WASHINGTON — Solar energy equipment maker Solyndra Inc., which was subjected to FBI raids last week on its Bay Area office and executives’ homes, faces a public and probably embarrassing reckoning Wednesday before a House subcommittee.
The hearing is the latest step by the House Energy and Commerce Committee and its oversight arm to push an investigation it began in February into the Energy Department’s decision to give Solyndra a $535 million loan guarantee under the American Recovery and Reinvestment Act.
The committee wants to explore, in particular, questions about whether the loan from the $787 billion stimulus fund was granted because of Solyndra’s financial ties to a major Democratic fundraiser, George Kaiser.
“We smelled a rat from the onset,” said Rep. Fred Upton, R-Mich., the committee’s chairman. The committee has said the White House has been reluctant to turn over information about what, if any, role it played in the decision to lend to the Fremont, Calif., company.
Obama administration staff and Solyndra executives are expected at Wednesday’s hearing. They include Jeffrey Zients, deputy director of the White House Office of Management and Budget; Jonathan Silver, head of the Energy Department’s loan programs; Brian Harrison, Solyndra’s chief executive; and W.G. “Bill” Stover, its chief financial officer.
The administration’s critics couldn’t have asked for better ammunition in their attacks on the White House than the Solyndra scandal.
Many Republicans have argued that federal backing of clean energy technology is a waste of money and a clear example of government picking business winners and losers. The committee, however, does not oppose tax breaks to fossil fuel companies that critics say subsidize that sector.
In January, the committee drew up a list of priorities that included close scrutiny of the Obama administration’s clean energy programs.
Kaiser, an Oklahoma billionaire who was a major fundraiser for Obama in 2008, has denied that he invested in Solyndra or that he participated in talks for the federal loan. The Energy Department has said Solyndra applied for the loan under the Bush administration.
The FBI declined to comment on the raid and investigation.
President Barack Obama visited a Solyndra plant in May 2010 to herald it as “leading the way toward a brighter and more prosperous future,” just after a market analyst issued a report raising questions about the company’s financial condition and whether it could continue as a “going concern.”
Subsequently, Solyndra seemed to experience one stumble after another.
It shelved an initial public offering of stock in June 2010. It replaced its chief executive and founder, Chris Gronet, a month later. It canceled a plant expansion and closed an older facility last fall.
By late August, Solyndra had suspended its operations and laid off 1,100 employees. The company filed for Chapter 11 bankruptcy protection last week, and two days later the FBI raided its offices as part of a joint investigation it was conducting with the Energy Department’s inspector general’s office.
Among the problems Solyndra faced was that it was introduced expensive new technology at a time when Chinese manufacturers, usually subsidized by their government, had sharply driven down the prices of solar equipment.