Energy Secretary Chu Makes No Apologies For Solyndra Swindle

Press Release

Energy Secretary Steven Chu told congressional investigators he approved the $535 million earmark loan to Solyndra, but made a surprising statement that he was not aware professional analysts inside and outside the federal government thought the company was a serious credit risk and would be unable to pay the money back.

During his questioning of Secretary Steven Chu at the Energy and Commerce Oversight and Investigations hearing Thursday, Congressman Murphy pointed out that staffers at the White House's Office of Management and Budget raised a series of red flags just days before the loan was made. Chu repeatedly stated he was only aware of their concerns after the fact.

However, even as officials within his own agency and at the Treasury Department raised concerns, the Energy Department continued to cut checks totaling tens of millions of dollars each month to Solyndra, which was burning through $4 million in cash every week.

During an interview Friday morning with Stuart Varney of Fox Business News, Rep. Murphy said "It was pretty clear there was information that this company was in trouble."

Rep. Murphy on Fox Business News with Stuart Varney

Rep. Murphy said that not only did the Energy Department (DOE) officials ignore clear fiscal calamity warning signs, but violated the law by restructuring the loan to "subordinate" the taxpayers' position behind that of private investors.

According to an initial legal analysis prepared for the Department of Energy by outside counsel, the 2005 Energy Policy Act prohibited a subordination of the loan guarantee. Instead of finalizing the analysis, the Energy Department chose to write a new internal justification only after the restructuring had been agreed to. Officials at the Treasury Department told DOE the law required the Justice Department to review the subordination justification first

"…with all that, it became pretty clear to me from what the Secretary was saying, that they didn't think there was any chance this company was going to pay anything back and that's where it breaks the law."

Rep. Murphy has called for a Justice Department investigation of the Secretary's decision to violate the law as the Committee continues the investigation.

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