House Republicans sent a letter to Energy Secretary Steven Chu last Friday alleging he personally pushed for approval of a partial loan guarantee to support Solyndra.
The $1.4 billion guarantee was for Project Amp, a large-scale rooftop solar installation by Prologis. Solyndra was to provide panels for the first stage of the project, called Project Photon. The Prologis venture was to be largest U.S. solar panel installation on commercial rooftops.
Representatives Fred Upton (R-MI) and Cliff Stearns (R-FL) have chaired the House Energy and Commerce Committee investigation into the Department of Energy’s loan guarantee to Solyndra since February 2011. The investigation was expanded after Solyndra’s September 2011 bankruptcy.
Now, the chairmen have requested all documents related to Project Amp and Solyndra, since January 1, 2010, to be submitted to the Committee by February 24.
Representative Cliff Stearns. Photo Credit: AP
“We have questions about Solyndra’s involvement in Project Amp, and what role Solyndra’s involvement played in DOE’s decision to issue a conditional commitment to Prologis for the project,” said the letter.
“Based on our review of documents produced to the committee, it appears that Solyndra’s involvement in Project Amp was a significant factor both in the negotiations between DOE and Solyndra relating to a possible second restructuring of the loan guarantee in August 2011 and in the closing of the Project Amp loan guarantee.”
The DOE offered a conditional commitment for the loan guarantee to Prologis in June 2011, which it finalized in September 2011. While the initial plan had Solyndra providing solar panels for the first phase of the project, by the time the loan guarantee was finalized, Solyndra had filed for bankruptcy.
Reps. Upton and Stearns claim that despite hestitation to approve the loan guarantee for Project Photon, Secretary Chu personally encouraged the approval of the Prologis loan. The chairmen allege Chu’s enthusiasm was an attempt to prop up Solyndra.
The chairmen cited a June 2011 email from a Solyndra employee, relaying a conversation with an investment banker working on the Prologis deal. “[O]n three occasions this week he thought that the [Project Amp] deal was dead, but Secretary Chu personally pulled it off,” he wrote.
“Chu shared with the team that this deal went to higher levels in the Obama Administration to gain approval than any other transaction in the Loan Guarantee Program, and that he personally committed to seeing it through to a successful conclusion,” he continued.
The committee also cited the minutes of a DOE meeting that indicated Secretary Chu had personally requested a meeting to review the Project Amp loan guarantee.
The chairmen argue that Project Photon was crucial for Solyndra to improve its financial position and meet sales projections for the second half of 2011, factors which may have impacted the DOE’s deliberations on whether to restructure Solyndra’s loan guarantee.
“Documents obtained by the Committee indicate that DOE had some hesitation in approving the loan guarantee and that Secretary Chu intervened on behalf of Project Amp,” said Rep. Stearns in a statement.
“This brings up many questions, including if this was an attempt to support the faltering Solyndra since it occurred during discussions over the second restructuring of the Solyndra loan guarantee.”
However, the DOE claims that Chu did not support Project Amp because of potential benefits to Solyndra, since Solyndra had filed for bankruptcy weeks before Prologis’ loan guarantee was finalized.
“Secretary Chu strongly supported Project Amp because it will be the largest rooftop project in U.S. history and is expected to generate enough clean, renewable electricity to power over 88,000 homes while supporting at least a thousand jobs all across the country,” department spokesman Damien LaVera said in a statement.
“As has consistently been the case in course of this committee’s year-long political investigation, critics of our effort to support innovative, job-creating clean energy projects will say anything to distort the record,” he said.
Read the full text of the letter from Reps. Upton and Stearns here.
