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Energy official under fire over Solyndra loan steps down

October 06, 2011|By Neela Banerjee | Washington Bureau
  • Jonathan Silver during a break in the House Energy and Commerce Committee hearing Sept. 14 on Energy Department loans made to Solyndra.
Jonathan Silver during a break in the House Energy and Commerce Committee… (Andrew Harrer / Bloomberg )

The director of the controversial Energy Department lending program that guaranteed a $535-million loan to the now-bankrupt solar equipment maker Solyndra stepped down from his post Thursday, administration officials confirmed.

The announcement of the departure of Jonathan Silver came hours after President Obama defended the program during a news conference, asserting that it helped new technology companies compete with heavily subsidized rivals in Europe and China.

The Energy Department said Silver had told Secretary Steven Chu earlier in the year that he planned to leave his post when it became clear the loan program had finished its lending in late September.

"In early July, shortly after the fiscal year 2011 budget was completed by Congress and it became clear that no significant new funds were included for the loan program, Jonathan Silver informed me that he intended to return to the private sector shortly after September 30, the statutory end-date of the 1705 loan guarantee program," Chu said in a statement.

"Since he joined the Department in November 2009, Jonathan assembled and managed a truly outstanding team that has transformed the program into the world leader in financing innovative clean energy projects."

Silver took his post in November 2009, after the program had approved the loan guarantee to Solyndra, its first since the lending initiative began in 2006. By late 2010, Solyndra was faltering. Earlier this year the company asked the Energy Department to restructure its loan, and by early September it had closed its doors, laid off almost all its 1,100 workers, filed for Chapter 11 bankruptcy protection and become the target of FBI and congressional investigations.

During congressional hearings, Silver took much of the heat for the program's support of Solyndra and its subsequent decision to restructure the loan in a way that placed the federal government behind other investors in recouping its financial stake in case of a bankruptcy. Some congressional Republicans demanded Silver's resignation.

But the administration was quick to assert Thursday that Silver's resignation was not in response to congressional demands.

Under Silver, the program backed loans "supporting 38 projects that are expected to create or save more than 60,000 jobs — including 44,000 that have already materialized," the Energy Department said.

The program has given out more than $35 billion in loan guarantees, and Solyndra so far is the only recipient to fail.

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