U.S. Treasury officials had just one day to review the Obama administration’s $535 million loan to the now-bankrupt solar panel company Solyndra, according to a new audit from the Treasury’s Inspector General. The report, published this week, found that the Treasury’s review was “rushed” to accommodate a Department of Energy press release announcing the approval of the Obama administration’s first clean energy loan.
In its feedback to the DOE, the Treasury raised several concerns about the loan, including about the amount of equity in the project, and voiced a preference for a partial, rather than a whole, loan guarantee. Although Treasury officials told the inspector general that these concerns were addressed, internal emails suggest that may not have been entirely true.
Here are excerpts from two emails included in the audit:
“…this should have been 65% debt and 35% equity instead of 73% debt and 27% equity… If this had been an 80% guaranteed loan, then the implicit guaranteed loan would have been 64% rather than 73%. DOE says that their hands are tied on this issue… They are under pressure to complete a deal.”
“we pressed on certain issues such as why we aren’t providing only a partial guarantee and covering a smaller percentage of the eligible project costs, but the train really has left the station on this deal.”
The report provides more damning evidence that the Obama administration was intimately involved in the Solyndra deal, and that the loan was rushed through for political expediency despite major warning signs about the financial viability of the company and the terms of the loan. Solyndra declared bankruptcy in August 2011, and the FBI has launched an investigation into whether the company lied about its finances to obtain the loan.
The new evidence now threatens to reignite the Solyndra scandal, providing Republicans with more ammunition to hammer Obama’s energy and government spending records as the party steps up its attacks going into the 2012 general election.
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