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tv   Tonight From Washington  CSPAN  October 14, 2011 8:00pm-11:00pm EDT

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reduced to five minutes. that's fine. >> thank you, mr. deputy speaker. to be honest, much the debate about the use of hand-held devices which i know was called held-hand devices. i don't know what a device would look like. [laughter] but it reminds me of the orthodox church in november 1917 when the revolution was gathering around them debated whether they should wear black or purple vests to funerals. the trust is the horse has both. as you see around the chamber at gold smith and at the others and the at devises, no, devices, they use them tweeting on a regular basis, and that creates and many others as well are saying -- [laughter] well, i will give way to the
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honorable gentleman even though i was named the most influential mp on twitter, the general leading the other side, even so, i'm most concerned to get on to the next business before i am slayed alive by my constituents constituents.. ..
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opening itself up to the public. indeed, in 1376 we first decided that we would ensure that there was secretly that nobody outside me what was going on in nigeria. i took many, many centuries to get rid of the oath of secrecy, which is why john wilkes and it had been expelled from the house of commons on four occasions, had to be reelected and only eventually was allowed to deal to publish what went on in his house. i would just say to the honorable member countries that the question of being dinosaurs or anything else. it's about opening parliament debt to the wide world around us so they can understand everything going on here in the way that they have their lives, not for a convenient, but for a constituent. when i was elected in 2001, the vast majority to make teachers got in touch with me and my
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coming to a constituency surgery. the vast majority get in touch by facebook, twitter, e-mail. sometimes even by text. and i think we should be making that more possible for her constituents rather than more difficult. incidentally, i wholeheartedly agree with tmp when he said earlier and that his chambers should have proper wi-fi available so that people will be able to engage in this properly. i disagree with the honorable member from wiltshire when he said it's only urgent messages that should be dealt with. how on earth -- to america's going to decide what is an urgent message? i think it's my constituency should be deciding. if he doesn't mind, i don't give way because i think others want to get on to another debate. now i can see -- i have the picture of the speaker coming over to nondurable member demanding to see what there last tweet message was, just make sure that people are behaving
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properly. but i say to him that he just has to listen to what our constituents are far more interested in. and the members said how inappropriate it would be if facts were brought to bear debate. it may be i feel him smiling. maybe we should be abolishing the officials asked the ministers have to rely on their own when it an intelligence. and wouldn't it be a good idea if erskine may was available online instead of people having to buy a copy so people could refer to it in the chamber. and i want to respond to a couple points the honorable member made because i know she's absolutely sincere in wanting to make the way we do our business more intelligible to people, but i do have a concern about the issue of explanatory amendments because explanatory amendments i want to know quite how they stand in relation to the law if that amendment is then carried.
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i think there is a danger in preceding down that route. and in addition, i would have thought that the whole point was to say what the amendment then and just accepting it for the honorable member who presented it that i don't think what exists. i'm going to try not to because i want to be circumvented. finally, mr. deputy speaker, i look for it to the day when we have roger gale mp and for that matter, 16th century mp or maybe how they call it to point out that the honorable member who's not in his feet that one of his constituents have made me this afternoon to ask him to bring a history of your account so that his constituents can get in touch with them better. >> the question may now apply. >> the question is does many of the opinions they aye.
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the ayes have it. the question is as many as that opinions they aye. let the no.
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>> south korean president lee's trip to the u.s. continue today with a trip to michigan. he and president obama toured a general motors plant is the two company factory workers. these commented on the u.s. south korea free trade agreement approved by congress earlier this week. from lake orion, michigan, this is half an hour.
