The U.S. government refused to further alter its loan deal with Solyndra in August after determining it would not help the now-bankrupt solar panel company survive, a top Energy Department official said on Thursday.
After consulting with experts and weighing possible outcomes for solar start-up Solyndra, the first recipient of a government loan guarantee for renewable energy, the department knew that new terms for the loan would not help the ailing company, said Deputy Energy Secretary Daniel Poneman said.
"The assessment was that the taxpayers' best interest would not be served by doing another turn of the wheel at that point," Poneman told reporters after a congressional hearing on green jobs.
Six months earlier, the government had made the opposite decision. With hope that the company could still survive, the department changed the terms of the $535 million loan guarantee Solyndra received in 2009, giving the government lower priority for repayment in the event of default, said Poneman, who was directly involved in the restructuring decision.
Republican lawmakers investigating the Solyndra loan guarantee have said this revised arrangement placing taxpayers behind other creditors may have run afoul of federal law.
Poneman, the No. 2 official at the department, defended the restructuring, saying the government's deal had firm legal footing.
"We actually had the benefit of extensive legal review of that question," Poneman said.
"The statute is quite clear when you are issuing a loan: you have to have priority and we did. The statute is also equally clear that the Secretary of Energy has a responsibility to maximize taxpayer interest," he added.
When faced with the opportunity to restructure the deal the first time around, Poneman said the department had to make "hard choices" about whether taxpayers would get more return from attempting to keep the company afloat or whether it would be better to let the company go into liquidation.
The decision was made at that time to revise the deal, which Poneman said was "entirely legal."
FALLOUT FROM SOLYNDRA
The fall of Solyndra and a subsequent Justice Department investigation of the company has spurred intense criticism of the Obama administration's clean energy policies, with Republicans charging that the department placed political concerns above financial vetting for pet projects.
The Republican-led Energy and Commerce committee will hold a hearing with top Solyndra executives on Friday. The executives are expected invoke their right against self-incrimination under the Fifth Amendment of the U.S. Constitution and decline to answer questions. [ID:nS1E78J1L6]
As part of their probe of the Solyndra loan, committee members on Thursday asked for all documents of all communications the Energy Department had with the White House and the Treasury Department related to Solyndra.
Top Democrats on the energy committee, Henry Waxman and Diana DeGette, asked the panel to expand its probe of Solyndra to look at whether U.S. policies are doing enough to make sure U.S. solar manufacturers can compete in a global market.
Democrats have argued that heavily subsidized Chinese competitors helped to sink Solyndra, a sign that the United States is losing the race to be a leader in clean energy innovation.