Ben Johnson, The White House Watch
A parade of Treasury Department officials testified on Friday that they had never before seen a government loan restructured as the one with Solyndra had been. The testimony came as the Republican-controlled House investigated whether the Obama administration had committed a crime in its handling of the politically connected solar energy firm.
Months after the Obama administration granted the $535 million loan to the firm with which it had such close ties, it allowed investors who sank in an additional $75 million to recoup their funds before taxpayers in the event of bankruptcy.
On Friday, Gary Burner and Gary Grippo, high-ranking Treasury Department employees, told the House Energy and Commerce oversight subcommittee that never in their memory had private investment funds been prioritized ahead of taxpayer dollars.
There is a good reason for that: House Republicans contend it is illegal. The Energy Policy Act of 2005 clearly states that all government loan guarantees “shall be subject to the condition that the obligation is not subordinate to other financing.”
Prior to the hearings, Rep. Mike Pompeo, R-KS, remarked, “It was very clear that the statute did not permit the administration to allow private citizens to get ahead of taxpayers when they restructured the loan, and they did that.” He added new documents proved the deal was a more prevalent form of crony capitalism than believed. “It looks like, again, folks who were investors in Solyndra — private investors — were working hard inside this administration to get favored deals for Solyndra,” he said.
The Congressman’s remarks came as news reports show more insiders to have been involved in the failed, government-guaranteed loan. E-mails show Obama adviser David Prend was the first to pressure the administration to provide the loan to Solyndra. The company he co-founded, Rockport Capital, held 7.5 percent of its stock. In addition to Prend, Steve Spinner, who served on Obama’s transition team, pushed for the loan, although his wife was the company’s lawyer. These two join the firm’s most notorious connection: Obama campaign bundler George Kaiser.
Rockport was among the firms that provided the $75 million and which the Obama administration preferred over U.S. taxpayers.
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