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Energy Department official says agency overwhelmed by loan program

November 02, 2011|By Alexa Vaughn, Washington Bureau
  • FBI agents exit Solyndra headquarters in Fremont, Calif.
FBI agents exit Solyndra headquarters in Fremont, Calif. (Paul Morris / Bloomberg )

Expecting $35.2 billion funneled through the Department of Energy to stimulate the economy was like screwing a lawn hose onto a fire hydrant, said DOE Inspector General Gregory Friedman on Wednesday.

"It's been equated to attaching a lawn hose to a fire hydrant. The infrastructure—both at the federal, state and local level—simply was not there to accept the burden," Friedman told the House Oversight and Government Reform Committee.

He added that the under-resourced department faced a series of logistical obstacles in delivering money to companies such as Solyndra, which filed for bankruptcy in September after receiving a $528-million government loan.

"The concept of 'shovel-ready' projects was not realized, nor, as we now have confirmed, was it a realistic expectation," Friedman said.

Even after department employees strained to quickly dispense loans that were not properly documented, Friedman said only 45% of the money allotted to DOE under the stimulus law has been spent. He attributed the inefficiency and slowness of loan distribution to a "diverse, complex, and often asymmetrical set of stakeholders," which included state and local officials, contractors and businesses.

Friedman said he could not comment specifically on the ongoing Solyndra investigation, but did say his office has launched more than 100 investigations of stimulus-funded companies that have recovered $2.3 million and resulted in five criminal prosecutions.

Friedman's testimony bolsters Republicans' claim that Solyndra's demise is proof of how economically wasteful the Obama administration's stimulus plan has been.

Friedman's  testimony about the DOE administering of stimulus funds comes as the Koch brothers' Americans for Prosperity PAC started airing over $2.4-million worth of ads slamming the Obama administration's backing of Solyndra. The ads will air over the next two weeks in presidential election swing states Florida, Michigan, Virginia and New Mexico.

On Thursday, House Energy and Commerce Committee Republicans are expected to vote on issuing subpoenas for internal White House communications about Solyndra. Several Republicans believe the Obama administration was involved in rushing a loan to the company, possibly because one of its shareholders is a big Obama campaign fundraiser.
 
The Obama administration denies giving the company any preferential treatment and says that only DOE officials vetted the company’s loan application.

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