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Energy Dept needs overhaul of loan oversight-review
February 10, 2012 / 8:01 PM / in 6 years

Energy Dept needs overhaul of loan oversight-review

* Struggling to fill key positions to manage loans

* Did not evaluate failed loan to Solyndra

* Chu: will review ideas, but program is working

By Roberta Rampton

WASHINGTON, Feb 10 (Reuters) - The U.S. Energy Department relies on too many consultants and committees for managing its loans and needs to beef up its management, concluded a review commissioned by the White House in the wake of publicity over failed solar panel maker Solyndra.

Herb Allison, a former investment banker known for his work helping government agencies manage large, complex financing programs, reviewed the energy loan program, and recommended an overhaul in oversight of the $23.769 billion portfolio.

He said the Energy Department has struggled to fill vacancies in key positions without success. “At least one manager is acting head of several departments,” he said in a 75-page report.

Decisions should be made by individual managers with expertise, Allison said, instead of using a committee process “where collective responsibility can obscure individual accountability.”

Allison did not review a $535 million loan guarantee to Solyndra, which filed for bankruptcy last year and has become a political sore spot leading into the 2012 election season.

The loan was once held up by President Barack Obama as an example of how his administration was creating new jobs with “stimulus” funding while promoting renewable energy.

It now is featured in at least two attack ads on television, and candidates for the Republican presidential nomination regularly invoke Solyndra as a symbol of what they say is government waste and misguided energy policy.

Energy Secretary Steven Chu said he would review the recommendations to find ways to strengthen the program.

But he said the program is working as it is intended, and noted that the review rated the overall risk of the loan portfolio as “slightly lower” than the department’s projections.

“We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest,” Chu said in a statement.

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