Chu grilled by Republicans on Solyndra loan
WASHINGTON (Reuters) - Energy Secretary Steven Chu staunchly defended decisions he made on Solyndra on Thursday as he came under a withering attack from Republicans during a grueling, media-packed hearing that lasted about five hours.
The now-bankrupt solar panel maker, beneficiary of more than $500 million in government funding, was once held up by President Barack Obama, Chu and other top administration officials as a model of how they wanted to promote green energy and spur job growth.
But Republicans on the House of Representatives' Energy and Commerce committee said the loan was rushed, poorly monitored and overhyped, while honing in the decision to restructure the aid package in face of danger signs. Some questioned whether he should keep his position.
Chu, a bookish physicist and Nobel laureate, took full responsibility for decisions on the loan, but did not apologize.
"We really have nothing to hide, we have really nothing to be ashamed of," Chu told reporters after the hearing.
He said his department did its due diligence on the risks, and was not influenced by Solyndra investor George Kaiser, an Obama donor.
He calmly answered pointed questions, although his long and detailed answers often irked Republicans running the hearing. After several hours, Chu's endurance also began to flag.
"These questions are going over and over and over again, old territory," Chu said.
Democrats on the committee complained that the hearing was being used to score political points rather than get to the bottom of decisions on the loan.
Chu, who came to Washington with a mission to put the United States on a greener path, has suddenly been thrust into the middle of Washington's heated partisan politics leading up to the 2012 presidential elections.
He is more comfortable discussing the pros and cons of arcane technologies, and there are now questions about how long Chu will remain in Obama's cabinet.
Industry analysts, however, said he held his own during the fierce barrage of the hearing.
"From Day One, he has struggled because politics is not in his wheelhouse," said Frank Maisano, an energy analyst with Bracewell & Guiliani, a lobbying and law firm.
POLITICS AT PLAY
The nine-month investigation has amassed more than 250,000 pages of documents. Republicans walked Chu through dozens of them in a three-inch-(7.5-cm)thick white binder he kept close by during his testimony, which went through the troubled chronology of the company.
Much of the testimony went over familiar ground, said Joshua Freed, vice-president for the clean energy program at the Third Way, a think tank in Washington.
"It reminds me of the old Washington saw: when there's smoke in Washington, it's usually a smoke machine," he said.
In late October 2010, as the company ran out of cash and was poised to make some layoffs, the Energy Department asked Solyndra to hold off on its announcement under after the November 2 midterm elections, which the company did, according to several emails from Argonaut Private Equity, Kaiser's investment manager.
"This is disgusting. This happened under your nose ... I'll hope you'll go back to your agency and have some heads roll," said Steve Scalise, a Louisiana Republican.
Chu said he had not approved that request and had only recently learned about it, telling lawmakers the department's general counsel was looking into what happened.
Henry Waxman, the senior Democrat on the panel, said he did not condone the timing decision, but pointed out that it did not affect the loan or risk taxpayer money.
"It's all that our committee has found after reviewing hundreds of thousands of pages of documents and interviewing countless witnesses. It's really small potatoes," Waxman said.
But Republicans vowed they would continue the probe, with more hearings to come.
Republicans argue the government could have pulled the plug earlier, but instead restructured the deal. The decision put taxpayers behind $75 million in private investment in the event of bankruptcy -- a subordination that Joe Barton, a Texas lawmaker, said was illegal.
"I helped write the law. There's no ambiguity," Barton told reporters.
Chu maintained the department had the right to make that call, and said he believed the department made the best of a bad situation.
"It was a difficult decision and we were always, always focused on that path that led to as much taxpayer recovery as possible," he told lawmakers.
Congressman Michael Burgess, a Texas Republican, pressed Chu on whether he should continue in his position in light of his decision place taxpayers behind other creditors for repayment -- a question Chu did not answer directly.
"Is (President Obama) comfortable with you continuing your position when there was a violation of law?" Burgess asked Chu.
Solyndra was not able to find any acceptable buyers by a Wednesday deadline. The company and its main creditors agreed to put off an auction of its assets for two months in the hope stronger bids emerge.
Chu said he now does not expect the government to recover much of its investment.
Chu declined to directly answer whether other Energy Department loan guarantees are at risk. Beacon Power, an energy storage company with a $43 million loan guarantee, has filed for bankruptcy.
"The majority of the portfolio seems to be in good shape, a large majority," Chu said.
Cliff Stearns, the Florida Republican leading the probe, warned Chu that a White House probe led by former investment banker Herb Allison, slated to report by the end of the year, would reveal other weaknesses.
"Mr. Allison's going to come back and tell us which ones are high-risk," said Stearns, who told reporters after the hearing that he believes Chu should be replaced.