The Department of Energy’s Secretary Steven Chu green-lighted ongoing financing for the now-bankrupt solar panel maker Solyndra even after the department learned that Solyndra had technically defaulted on its loan in December, according to a report in The Washington Post.
Department spokesman Damien LaVera said in a statement that the logic behind the move was to give the company “the best posible chance” at being able to go on to pay back the loan.
The Republican-controlled House Energy & Commerce Committee has been investigating the conditions under which the Obama administration awarded Solyndra the $535 million loan guarantee.
Though House Republicans and others have blamed the administration for awarding the loan guarantee to a company with such a high risk profile, and leaving taxpayers on the hook for the money, DOE has pointed out that the legislation that established the loan guarantee program assigns a form of “insurance” to each loan. That means that a pot of money has been already been put in reserve for each loan guarantee made, and in case of default gets paid back to the Treasury if and when the company defaults.
