Department of Energy Secretary Steven Chu testified before the House Energy Commerce Committee on Thursday morning and said there was no wrongdoing involved with the loan guarantees given to now-bankrupt solar maker Solyndra. Chu said the final decisions associated with the $535 million in loans — and the subsequent restructuring of the loan — to Solyndra were his, and that he made them “with the best interest of the taxpayer in mind.”
The loans weren’t granted because of political considerations, said Chu, directly answering the accusations now being leveled at the DOE by House Republicans. Chu said he decided to restructure the loan to Solyndra, and turn the later stage funding from Solyndra’s private investors into senior debt (to be paid back first), “to give the taxpayers the best chance,” at recovering any of the funds.
Solyndra was about to go bankrupt when the DOE restructured the loan and brought in Solyndra’s private investors to put in another $75 million. But when Solyndra ran out of cash months later, the DOE decided to let the company go bankrupt. Chu says throughout the process:
While we are disappointed in the outcome of this particular loan, we support Congress’ mandate to finance the deployment of innovative technologies, and believe that our portfolio of loans does so responsibly.
Will the respected head of the Department of Energy answering direct questions about Solyndra close this debate over what happened? Probably not, given we’re moving into an election year. But Chu’s hearing was the most direct response to the accusations from House Republicans to date.
How much money could be recovered from Solyndra’s assets? According to Reuters, Solyndra wasn’t able to seek an adequate buyer for its factory and IP that would enable a buyer to restart up the Solyndra operations, and will postpone that auction to January. Solyndra auctioned some of its assets earlier this month.
When House Republicans asked Chu how much money he thought would be paid back from the Solyndra loan, Chu answered: “Not very much.”
Image of the banner that was at Solyndra for President Obama’s visit, which later was auctioned off for several hundred dollars.