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Wednesday
Sep142011

Solyndra Loan: Now Treasury Department Is Launching Investigation

David Paul Morris/Bloomberg via Getty Images(WASHINGTON) -- The Treasury Department's inspector general has opened a new front in the investigation of the government loan to Solyndra, the now-bankrupt company that had been touted as a model of President Obama's ambitious green energy program, ABC News and the Center for Public Integrity/iWatch News have learned.

The new probe involves the $535-million loan, arranged by the Energy Department, but actually processed by the Federal Financing Bank, a government lending institution that falls under Treasury's control. Already, the FBI and the Energy Department's inspector general have executed search warrants at Solyndra's headquarters and questioned company executives.

"We're going to look at everything the FFB had to do with its role in this thing," Rich Delmar, a spokesman for the Treasury Department's inspector general, told ABC News and iWatch News.

Word of the broadening probe came as the head of the Energy Department's loan program came before Congress at a contentious hearing on Capitol Hill Wednesday.

After spending months touting the Obama administration's decision to loan $535 million to Solyndra, top officials took a new tack Wednesday while testifying about the company's abrupt shutdown and bankruptcy: the loan, they said, was actually the Bush administration's idea.

The Energy Department's top lending officer told Congress that the Solyndra loan application was not only filed during President Bush's term, but it surged towards completion before Obama took office in January 2009.

Even after the loan was restructured in 2011, the Energy Department and other administration officials continued to tout Solyndra's prospects.

In May, Silver told ABC News and iWatch News that questions about the loan guarantee were unfounded, and that Solyndra's canceled public offering and restructuring were hiccups that are typical for startup companies.

Republicans pushed back hard against this version of events, unearthing internal Energy Department emails that indicate the panel evaluating the loans had made the unanimous decision to shelve Solyndra's application two weeks before Obama took office.

As the hearing was underway, the Department of Energy was sending out emails to the press intended to convey that Solyndra was a bipartisan problem.

"At several points in the hearing, folks have pointed out the party affiliation of the private investors who lost a billion dollars of their own private capital on this deal," wrote Dan Leistikow, the department's director of public affairs. "Of the two major investment firms who risked and lost the most, one happens to be associated with a Democratic donor and one with a Republican donor. I frankly can't understand what that has to do with anything, but I suppose it's always good to see a little bipartisanship."

But Rep. Cliff Stearns, a Florida Republican, made note during the hearing that "the administration officials held out the company as a shining example of how the stimulus was creating jobs and invigorating the economy."

Indeed, when the loan was announced in March of 2009, Energy Secretary Chu issued his own press release, identifying Solyndra as "part of President Obama's aggressive strategy to put Americans back to work and reduce our dependence on foreign oil."

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