September 20, 2011 / 7:49 PM / 8 years ago

REFILE-UPDATE3-House Republicans step up probe into energy loans

* Lawmakers request details on 14 additional loans
    * Deadline for renewable loan guarantees only days away
    * Solyndra executives will plead fifth at Fri hearing
    * Lawmakers say Energy Department rushed deals
    * First Solar shares hit four-year low after news

    By Roberta Rampton and Nichola Groom
    WASHINGTON/LOS ANGELES, Sept 20 (Reuters) - U.S. Republican
lawmakers are stepping up their investigation into alternative
energy loan programs in the wake of the collapse of the
Solyndra solar company, the first company to receive such
government funding.
    Days before Department of Energy deadlines to finalize $8.9
billion in loans for 14 pending renewable energy projects,
Congressional investigators asked for detailed financial
information on the deals and the government's due diligence.
    "We are concerned that another rush to meet stimulus
deadlines will result in DOE closing these deals before they
are ready," said Fred Upton, Cliff Stearns and Ed Whitfield of
the House Energy and Commerce committee, in a letter to Energy
Secretary Steven Chu on Tuesday.
    The lawmakers have been probing whether politics influenced
government loans to Solyndra. They had expected company
executives to answer questions at a hearing on Friday.
    But lawyers for Solyndra executives said their clients
would not answer lawmakers' questions, invoking their rights to
avoid self-incrimination under the Fifth Amendment of the U.S.
    Upton and Stearns said they will still ask the executives
why they "misled our members about the financial state of their
company" during a mid-July lobbying trip, and about their
dealings with the Obama administration.
    Investigators asked for detailed financial information from
the Energy Department on its pending clean energy loans as well
as its existing portfolio of 18 guarantees worth $9.4 billion.
    A spokesman for the Energy Department said every deal
closed by Sept. 30 will be "fully vetted" and has had months of
extensive review.
    "We are not rushing to complete deals, we are using the
full amount of time Congress allocated for the program so we
can ensure that we fully complete all due diligence and make
informed decisions based on the most recent data," DOE
spokesman Damien LaVera said.ENOUGH DUE DILIGENCE?
    The loan guarantee program was created in a 2005 energy
law, and its funding was supplemented by the federal economic
stimulus package.
    The Energy Department has closed on a total of 18
guarantees, but had made conditional commitments for 14 other
loans for solar, wind, biofuel and geothermal projects around
the country.
    "We question whether the DOE needs additional time to
conduct its due diligence to ensure taxpayer dollars are not
being put at risk unnecessarily," the lawmakers said.
    Three of the conditional offers were to First Solar for large solar power plants in California. The
company has contracts to sell the power from the plants to
utilities in California and has said those sales would cover
its debt repayments.
    First Solar shares slipped to a four-year low of $78.68 per
share after the news and closed at $79.21, down 5.6 percent.
    The process for vetting and awarding the loan guarantees
has been cumbersome and the new Congressional request will
likely delay loans further, said Theodore O'Neill, a solar
industry analyst with Wunderlich Securities.
    "The big companies will look for financing somewhere else,
and the smaller companies are going to struggle," O'Neill
    Solyndra was the first company to receive loan guarantee
funding, securing $535 million in guarantees in 2009. The
company filed for bankruptcy last month, and is the focus of
investigations by the FBI and by Republicans in Congress.
    Solyndra Chief Executive Brian Harrison and Chief Financial
Officer W.G. Stover had agreed to testify to Congress about the
loans, but on Tuesday, their lawyers said they would not answer
questions, according to letters obtained by Reuters.
    The company said it was cooperating with the Justice
Department and did not break any rules. In a statement, it
blamed low prices and a glut of solar panels for its woes, and
said a failure of the DOE to agree to a new financing
arrangement led to its bankruptcy.
    "As late as August, the company believed that existing
investors and the DOE would come to a financing arrangement
that would have secured the capital the company needed,"
Solyndra said.
    The Solyndra loan had been hailed by President Barack Obama
and other top administration officials as a model of how the
government could kick-start job growth in clean energy.
    The company and Energy Department have blamed heavily
subsidized competition from China for the company's woes.
    But Republicans have uncovered e-mails showing concerns
about the company's finances dating back before the loans were
made. Other e-mails suggested decisions may have been rushed to
accommodate the schedules of Obama administration officials who
wanted to promote them.
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