House GOP: Did DOE break the law on Solyndra?

House Republicans released new e-mails on Friday evening that they claim show the Treasury Department believed the Energy Department was violating the law when it restructured a $535 million loan guarantee to Solyndra, the defunct solar manufacturer at the heart of an FBI investigation. An Energy Department spokesman said the House GOP analysis of the e-mails was wrong.

House Energy and Commerce Chairman Fred Upton, R-Mich., and House Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla., released an e-mail from a top Treasury Department official that suggests the official-Treasury Assistant Secretary for Financial Markets Mary Miller-believed the Energy Department violated the Energy Policy Act of 2005 by putting private investors' debt obligation before the government's in the case of a default when the government restructured Solyndra's loan in February 2011.

"Our legal counsel believes that the statute and the DOE regulations both require that the guaranteed loan should not subordinate to any loan or other debt obligation," Miller said in an August 2011 e-mail to Jeffrey Zients, acting deputy director of the White House Office of Management and Budget. The DOE regulations also state that DOE "shall consult with OMB and Treasury before any 'deviation' is granted from the financial terms of the Loan Guarantee Agreement."

The e-mail goes on: "In February [2011], we requested in writing that DOE seek the Department of Justice's approval of any proposed restructuring. To our knowledge that has never happened."

But Energy Department spokesman Damien LaVera issued a statement defending the process.

"Assistant Secretary Miller's e-mail was written in August 2011, six months after the restructuring decision was finalized," LaVera wrote. "When the Treasury Department raised questions with the Energy Department in February, the career staff at the two departments discussed these issues. Ultimately, DOE's determination that the restructuring was legal was made by career lawyers in the loan program based on a careful analysis of the statute."

Upton and Stearns sent a letter to Treasury Secretary Timothy Geithner on Friday outlining their concerns about the e-mail exchange.

"In the course of our investigation, we have uncovered information that raises questions as to whether the Department of Energy satisfied the requirement to consult with the Department of Treasury about the $535 million loan guarantee issued to Solyndra in September 2009 and the restructuring of that agreement in February 2011," Stearns and Upton write in the letter.

They asked Geithner for all documents containing communication about Solyndra's loan guarantee from his department and to the other involved executive branches, including OMB, DOE, the White House, and the Justice Department. They also request analyses and studies related to the loan guarantee.

Solyndra announced it was filing for Chapter 11 bankruptcy on Aug. 31 after talks broke down over trying to restructure the loan a second time shortly before that.

Republicans have been investigating Solyndra before the company went under, but its probe went into high gear once it did and after the FBI raided Solyndra's California headquarters a week later. House Republicans speculated early on that the administration could be in violation of the Energy Policy Act of 2005 when it decided to subordinate taxpayers' dollars to the debt obligation of private investors, some of whom have close ties to President Obama.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.