Hatch: Don’t let small-business fund be another Solyndra

{mosads}”Since it has taken nearly 90 days for $2.4 billion to be allocated, it seems difficult to comprehend how the remaining $9.4 billion that has been applied for could be approved and disbursed in just six days,” he wrote.

As the Treasury works to get those dollars out the door, the senator noted that a previous administration initiative makes an “illustrative” case for caution — the $535 loan guarantee Obama administration officials approved for the now-bankrupt Solyndra.

The California solar company has come under fire for declaring bankruptcy in late August and laying off 1,100 workers. The Justice Department is now investigating the firm, and top company officials plan to invoke the Fifth Amendment when appearing before a congressional panel Friday. Republican lawmakers have accused the administration of rushing the guarantee and failing to properly vet the company.

“The possibility that a major government loan review was improperly rushed due to political pressure is illustrative of the danger to taxpayers when procedures and reviews are accelerated or altered to achieve political ends,” Hatch said. “I am sure that you would agree that careful and routine evaluation of these applications should occur before taxpayer dollars are lent to private businesses.”

Previously, Geithner actually came under fire from both parties for how long it was taking to get the program up and running. He defended the slow pace as necessary to ensure the funds were being distributed prudently to qualified banks.

Hatch promised he would be keeping a close eye on the performance of banks that participate in the fund, especially given that the only revenue the government gets comes from bank divided payments. And since a bank is not obligated to repay a missed dividend payment, Hatch argued they were “essentially optional” and he will be looking particularly closely for cases of missed payments.

“I expect that Treasury officials will ensure that rigorous evaluations of SBLF applicants do not diminish during this final decisionmaking week. I would suggest that discretion is the better part of valor in this instance,” he said.