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[inaudible conversations] chair mark [cheers and applause] [cheers and applause] [cheers and applause] >> hello, detroit! hello. everybody please have a seat. it is great to be back in the motor city. [cheers and applause] i noticed the mood is a little brighter on this particular visit. i would like to think it's because everybody is excited about the korea free trade agreement, but i suspect it might just have a little bit to
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do with your lion speeding up on my bears. [cheers and applause] don't get carried away now. not to mention your tigers hanging in there last night. [cheers and applause] as you can see, president lee has a pretty good politician. [applause] she knows how to get on your good side. [applause] today i brought a good friend and one of our closest allies, president lee of south korea. some of you may know presidentially has a remarkable story. he grew up in little ways from detroit, but he embodies that same spirit that detroit is all
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about. through sheer grit and determination, he worked his way from the humblest beginnings in south korea of his childhood was an extraordinarily poor country. but he worked his way up, went to school while claiming street and eventually went on to run a hyundai machinery plant, so he knows a little bit about cars. then, the whole company. and ultimately was elected the president of the republic of korea. and this is a country that staged one of the world's greatest economic comebacks that we've ever seen. so president lee knows what it's like to go through tough times. he knows what it's like when folks have counted you out. and he knows what it's like can make a big comeback.
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so with that, i want to welcome president lee to detroit to have them say just a few words. [cheers and applause] [cheers and applause] >> thank you. [speaking korean] >> translator: folks, a little bit shorter than president obama, so i'm going to adjust the microphone. i hope you understand. that 10 [speaking korean] >> translator: first of all,
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ladies and gentlemen, it's a great pleasure of visiting your site or here in detroit along with one of my closest friends, president obama. [speaking korean] [speaking korean] >> translator: folks, as you know, the global economy is going through some tough times and said there is mounting on the minds of those president obama and i invite his jobs. it is about creating good decent jobs and keeping those jobs. and this is what keeps us awake. [applause] [speaking korean] [speaking korean]
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[speaking korean] >> translator: ladies and gentlemen, before i came to see you, i get briefed you were given to me that the members factory and i heard about the history and the danger of how this factory was on the brink of being closed. but now as you can see, we have so many people like all of you working here earning a good living and more than anywhere dearness that tree, president obama who is the happiest man to see this fact very. [cheers and applause] [speaking korean] [speaking korean]
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[speaking korean] [speaking korean] [speaking korean] >> translator: ladies and gentlemen, three years ago i first met with president obama and back then i still remember how we talked about a lot of things and one of the things on president obama's mind was how to recite the u.s. automotive industry. because we all know the u.s. automotive industry was in its leader in the world and president obama listed there and nobody can do to revive motor city motor city in the native date that a industry.
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we typed a lot about that. folks, i know a few things about automobiles because a mess in the dirt used to build cars myself. i know a thing or two about automobiles and perhaps this is the reason why president obama raised the subject. we talked about how to revise the u.s. automobile industry. [speaking korean] [speaking korean] [speaking korean] >> translator: ladies and gentlemen, president obama briefly talked about my past i worked hard throughout my life and i was once just like you. i did work in factories and i was also in the boardroom as well as ceo of one of the largest companies in korea.
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one thing i learned throughout my experience in my life in space, during times of challenges, when you are faced with difficulties and when you want to create good jobs and maintain its good jobs, there's only one thing. the surest way to do that is for the workers and managers to work together. it is about cooperating together and that is the surest way to ensure a good job and for you to keep your job. [applause] [speaking korean] [speaking korean] [speaking korean] [speaking korean]
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[speaking korean] [speaking korean] >> translator: and ladies and gentlemen, we are here with president obama because when i was a worker, i knew that more than anything for all of us to enjoy good life is for all of us to have a good decent job. and i know how important it is for anyone to have a good decent job. and the factory here as i was looking around, i felt once again how important it is for all of us to work together because i know three years ago, gm korea and jury on orion work together to set this factory and today you are building models here in manufacturing cars that for three years ago, gm, korea and your company has been working together. that is the reason why came here to see with my own eyes the good
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work all of you are doing here. [applause] [speaking korean] [speaking korean] [speaking korean] [speaking korean] [speaking korean] >> translator: folks come on now is president and became president of korea i visited gm factory korea not once but twice, which is quite unusual for the president of korea to do so. but i came here today as i watched the factory and took on it to her, i was very, very and deeply impressed by the way you are operating this factory.
