House panel looks at Solyndra loan restructuring
WASHINGTON (KGO) -- A Republican-led committee in the House is looking at why the Solyndra solar panel manufacturing company in Fremont went broke after receiving a $500 million federal loan.
There was a lot of shouting today about a deal that put private investors ahead of taxpayers, a deal that was made to try to keep Solyndra from going under.
In a nutshell, Solyndra got into trouble when the price of competitive panels fell due to a drop in the raw material for those panels. In the wake of the world wide recession, demand for solar panels also dropped.
Solyndra was losing money, and fearing it would go under, the company asked the government to restructure its $500 million loan.
"When the government confronted this problem, they looked to see how they were going to save this loan," said Rep. John Dingell, D-Mich.
At Friday's hearing, Dingell pointed out the Department of Energy agreed to restructure the loan if Solyndra would raise another $75 million.
Solyndra did raise the money, but only by promising the investors that they'd be the first to be repaid ahead of tha taxpayers. Republicans on the committee said that agreement violated federal law.
"(The) Department of Energy made a bad loan," said Rep. Morgan Griffith, R-Va. "They realized they made a bad loan. They were trying to figure out a way to cover up the fact, not that they'd done anything illegal, but cover up the fact that they'd made a bad loan and they went and broke the law."
Democratic members say it's not that clear, that the law protecting taxpayers applies only to terms of the origianl loan and the restructuring was necessary to try and save the company from collapse.
solyndra, solar energy, business, mark matthews
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