When he testifies before a U.S. House committee today, Energy Secretary Steven Chu plans to keep defending his agency's politically tainted decision-making in managing a $535 million federal loan to the now-closed solar panel maker Solyndra. Instead, Chu should acknowledge the integrity of the process was corrupted and resign. The Obama administration should be held accountable for ignoring warning signs that Solyndra was failing and for recklessly investing public money for political gain — and the energy secretary is a good place to start.
Chu contends in remarks prepared for today's hearing that "the loan guarantee to Solyndra was subject to proper, rigorous scrutiny and healthy debate during every phase of the process." The emerging public records tell a different story, and they reveal the panic within the administration last year as the company faltered and was desperate for cash. The Washington Post reported Wednesday that after Solyndra officials warned the Energy Department of pending layoffs in October 2010, Energy officials urged that the layoffs be delayed until after the midterm elections in November. They also promised that the next installment of the federal loan money would be delivered. The House Energy and Commerce Committee should ask Chu today for an explanation, because there is no credible defense.
The 2009 loan to the California solar panel maker was touted by Obama and Chu as a worthwhile effort to develop alternative energy resources such as solar power. In fact, it was a rigged deal put together in haste to garner quick headlines and to benefit political friends and donors to Obama, such as billionaire George Kaiser, whose private equity firm arranged the Solyndra largesse.
To be sure, some developments were out of the administration's control. Market forces created a decline in the price of silicon, the European debt crisis reduced demand for solar panels and China entered the solar energy market with lower costs. Solyndra's prospects quickly dimmed. But Obama and Chu could have been honest with taxpayers, acknowledged that Solyndra was a bad investment and limited the risk. Instead, the administration attempted to stage-manage the crisis through disinformation, misdirection and denial, making a bad situation worse.
For its lack of due diligence in rushing the Solyndra deal to its disastrous conclusion, the Obama administration is saddled with a classic Washington scandal of its own making. Chu, a respected 1997 Nobel Prize laureate in physics, has seen his stellar reputation tarnished and should resign.
This is the sort of Washington debacle that fuels distrust of government in groups as diverse as tea party followers and "occupy" protesters. It reinforces the notion that the fix is always in for deep-pocketed corporate insiders. Neither political party is immune to such insider dealing — or the urge to deny and obfuscate when the excesses are exposed.
In this case, there also is collateral damage. The Solyndra debacle is a setback for much-needed research and investment in solar power and other alternative energy resources. The next big public investment is likely to face more politically motivated criticism, regardless of its merit. Obama should force Chu out if the energy secretary refuses to resign, and the president should take full responsibility for his administration's failure to act responsibly in this case before its credibility erodes any further.