing subsidies in Europe that softened the market."