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i was impressed by the fact that this factory is very proenvironment. you take care of the environment. also, develop latest i.t. technology so efficiency aside. you have the highest standards in our building excellent cars and i am confident that this fact or he is going to continue and is going to make good cars in your lasso the good and i am sure and confident in the future. [cheers and applause] >> translator: lassie folks i want to say one thing before i go. [speaking korean] >> translator: as a notochord usda will soon be implemented. [speaking korean]
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[speaking korean] >> translator: i know folks some of you may think with the implementation of the train to come your jobs may be exported or go somewhere else. but let me tell you one thing. that is not true. i am here with president obama -- [cheers and applause] iem here with president obama today because i want to give this promise to you. and that is that the korus fta will not take away any of your jobs. rather, it will create more jobs for you and your family and is going to protect your jobs. and this is the pledge that i give you today. [cheers and applause] [cheers and applause]
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[speaking korean] .ton >> translator: soon folks, motor city will come back again and will revive its past glory and i have all the confidence of the world that you are going to do that. >> thank you. [cheers and applause] >> gives president lee a big round of applause. [cheers and applause] >> all right. well, thank you presently. thank you to everyone who has joined us here today. a couple of people i want to mention. first of all panacea general
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motors, dan ackerson is here. [cheers and applause] the uaw president and key people who help make the script possible. that is my dear friend, bob curt on chad curt. and my u.s. trade representative who spent a lot of long nights at this korean counterpart, robert -- ron kirk is in the house. i want to follow up with a few remarks about what the korea free trade agreement will mean for american jobs and for the american economy. you know, we became a country that was known for what we thought and what we consumed. and a whole bunch of good
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supporting here from all around the world. and we spent a lot of money and took on a lot of debt and a lot of case. to buy those goods. but it didn't necessarily produce a lot of jobs here in the united states. so when i took office, i was determined to be filled this economy faced on what this country has always done best. not just buying and consuming, but will they, making things come and find those goods all around the world stand with three proud words: made in america. [cheers and applause] and that is why one of the first x-division-sign made as president was to say the u.s. outdoor industry from collapse. [cheers and applause]
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there were a lot of politicians he said it wasn't worth the time, wasn't worth the money. in fact, some politicians still say that. well, they should can't tell that to the workers here at orion. because two years ago, it looked like this plant was going to have to shut its doors. all these jobs would've been lost and the entire community would've been devastated. in the same is communities all across the midwest. and i refuse to let that happen. [cheers and applause] so we made do with the auto companies. we said if you're willing to retool and restructure, get more efficient, get better, get
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smarter, then we are going to invest in our future because we believe in america and most importantly, we believe an american workers. [applause] and today, i can stand here and say that the investment paid off. [cheers and applause] the hundreds of thousands of jobs that have been saved made it worth it. and america not olinda street that is more profitable and competitive than it's been in years made a worth it. [cheers and applause] the taxpayers are being repaid. plans like this are turning out cars at the chevy sonnet, the only one-of-a-kind that's made and sold in the united states of america. [cheers and applause]
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and for folks who haven't tried it, you've got to sit in my car. there's a lot of room in their. even for a pretty tall guy like me. that felt pretty good. they took away the keys though. secret service would let me. now here's the thing. we live in a global economy. and that means most of the potential customers for american companies like gm won't just be here in the united states. they'll be all around the world. and the markets and services we sell abroad, the more jobs we create here at home. [cheers and applause] in fact, every $1 billion in exports support thousands of american jobs. and that's why i ace started a
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goal of doubling our exports. that's why we worked with canada and colombia as well as south korea to resolve outstanding issues with these trade agreement. and that's why push congress to pass them as soon as possible. korea is one that is critically important. because understand, korea has 50 million people. some of the fastest growing countries in the world. it's one of our closest allies and our closest friends. and presently and i talked about this when we had dinner the other night. our trade is basically balanced between the united states and korea. they buy as much stuff from us as they sell to us. and that's how fair and free trade is supposed to be. [cheers and applause]
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that's how trade is supposed to be. cannot presently doesn't mind me saying this, even though he is a hyundai guy. americans can buy a kia and hyundai's from korea and i know korea should deal to buy fords and chryslers chryslers and show these that are made right here in the united states of america. [cheers and applause] and the other thing that happened was this took a little longer than some people ask liked it because i wasn't going to scientist and a trade deal. president lee wasn't either. we had to work hard to reach another stand. it was like a scene from the gm dealership, where folks are negotiating about the heated seats and extended wordy. and you're going back and forth trying to figure out how does this fit together so it works for everybody? but when all was said and done, presently and i walked away with these trade agreement that is a win-win for both countries.
