Federal financial experts weren't consulted on a half-billion federal loan to a failed solar company until the last minute, and only then had "about a day" to complete their review, an internal watchdog concluded Wednesday.
The report from the Treasury Department's inspector general found that the department's review was "rushed" and began only after the Energy Department was poised to sign off on the terms of a $528 million loan to Solyndra Inc. The review was completed a day before Energy issued a press release saying it was approving the loan with conditions.
Treasury officials complained to the White House that regulations governing federal loan guarantees say that the department should have been involved earlier in the process, but the inspector general said it was unclear whether the review's late start violated the law.
Treasury officials also told investigators that the shortened time frame was sufficient to review the loan. But investigators found no evidence that concerns raised by those officials, such as the debt-to-equity ratio in the project, were ever addressed by the Energy Department.
The investigation is the latest to look closely at the Obama administration's decision to back Solyndra. Congress also is examining the deal, which was used to showcase the economic stimulus bill's support for renewable energy projects and so-called green jobs.
Solyndra was the first renewable-energy company to receive backing from a loan program created by the stimulus bill. But last year it declared bankruptcy and laid off more than 1,000 people.
The company's implosion and revelations that it received preferential treatment from federal officials have become an embarrassment for the Obama administration and a focal point for GOP criticism of the president's green-energy agenda.
While the Energy Department approved the loan, and taxpayers were on the hook when it failed, the Treasury Department's Federal Financing Bank was the entity that actually disbursed the money.
Internal emails obtained by the inspector general suggest that Treasury officials' concerns at the time the loan was granted were dismissed in order to get it out the door.
"DOE says their hands are tied on this issue...They are under pressure to complete a deal," one email read.
Another said: "We pressed on certain issues...but the train has really left the station on this deal."
Rep. Cliff Stearns, R-Fla., and Rep. Fred Upton, R-Mich., two Republicans leading the congressional investigation into the Solyndra loan, issued a joint statement Wednesday saying that the report shows "Solyndra was a bad bet from the beginning that was rushed out the door while every red flag was ignored."
Emails obtained by Republicans on the House Energy and Commerce committee last year showed that the Treasury Department was also concerned that a later restructuring of the Solyndra loan could violate federal law. The loan was restructured in February 2011 so that private investors moved ahead of taxpayers for repayment on part of the loan in case of a default.
Administration officials have defended the loan restructuring, saying that without an infusion of cash, Solyndra would likely have faced immediate bankruptcy, putting more than 1,000 people out of work. Even with the federal help, Solyndra closed its doors Aug. 31, 2011, and let all its workers go.