Tomorrow (Friday) the House Energy and Commerce committee will begin hearings on the collapse of Solyndra, a bankrupt solar energy company in California, that received over half a billion in loan guarantees as part of the stimulus program.
The Obama administration had showcased the company as part of its program of putting America back to work via green energy products. It wound up with the money gone and the company's workers on the unemployment line.
Congressional investigations are a Republican perk that derives from controlling the House of Representatives. The issue goes to the heart of the debate between competing political philosophies on who chooses where to invest- government or free market.
When the Democrats controlled both houses of Congress in 2006, the shoe was on the other foot with the collapse of Enron. That was turned into a morality play about the dangers of unregulated industry. Solyndra offers a reverse morality play about politically motivated favoritism and the absence of due diligence by the government that is trying to demonstrate the success of its economic policy.
An economic scandal is a political silver bullet. People can argue about taxation and immigration. But waste and sleaze are the converse of motherhood and apple pie – nobody is going to embrace it. When juicy sub-plots about law firms reaping millions of dollars on the loan packages and a business tossing out money right and left on extravagances is added, one can see why the Republicans are going to milk this to election time.
They are also zeroing in on an arrangement made by the government that gives priority to venture capitalists over the taxpayers when it comes to repayment of the loan.
"The Committee members are greatly concerned that, despite concerns over the company’s financial viability, the Obama administration still restructured Solyndra’s loan in February 2011, putting the venture capitalists at the front of the line, ahead of taxpayers, in the event of bankruptcy, which was in violation of the plain letter of the law."
The Republicans would like to prove that the Department of Energy in the Office of Management and Budget had been pressured to complete their review ahead of a September 4, 2009, groundbreaking event at Solyndra’s manufacturing facility. This was an event that featured an appearance via satellite by Vice President Biden.
Darrel Issa, Chairman of the Oversight and Government Reform Committee, will also be investigating the Solyndra debacle. Issa said his committee was exploring the possible conflict of interest involving members of Congress or White House staff who "select companies eligible for subsidized government loans when those companies could give campaign donations."
This is a broad hint at the role of George Kaiser, a major Obama fundraiser in 2008, and an owner of Solyndra.