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[cheers and applause] here in the united states, this trade agreement will support at least 70,000 american jobs. it will increase exports. it will boost our economy by more than our last nine trading agreements combined. and as i said, the good thing is we've got a balanced situation. it is not just a matter of folks sending a bunch of stuff here. koreans are also buying american products. that is what makes it a win-win. [applause] and by the way, i also held out on signing this agreement to congress until they promise to renew a law called the ta a trade adjustment assistance that helps american workers who have been affected by global competitions that they are able to help transition. because of all these benefits --
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[applause] is because of all these benefits at this trade agreement won the support of business and labor. from automakers and workers, both democrats and republicans. that doesn't happen very often. and it was good to finally see both birdies in congress come together and pass legislation that is good for the american people, an agreement that will not only build on our strong economic relationship that's been existing for years to come, but also promises as we've seen in this plan, the capacity for us to exchange ideas and knowledge he is in systems, which will improve productivity on both sides. nearly a decade ago, when a korean business named daewoo motors or, as general motors
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stepped in and say that company, which is now known as gm korea. years later with the engineers and gm korea who helped make the chevy sonnet possible. and the collaboration with that company that has helped save that plant and the 17,050 jobs -- 1750 jobs. so in a larger scale, the closer economic ties between the united states and korea are going to lead for more jobs, more opportunity for both nations. already, korean investment -- [applause] and by the way, it's not just the auto industry. korean investment is creating jobs here in michigan with lg chem planning to make lithium-ion batteries at home and hyundai manufacturing suspension modules in detroit and men to opening a new research and development center for breaks and daring and novi.
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and korea, american businesses are pursuing those same investment and opportunities. so it's truly a win-win for everybody involved. so i just want to say thank you to president lee for his cooperation and for his leadership. i want to thank the members of congress to fight so hard to get this done and especially the delegation from the state. i want to especially thank the people in detroit for proving that despite all the work that lies ahead, and this is a city where great american industry is coming back to life. and the industry at the mall are taking root. [applause] and a city where people are dreaming up ways to prove all this got textron and write the next proud chapter in the motor city's history. and that is why he came here today.
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because for every cynic that's out there running around and it can be done, there's a whole bunch that are saying yes we can. [cheers and applause] times are tough -- times are tough and they've been tough for just about anyplace else. but we've made it through tough times before. we do not quit. we've rolled up our sleeves. we remember our history. it was said to ourselves, there's nothing that we cannot do when we are willing to do it together. you are all a testimony to the american spirit. these cars are a testimony to the american spirit. and if we could take that same spirit and apply it across the boards about the challenges we face, there is nothing that we cannot do. god bless you and god is the united states of america. thank you. ♪
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>> a senior treasury department official told congress he had never encountered it on restructuring plan like the one given to bank of solar manufacturing comp me, solyndra. that's been authorized by the
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federal gibran allowed private investors to be paid back before the government in the event of a default. solyndra received $535 million in loans from the government in 2009. the treasury department official, gary burner testified as part of an investigation into solyndra by house, energy and commerce committee. this is two hours and 45 minutes. >> cabinda subcommittee on oversight and investigation and i'll open with my opening statement. we convened this hearing of the subcommittee on oversight and investigation to simply gain a better understanding about the department of treasury's role in reviewing the solyndra loan guarantee, particularly with regard to the department of energy's decision to restructure the loan guarantee and subordinate taxpayers to private investors. while president abominate claims that hindsight is 2020, the facts tell a much different story.
