(CNSNews.com) – Treasury Department officials said they could not recall another time the government put the interest of private investors in front of those of taxpayers before the loan restructuring for the bankrupt but politically connected solar panel firm Solyndra.
Further, one department official told a House panel that the restructuring of the $535 million loan should have been reviewed by the Justice Department.
Rep. Cliff Stearns (R-Fla.), chairman of House Energy and Commerce Subcommittee on Oversight and Investigations, questioned Gary Burner, chief financial officer of the Treasury Department’s Federal Financing Bank.
“So in your experience of 28 years, plus being the chief financial officer, have you ever heard of taxpayer money be subordinate to outside commercial firms?” Stearns asked.
Burner responded, “No, sir. I have not.”
Stearns followed, “Has your experience been if they do it’s against the law?”
Burner responded, “I am unaware. I can’t give you a legal interpretation on that sir.”
Members of Congress wondered whether the restructured loan violated the Energy Policy Act. After the firm failed to make a profit and laid off workers, the Energy Department restructured the loan agreement to allow for $75 million in private investor loans to be paid back before the $535 million taxpayers’ money. The company declared bankruptcy in September, and shortly thereafter, the FBI raided its Fremont, Calif., headquarters.
Stearns asked the same question to Gary Grippo, Treasury’s deputy assistant secretary for fiscal operations and policy. “So you can’t from experience. In your limited experience, have you ever seen taxpayers’ money be subordinated?” Stearns asked.
Grippo responded, “I personally have not been involved.”
Argonaut Ventures holds 39 percent interest in Solyndra, the largest of any owner. Argonaut is owned by businessman George Kaiser, who also raised more than $50,000 for Obama’s 2008 campaign.
Meanwhile, Steven Spinner, an energy department advisor who helped raise $500,000 for Obama’s 2008 campaign, helped push the loan through, the Associated Press reported. ABC News reported that the law firm of Spinner’s wife Allison, Wilson Sonsini, received $2.4 million in federal funds for legal fees related to the $535 million Solyndra loan.
Previous hearings by the subcommittee showed that career government employees with the Department of Energy, the Treasury Department and the White House Office of Management and Budget warned against the loan. However, political officials such as Vice President Joe Biden’s Chief of Staff Ronald Klain, one time White House Chief of Staff Rahm Emanuel and others pushed the matter through.
In e-mails released earlier this month, Treasury Department officials warned the Energy Department to seek guidance from the Justice Department before proceeding with a loan, because it might be “improper.” However, Energy Department officials did not take this advice.
“They believed that the results of the deal, the reorganization, restructuring did not compromise the claim so it had not reached a point that they had to take it to the Department of Justice,” Burner told the subcommittee.
Rep. Tim Murphy (R-Pa.) asked, “Did they convince you it wasn’t necessary to go to the Department of Justice? Was their discussion convincing in your mind?”
Burner responded, “I thought it would have been wise for them to go to the Department of Justice.”