House GOP: Chu pushed for solar loan to help Solyndra

The Prologis inquiry marks the next stage of House Republicans’ ongoing Solyndra investigation. Friday marks the one-year anniversary of the committee’s probe.

The Energy Department issued a conditional loan commitment to Prologis in June 2011 and finalized the Prologis loan guarantee in September of 2011.

The GOP lawmakers allege that Energy Department officials championed the Prologis loan guarantee in hopes of improving Solyndra’s increasingly dire financial situation.

“The Project Photon agreement was critical for Solyndra as it struggled to improve its financial condition after the first restructuring,” the letter says. “According to Solyndra’s estimates, finalizing the sales contract would have allowed Solyndra to meet its sales projections for the second half of 2011.”

Project Photon made up about 20 megawatts of Prologis’s 750-megawatt rooftop solar project vying for a loan guarantee. By the time the Energy Department finalized the loan guarantee, Solyndra was no longer a supplier for the project.

The Energy Department strongly rejected Republicans’ allegations, insisting
that Chu’s support for the project had nothing to do with Solyndra.

“Secretary Chu strongly supported Project Amp because it will be the largest rooftop project in U.S. history and is expected to generate enough clean, renewable electricity to power over 88,000 homes while supporting at least a thousand jobs all across the country,” department spokesman Damien LaVera said in a statement.

LaVera took aim at committee Republicans.

“As has consistently been the case in course of this committee’s year-long political investigation, critics of our effort to support innovative, job-creating clean energy projects will say anything to distort the record,” he said.

The letter cites a June 17, 2011, email from a Solyndra employee who was relaying what he had been told by an investment banker working on the Project Amp loan guarantee negotiations. The letter appears to suggest that Chu personally advocated for the Prologis loan guarantee.

“[O]n three occasions this week he thought that the [Project Amp] deal was dead, but Secretary Chu personally pulled it off. Chu shared with the team that this deal went to higher levels in the Obama Administration to gain approval than any other transaction in the Loan Guarantee Program, and that he personally committed to seeing it through to a successful conclusion,” the email said.

In addition, committee Republicans say that approval of the Prologis loan guarantee was one of the factors involved in a decision about whether to restructure the Solyndra loan guarantee for a second time.

“In mid-August 2011, DOE was urging Argonaut Ventures, Inc. (Argonaut), Solyndra’s largest investor, to inject additional money into the company so that it could stay in business while DOE and Solyndra determined if there was a way to restructure the company for a second time,” the letter says.

“While these discussions took place, Solyndra was also negotiating with Prologis the terms of the agreement to supply panels for Project Photon, the first phase of Project Amp.  The Project Photon agreement was critical for Solyndra as it struggled to improve its financial condition after the first restructuring.”

A February 2011 agreement to restructure the Solyndra loan ensured that private investors who agreed to inject more money into the project would be repaid before taxpayers. But the Energy Department ultimately decided not to restructure the Solyndra loan for a second time.