White House orders independent review of Energy-loan program

By Amy Harder and Coral Davenport

October 28, 2011

White House Chief of Staff Bill Daley said on Friday that the administration is ordering an independent analysis of the Energy Department program that gave a $535 million loan guarantee to Solyndra, the bankrupt solar-energy company that is already facing an FBI probe.

The move is one of the most explicit acknowledgements from the White House to date that the Energy Department's loan-guarantee program deserves scrutiny. At a press conference earlier this month, President Obama defended the program despite Solyndra's downfall.

"The president is committed to investing in clean energy because he understands that the jobs developing and manufacturing these technologies will either be created here or in other countries," Daley said in a statement. "And while we continue to take steps to make sure the United States remains competitive in the 21st-century energy economy, we must also ensure that we are strong stewards of taxpayer dollars."

The 60-day review will be conducted by former Assistant Treasury Secretary Herb Allison, who was charged with helping stabilize the financial sector and oversaw the Troubled Asset Relief Program.

White House officials said that following the 60-day review, Allison will issue a public report to the administration that includes an evaluation of the current state of the loan-guarantee program, recommendations to improve monitoring and management of the program, and the establishment of an early-warning system to identify potential concerns in the future.

Meanwhile, House Republicans next week plan to continue their investigation of the program. The Energy and Commerce Oversight and Investigations Subcommittee is scheduled to vote on Thursday to subpoena the White House for internal West Wing communications on Solyndra after White House Counsel Kathryn Ruemmler refused to turn over all documents last month.

"Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration's stonewall on Solyndra," Energy and Commerce Chairman Fred Upton, R-Mich., and Oversight and Investigations Chairman Cliff Stearns, R-Fla., said in a joint statement on Friday.

House Republicans are seeking all White House communications dating back to President Obama's inauguration in January 2009.

That request "implicates longstanding and significant institutional Executive Branch confidentiality interests," Ruemmler said in a letter to the GOP leaders on Oct. 14. "Encroaching upon these important interests is not necessary, however, because the agency documents the committee has requested, which include communications with the White House, should satisfy the committee."

Energy Secretary Steven Chu will take the hot seat on Nov. 17, the next scheduled hearing on Solyndra. The documents Republicans are seeking from the White House will be critical to the hearing, which will focus on DOE's approval of Solyndra's loan in 2009 and the decision to restructure the loan in February 2011.

Republicans allege that the Energy Department violated the Energy Policy Act of 2005 when it restructured Solyndra's loan and made the government's debt obligation secondary-or "subordinate"-to that of private investors, including a foundation founded by oil billionaire George Kaiser, a major 2008 bundler for Barack Obama's presidential campaign.

While some of Stearns's GOP colleagues on the committee have said Chu should resign over Solyndra, Stearns is not quite ready to "commit" to that yet.

"I think before I commit on this, I'd like to hear from him personally," Stearns said on CSPAN's Washington Journal last week. "One of his counsel has indicated their interpretation of the Energy Policy Act of 2005 is that they could subordinate … so let's hear their side before we make a judgment on Secretary Chu."

By Amy Harder and Coral Davenport

October 28, 2011