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recent e-mails produced by the white house and omb as well as a long chain of others clearly show that numerous members of the obama administration from the senior levels in the west wing down to the career professionals and omb and d.o.e. knew that solyndra was a bad bet that was destined to fail. and while the obama administration may not have had a crystal ball, they did have financial models in august 2009 foretelling that solyndra would run out of money of september 2011. which they choose -- which they choose to ignore. in late 2010, solyndra and foreign d.o.e. that situation was dire. d.o.e. began negotiations to restructure the terms of the loud, to keep solyndra about water. under the new range mac, two primary investors, argonaut,
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madrone and the drug capital were given priority over the government with respect to the first 75 million recovered in the event of liquidation. i and other members of the subcommittee has continuously questioned the legal basis for this unprecedented decision. section 17023 of the energy policy act 2005 clearly states in plain language that would d.o.e. makes a loud, quote, the application shall be subject to the condition that the application is not subordinated to other financing, end quote. previous communication produced to the committee revealed that there were numerous concerns within the administration regarding the financial and political impact of the restructuring. what the latest round of e-mails show is that senior officials within the obama and frustration have significant concerns about its legal basis and those
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concerns were simply ignored. in august 2011, discussions about a second restructuring were underway. assistant secretary of treasury, mary miller e-mailed the direct or a violent he, jeffrey zeit stating that quote, since july of 2010, treasury has asked d.o.e. for briefings on solyndra's financial condition and any restructuring of terms. the only information we received about this has been through omb. the d.o.e. has not responded to any request for information about solyndra. she goes on to note that treasures the cocounsel believes the statute and the d.o.e. regulations both require that the guaranteed loan should not be subordinated to any loan or other debt obligations. and that in february, treasury request in writing that d.o.e. seeks the department of justice approval of any proposed
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restructuring. and that to her knowledge, that this never happened. in a closing assistant secretary miller seemed almost resigned to d.o.e.'s course of action in stating that while she expects that d.o.e. has a view about why those subordination can occur without eog approval or treasury consultation, i wanted to collect any impressions that we have acquiesced in the steps today. unfortunately, assistant secretary miller is unable to join us today to discuss your correspondence with d.o.e. or her department's role in the solyndra review. hopefully my colleagues are witnesses here today can shed some light on the decision-making process that occurred around the time of this restructuring. in fact, one of our witnesses, gary burner current chief financial officer at the treasury financial at bank also e-mailed key d.o.e. officials
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involved in the solyndra restructuring after hearing about the proposed terms of the new agreement from omb. he noted on february 10 that he understood quote, these adjustments may include subordination of solyndra's 535 million reimbursement obligation to d.o.e. and possibly the forgiveness of interest, and quote. accordingly, he raised the prospect of seeking department of justice approval, which never ultimately occurred. judging from these e-mails come in is clear that senior officials at the department of treasury were not sufficiently consulted about the restructuring had when they offered their opinions on warning signs, they were ignored like so many of the others along the way. it should be noted however that the final rule issued a d.o.e. implementing title 17 of the energy policy act specifically requires d.o.e. to consult with the secretary of treasury before
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quote d.o.e. grants a deviation that would constitute a substantial change in the financial terms of the loan guarantee agreement, and quote. there is no exception allowing d.o.e. to it nor those who disagree with this course of action. i look forward to better understanding by the department of treasury felt so strongly about being consulted prior to the restructuring of the loan guarantee and whether they believe d.o.e. violated the energy policy act 2005. with that, i recognize the distinguished colleague, ms. degette. >> thank you, mr. chairman. so what we want to know the legal basis for the subordination of this loan by d.o.e., wouldn't it be nice to have d.o.e. here? the majority has focused on an e-mail from august 20th abend in which a treasury official raises questions about whether subordination of the guaranteed loan to solyndra was appropriate
