Energy Loan Chief Quits over Solyndra
Policy + Politics

Energy Loan Chief Quits over Solyndra

The head of the Energy Department’s embattled loan program announced Thursday that he was stepping down amid an expanding probe of the agency’s $535 million loan to a now-shuttered solar company.

The departure of Jonathan Silver comes as the Obama administration faces intense pressure from Capitol Hill about whether it properly vetted the solar start-up Solyndra before providing it with taxpayer backing. President Obama used a Thursday news conference to credit agency officials with using their “best judgment” in approving the loan, part of a $35.9 billion federal effort to invest in breakthrough technologies that could create jobs and spur economic growth.

Silver had been criticized by Republicans during a House subcommittee hearing three weeks ago, and White House e-mails released this week showed that officials were anxious about the loan program and whether the agency was properly monitoring it. Silver’s boss, Energy Secretary Steven Chu, has accepted responsibility for the Solyndra decisions.

Energy officials said Thursday that Silver decided to leave the job in July, recognizing that funding for the program was expiring. His office handed out an additional $4.7 billion in loan guarantees on Sept. 30, the last day of the program.

In a statement, Chu praised Silver’s performance. “Because of my absolute confidence in Jonathan and the outstanding work he has done, I would welcome his continued service at the Department, but I completely understand the decision he has made,” Chu said.

Leading Republicans on the House Energy and Commerce Committee said that Silver’s resignation did not address their concerns that other problems may lurk among 38 other projects the program has funded. They described “Mr. Silver’s mad rush” to approve additional federal loans just hours before the Sept. 30 deadline to close such deals.

Rep. Cliff Stearns (R-Fla.), chairman of the subcommittee investigating Solyndra, and Rep. Fred Upton (R-Mich.), the committee chairman, said in a joint statement that they were alarmed by the president’s comment Thursday that risk is inherent in backing start-up companies. “For every success there may be one that does not work out as well,” Obama said in his midday news conference.

“Does the Obama Administration now expect that half of these companies will fail?” the Republican lawmakers asked. “American taxpayers are already on the hook for the half billion dollar Solyndra bust — what other shoes does this Administration expect to drop?”

Solyndra, the first company to win an energy loan guarantee from the Obama administration, closed up shop Aug. 31 and left 1,100 employees out of work. Silver and other administration officials received numerous warnings about the company’s worsening finances but continued to help the firm in the hopes that it could be rescued.

The White House e-mails show Obama’s most trusted and senior White House aides discussing Solyndra’s shaky finances and fears that the loan could be a political embarassment. One e-mail suggested that the energy department appeared “ill-equipped” to make good bets on companies.

Republican lawmakers have alleged the administration rushed approval because its leading investors were tied to a major Obama fundraising bundler, George Kaiser. White House officials have said all decisions to approve the loan were based on the merits and made by career staffers. Kaiser has said he had nothing to do with the loan.

Silver, a former venture capitalist who joined the energy department in November 2009, faced a grilling from Republican lawmakers about whether his office ignored red flags about Solyndra. Silver arrived a month after the Solyndra loan — which originated in the Bush administration — won formal approval. He remained the administration’s point person.

Lawmakers asked Silver who specifically decided to approve the Solyndra loan, and he said he wasn’t in the program at the time.

“No one in the federal government is responsible for half a billion dollars in taxpayer dollars,” Rep. Tim Murphy (R-Pa.) shouted, cutting off Silver. “This is an incredible organization you work for. . . . What do you do for a living?”

Silver also was criticized for agreeing in late 2010 to help continue payments to the cash-strapped company. With Chu’s approval, Silver had worked with the company earlier this year to refinance the loan to help the company avoid collapse. The refinancing allowed the company to receive an additional $67 million in loan installments.

Silver agreed that investors who provided an additional $75 million would be repaid before taxpayers if the company folded. He said such an arrangement was standard in the venture capital world.

A day after the hearing, Stearns told the Fox Business Network that Silver should be fired.

Silver, who co-founded Core Capital Partners, a venture capital firm specializing in alternative energy technology and advanced manufacturing, was often bullish about the program’s portfolio.

In an April interview, just two months after Solyndra’s emergency restructuring, Silver said that Solyndra was “going in the right direction” by increasing solar panel sales.

“This is a company that doubled their revenues and essentially doubled them again, year over year,” Silver told the trade publication SNL Renewable Energy Weekly. “It’s not as if this is some kind of start-up that is not working.”

Staff writer Joe Stephens contributed to this report.