Rep. Cliff Stearns (R-FL) saw his "No More Solyndras" Act approved today by the Energy & Commerce Committee. Stearns, Chairman of the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations, is leading the probe into the Administration's mishandling of the Department of Energy's (DOE's) loan guarantee program that risked taxpayer dollars on private companies unable to compete in the market, such as Solyndra. Although numerous red flags were raised over the viability of Solyndra, which had never earned a profit, the company received $535 million in stimulus funding from the Obama Administration and within months went bankrupt and then was raided by the FBI.
"Through the investigation we identified many of the failures at the White House and at DOE that led to this massive loss to taxpayers, and I developed this legislation to strengthen the procedure and to protect the taxpayers from further losses," said Stearns. "In addition to effectively ending the loan guarantee program involving Solyndra, this legislation will prevent the subordination of taxpayers to other financing. Although the Energy Policy Act of 2005 prohibits this subordination of the taxpayer, the Obama White House relied on a questionable interpretation of the law to subordinate the loan to two private hedge funds."
During Committee consideration of his bill, Stearns offered an amendment, which was adopted by a strong bi-partisan vote of 34 to 14. Explained Stearns, "This amendment reaffirms that the subordination of a loan guarantee to other financing is prohibited at any time. Make no mistake about it, when DOE agreed to subordinate its obligation to third-party financing, it did so in violation of the law. It is a shame that I have to offer this amendment and yet without it DOE will simply continue relying on its flawed analysis, regardless of the risks presented to taxpayers."
The Energy and Commerce Committee released a comprehensive report on the legality of DOE's decision to put Solyndra's wealthy investors ahead of taxpayers when restructuring the Solyndra loan guarantee. The Committee found that DOE's decision clearly violated the law, and the report states: "It is clear, based on the plain language of the statute and common principles of statutory interpretation, that subordination of a guaranteed loan to other financing, at any time during the life of the loan, violates subsection 1702(d)(3) of Title XVII. Further, Committee staff's review of the manner in which the legal memorandum was drafted, and the reactions and opinions of other Executive Branch agencies regarding the subordination issue, demonstrate clearly that officials at DOE, OMB, and the Treasury Department did not believe that subordination was proper."