House hearing marks new low in Solyndra witch hunt
Republicans are taking their Solyndra scandalmongering to the next level at today’s hearing in the House Energy and Commerce Committee. They’ve called two critics of the Department of Energy to testify — and will allow no response from DOE, even after Democrats on the committee requested that someone from the department’s loan-guarantee program be allowed to testify.
Suffice to say, these are not the actions of people seeking the unvarnished truth.
Explaining why this is so egregious requires a little backstory. A little over a year after the original Solyndra loan guarantee was approved, the company was running low on cash. Its investors, however, were loathe to take on more risk. At that point, DOE officials (including Jonathan Silver, the head of the loan-guarantee program) faced a choice: Share some of that risk and give the company the best possible chance to survive, or pull the plug.
DOE chose to help out. Early this year, it structured a deal with Solyndra’s two biggest investors, Argonaut Private Equity and Madrone Capital Partners. The investors would kick in $75 million more in investment capital for Solyndra. In exchange, DOE would put them ahead of taxpayers in line to get paid back if the company should default (but only for that $75 million).
In February, the chief financial officer at the Treasury Department’s Federal Financing Bank, Gary Burner, sent a huffy email. Politico has the story:
“Unless DOE has other authorities, these adjustments may require approval of the Department of Justice,” Burner wrote to Susan Richardson, chief counsel in DOE’s Loan Programs Office, and Frances Nwachuku, director of portfolio management in the same office.
“Let me know if you need the name of a contact at DOJ,” he added.
DOE officials pushed back a few hours later.
“I believe there is a gross misunderstanding of the outcome of the negotiated restructuring of the Solyndra obligation to DOE,” Nwachuku replied. “Could you give me a call to discuss.”
David Frantz, the director of DOE’s Loan Guarantee Office, also spoke up in an email that shrugged off the Treasury official’s concern. “I think his point was just a heads up,” he wrote. “I do not believe there is an issue here and fear Gary may have some misunderstanding.”
But six months later, as Solyndra edged closer to filing for bankruptcy protection, a top Treasury official reminded colleagues in the White House Office of Management and Budget that DOE had been warned about its plans to change the terms of the loan guarantee.
“In February we requested in writing that DOE seek the Department of Justice’s approval of any proposed restructuring,” Mary J. Miller, assistant secretary for financial markets at Treasury, wrote to Jeffrey Zientz at OMB. “To our knowledge, that has never happened.”
DOE lawyers, who had reviewed the restructuring, thought — and still think — that Burner is completely off base. “[I] fear Gary may have some misunderstanding” is the kind of condescending thing you say when the misunderstanding is pretty obvious. Generally speaking, it makes sense that the people running the program will have a better understanding of the legal ins and outs than a guy from Treasury.
It wasn’t until later, in August, when it was clear Solyndra was in serious trouble, that Miller wrote to OMB to tattle on DOE in what looks to me like a classic case of ass-covering.
But I’m not a lawyer. I don’t know who had the right of it, DOE or Burner. If I cared to find out who had the right of it, I would invite Burner and someone from DOE to come to Congress to explain the difference of opinion. Perhaps invite some outside authorities on the 2005 energy bill and its loan-guarantee rules.
But that’s not what Republicans are doing. They’ve had five hearings in as many weeks, sniffing around frantically for something scandal-ish in this “scandal,” and they’re not going to let this opportunity pass. So they’re calling Burner and another Treasury official to testify … and that’s it. They’re allowing the only inside critics of DOE they can find to air serious charges, unrebutted and unbalanced by DOE or anyone else.
Again: Is that the kind of thing you do when you’re seeking the truth?
Naturally Democrats on the committee are pissed. Ranking member Henry Waxman (D-Calif.) and Rep. Diana DeGette (D-Colo.) requested that someone from DOE be invited. Republicans told them to bug off. Says DeGette:
I’d like to have the [DOE] witnesses there to say, ‘You said you should contact the Justice Department. Did you contact the Justice Department? If not, why not? What did you do?’ That’s the kind of full investigation that would be helpful to the committee rather than to just be able to have some sound bites.
But of course, sound bites are exactly what Republicans want. They know the hearing will produce some vaguely damning quotes. They know that the insider political press will dutifully print those quotes. Then they will huff and puff with outrage that DOE must answer the charges (that it wasn’t allowed to answer). And the insider political press will dutifully print their outraged statements. And on and on, a perpetual motion machine of horsesh*t.
This is no longer really about what happened at Solyndra, if it ever was. Like most of what congressional Republicans have done since Jan. 20, 2009, it is primarily intended to obstruct and discredit the Obama administration.