White House Orders Review of Energy Department Loans in Wake of Solyndra Scandal

The White House has ordered a review of the Energy Department's loan guarantee program in the wake of a growing controversy over Solyndra, a California-based solar company that went bankrupt after receiving a $528 million federal loan.

Congressional Republicans have been investigating the bankruptcy of Solyndra Inc. amid revelations that federal officials were warned it had problems but nonetheless continued to support it. The House Energy and Commerce Committee could vote as early next week to subpoena White House records related to the loan.

White House chief of staff Bill Daley says the new independent review will evaluate the condition of other loan guarantees made by the Energy Department and make recommendations to the administration about how to improve the process. There are more than two dozen of these to a variety of clean energy companies.

"The president is committed to investing in clean energy because he understands that the jobs developing and manufacturing these technologies will either be created here or in other countries," he said. "And while we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars."

Daley said he's tapping Herb Allison, a former Treasury official, to conduct the 60-day review. Following the review, Allison will issue a report to the administration.

"I look forward to getting to work examining the Energy Department's loan portfolio," Allison said. "This administration clearly recognizes the challenges and opportunities that coexist with these programs. My goal is to assess the current financial state of the portfolio and to ensure effective monitoring and management of the loan portfolio going forward."

Energy Secretary Steven Chu defended his department's work in a statement released Friday evening.

“Our loan programs are putting thousands of Americans to work and helping our country compete in the global race for the clean energy jobs of the future," Chu said. "We are committed to aggressively competing for those jobs and industries, while also being responsible stewards of taxpayer dollars.

"I welcome this review of the overall health of the department's loan portfolio and have directed my staff to make sure that the department provides all necessary assistance and information to Mr. Allison that the review is as thorough and productive as possible. I look forward to working with Mr. Allison as he conducts his review and recommends further steps to ensure that the Department is protecting the interests of taxpayers."

Meanwhile, Reps. Fred Upton, chairman of the House Energy and Commerce Committee, and Cliff Stearns, chairman of the Subcommittee on Oversight and Investigations, announced Friday that the panel would vote Thursday to consider a resolution authorizing the issuance of a subpoena for internal White House communications related to the Solyndra loan.

"Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration's stonewall on Solyndra," they said in a statement, accusing the administration of not cooperating since the committee launched an investigation more than eight months ago.

"What is the White House trying to hide from the American public? It is alarming for the Obama White House to cast aside its vows of transparency and block Congress from learning more about the roles that those in the White House and other members of the administration played in the Solyndra mess," they said.

"American taxpayers who are now saddled with a half billion dollar I.O.U. to Uncle Sam deserve to know the truth behind Solyndra," they added. "We remain committed to uncovering the facts in an even-handed way, and maintain some hope that the White House will change course and begin to cooperate."

The Associated Press contributed to this report.