Federal Officials Altered Solyndra Loan Terms

Thursday, 29 Sep 2011 12:24 PM

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Federal officials knew that the scandal-ridden loan deal to Solyndra was on the verge of collapse in December. However, instead of allowing the Obama administration-favored firm to go under, they altered the terms of the loan so the solar panel company could continue to draw on federal funds, The Washington Post reported.

The company, which had been awarded a $535 million government-backed loan, told the Energy Department last fall that it would be unable to make its first $5 million payment to a special reserve fund in December. The payment was required under the loan terms and designed to help protect taxpayers, according to the Post.

Emails show federal officials estimated they could save the taxpayers as much as $168 million by letting the company go under. Energy Department spokesman Damien LaVera confirmed to the Post that the Department knew Solyndra had violated the loan terms but approved a restructuring of the loan terms because the agency “thought it gave Solyndra a fighting chance to survive and the taxpayers their best chance to recover their loan,” the Post reported.

The company closed in August and filed for bankruptcy, laying off 1,100 worked and sparking investigations by the Energy Department’s Office of Inspector General, the Justice Department, and Congress.

Search warrants were executed as part of a criminal investigation, and the affair has turned into a major political problem for President Barack Obama. Some of the investors in the company have been linked to top Democratic fundraisers.

Rep. Cliff Stearns, R-Fla., chairman of the House Energy and Commerce Investigations Subcommittee, told the Post, “Even when Solyndra was out of cash in December 2010, DOE turned a blind eye to reality, doubling down on a bad bet that further put American taxpayers at risk.”

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