DOE refuses transparency for billions of taxpayer dollars spent on loan guarantees

Washington, D.C. – The Energy and Oversight Subcommittees today held a joint hearing to examine the market impact and risk associated with the Department of Energy’s (DOE) controversial program to provide federal loan guarantees to private energy companies to pursue new technologies.

Energy Subcommittee Chairman Randy Weber (R-Texas): “Instead of the private sector taking on risk to fund scale-up of new technology, the government steps in, risking federal dollars on the hopes for success of energy projects. DOE loans and loan guarantees have been overwhelmingly awarded to subsidiaries of large companies, or companies with high profile private investors who jump at the chance for government security. But if something goes wrong, these big companies aren’t stuck with the bill – the America people are.”

According to Government Accountability Office (GAO) estimates, the total cost for the current loan portfolio is $2.2 billion. As a part of the stimulus in 2009, Congress temporarily expanded the loan guarantee program, and gave DOE another $2.4 billion to subsidize the costs of loan guarantees.  DOE rushed loan applications and caved to political pressure from the White House, issuing $16 billion in loan guarantees to 26 projects, including to the solar energy company Solyndra, which defaulted on a $500 million loan guarantee.

Testifying today, Mr. Nick Loris, a senior fellow at Heritage Foundation, compared the program to flipping a coin - either the investor wins or the taxpayer loses.

Oversight Subcommittee Chairman Barry Loudermilk (R-Ga.): “Several years into this experiment, it is becoming clear these efforts have wasted vast sums of taxpayer dollars, and yet in August 2015 the president announced that the DOE Loan Program Office would make an additional $1 billion in loan guarantees available for commercial scale distributed energy projects.  This committee welcomes and embraces new businesses and technologies with open arms, but it is important that these technologies be brought to commercial scale by market forces, not political whims.”

The former Loan Program Office Director, Jonathan Silver, has faced harsh criticism from Congress for using a personal email account to conduct official business and intentionally circumvent the Federal Records Act.  Mr. Silver also used his personal email account to lobby White House officials to quickly and cavalierly approve loan guarantee projects based on their political impact, rather than financial merits.

Members today asked the new executive director of DOE’s Loan Program Office, Mark McCall, if he would commit to a higher level of transparency and provide the Science Committee with email communications surrounding loan decisions. Mr. McCall was unwilling to commit to provide these documents, which would expose how decisions are made concerning billions of taxpayer dollars. 

In the case of Solyndra, emails and other communications were essential to demonstrate the political machinations of this White House.  DOE continues to obstruct the Science Committee’s important oversight work. 

The following witnesses testified today:

Mr. Mark McCall, Executive Director, Loan Program Office, U.S. Department of Energy

Dr. Frank Rusco, Director, Natural Resources and Environment, Government Accountability Office

Gregory Kats, President, Capital E

Mr. Nick Loris, Herbert and Joyce Morgan Fellow, Thomas A. Roe Institute for Economic Policy Studies, Heritage Foundation


For more information about today’s hearing, including witness testimony and the archived webcast, please visit the Committee’s website.