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and a treasury official expresses a view that d.o.e. is restructuring of the law may require department of justice approval. now i think it's appropriate for the subcommittee to conduct fact gathering with aiding to these documents to advance the committee's understanding of decisions relate solyndra loan guarantee. but if we really wanted to have a fact hearing, wouldn't we also bring d.o.e. and to see what they thought when treasury told them that they thought the department of justice needed to approve this loan? comments regarding ordination race definite questions about the application of the energy policy act provisions to the department of energy loan guarantee program and it's the department of energy that implements these provisions. and so the treasury e-mail does makes tob's legal rationale for restructuring decisions a
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central issue of this hearing. i don't really see how you can have this hearing just bringing one side and without the other side to respond. as i've said repeatedly, mr. chairman, i think we need to have a full and fair gathering of the facts of what happened with this solyndra loan and the restructuring so we can decide how we perceive further with solar energy and other types of alternative energy loan guarantees and other types of support. but despite this, the majority has refused the minority's request to invite the department of energy to the hearing and astonishingly the majority has even objected to the minority's request to release the february february 15, 2011 memorandum by counsel for the d.o.e. loan program that was produced in the committee. in that memo, the d.o.e. council provides a detailed analysis of their view of the subordination issue, the statutory authorities in question and d.o.e.'s position. and by the way, since february
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this year, the department of energy has also given this committee an additional 65,000 pages of documents to go through. it should go without saying that the d.o.e.'s legal analysis of restructuring should be a component of today's discussion. without the d.o.e. of the go memo sort of having our hand tied behind her back, let me just out for a minute about this memo. in an august 17, 2011 e-mail to the omb dirt, an assistant secretary of treasury expressed the view that quote, the statute and the d.o.e. regulations both require that the guaranteed loan should not be subordinate to anyone or any other debt obligation, and quote. she further notes that quote, and d.o.e. regulations state that d.o.e. shall consult with allenby and treasury before any deviation is granted from the financial terms of the loan agreement. the statute of regulation she
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appears to be referring to contain the title 17 loan guarantee program, which the department of energy interprets their implementing regulation. the department has indeed interpreted the subordination language of the statute and regulations of february 2011 that the web reference. in the department also interprets what constitutes a deviation from the title 17 rules. i'm looking forward to hearing more from the treasury today regarding that the treasury official net by our august 17 e-mail. but if we really want a full understanding of the legal arguments for subordination and whether the restructuring constituted a deviation is defined under department of energy regulations, we also need to review the department of energy memo and have the opportunity to ask d.o.e. officials about their rationale. the august e-mail further notes the treasury has suggested in february the d.o.e. consult with the department of justice
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regarding restructuring. based on the statutory provisions requires doj approval where they are compromised, communications provided to the committee showed that a conversation between treasury and d.o.e. officials occurred on this issue and february 2011. two more fully understand what happened on both sides of this issue, the committee needs to hear from d.o.e. as well as treasury. now, the majority may argue the subcommittee will provide an opportunity to question and d.o.e. about its views on a later date. mr. chairman, i'm sure you intend to do that. that approach only serves to ensure that half the story told today. it makes this hearing appeared to me to be more about generating had lines been engaging us in thorough fact-finding. i hate to say that nicely with all due respect, but let's not do this investigation piecemeal. as do a whole investigation. let's get all the facts out there and figure out what to do.
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>> i think the ranking member and i think it's self-evident were going to have to d.o.e. folks up here. we agree with you completely, so we intend to have them appear as well as the people who signed the document so he can assure that will have this happen. with that, i recognize the chairman of the full committee, distinguished colleague from michigan, mr. upton. >> well, thank you, mr. chairman. eight months ago we asked secretary choose to turn over all documents containing communications between the department of energy and department of treasury related to solyndra. we had to ask again in september and d.o.e. is only now beginning to respond to a request. the administration claimed a request was too burdensome for a timely response, but it's now apparent that was not the case. we recently asked the treasury department to turn over similar documents and they responded immediately. thank you. beginning to turnover the requested documents in less than a week.
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where we seen so far suggest that d.o.e. essentially ignore treasury after signing off on a 500 or defies million dollars loan guarantee. the documents also reveal a department of energy affirmatively hearing more taxpayer money to solyndra with the ally himself coming from treasury and others within the obama administration. d.o.e. apparently stonewalled treasury, failing or refusing to turn over information related to solyndra is restructuring. and one change in august of 2011, assistant secretary merry miller noted that since july of 2010, treasury has vast d.o.e. for briefing on solyndra's financial condition and any restructuring of terms. the only information we have received about this has been through omb as d.o.e. has not responded to any request for information about solyndra, and quote. this seems to be a clear
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violation of the energy policy act of 2005, which says d.o.e. shall consult with allenby and the secretary of treasury before granting any deviation in that loan. putting the taxpayers at the back of the line behind private investors in the event of liquidation bankruptcy is not only a deviation. it's apparently unprecedented. so what happened? why they d.o.e. keep treasury in the dark? solyndra was burning through cash in the alarm bells were certainly ringing. in february 2011, and d.o.e. restructured the terms of the agreement and gave to private investment firms priority over the federal government in the likely event that solyndra declared bankruptcy. d.o.e. postponed solyndra's initial payments and push back the repayment of the loan. d.o.e. weep several requirements that solyndra was obligated to meet before receiving further
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funding, including solyndra's consistent failure to comply with the davis-bacon act in their ability to contribute to an agreed-upon reserve fund. while all of that was happening, do we continue to push millions of additional dollars out the door in a futile attempt to save it. six months later as predicted by d.o.e. sound financial model back in 2009, solyndra went belly up. today's witnesses hopefully are going to help us understand treasury's involvement at various points of life of the solyndra loan guarantee. this treasury believed d.o.e. should have consulted with doj about restructuring. you have to wonder giving expertise funding a project finance the d.o.e. had responded to treasury's request for information, with something a bit different? could some of the taxpayers money being saved? the department of energy has a lot of explaining to do that we
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will hear from them again soon. i assure you. unfortunately, we also have to ask how many more solyndra sarver? were there other warning flags that were ignored? risky gambles may be taxpayers hard earned money. today we focus on the startling development of one cabinet level agency concerned that another's actions were in violation of law. this investigation will continue and tell taxpayers get the answers they deserve regardless of how high the administration the facts take us. i would just like to say that in regards to minorities request request for d.o.e. witness was received less than two days ago before the hearing. today's hearing was precipitated in part because of the large and coordinated documents by the white house, omb and d.o.e. last friday afternoon just prior to the start of the three-day federal holiday weekend. we intend to hurled further
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hearings on the topic. you officials will be included in the testimony. >> but the chairman yelled? >> i yield -- >> i thank the gentleman for yielding. i want to point out the the genr yielding. i want to point out the fact that the department of energy witness some of her first witness we had was jonathan silva and we asked him this question. we'll be glad to have other witnesses at the department of energy, but that was the first witness and of course now he has resigned as we all know. >> i thank the gentleman. i think our time is expired here. so we are going to go to the minority. >> before you recognize mr. waxman, i would like to say for the record, this hearing was noted last friday, mr. chairman. and then it was a three day weekend because of the federal holiday. the majority did not tell us until tuesday of this week who the witnesses would be for this
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hearing and at that point we asked for witness. so i just want to clear that what the chairman and we can yield now to mr. waxman. >> i think the gentlelady. of these huge dog precipitate this hearing. and anyway, i think we agree -- >> the chairman insinuated we only asked for the witness today's the code because it only found out about these witnesses three days ago. >> underrecognized mr. waxman for five minutes. >> thank you, mr. chairman. after the subcommittees last hearing on solyndra, ranking member degette and i wrote to request that the committee hold hearings on the effectiveness of u.s. policies and promoting clean energy. we asked the committee to examine what steps our nation needs to take to make sure that we do not see the clean energy market to china and other countries. no such hearing has been scheduled. in fact, subcommittee chairman told the media last week that
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the united states quote can't compete with china to make solar panels and wind turbines, and quote. i cannot disagree more strongly with the chairman statement. the clean energy economy will be the growth industry of this century. we will lose millions of jobs if we give up the industry to china. we cannot compete china, but to do so we have to reject the defeatist anti-progress, anti-jobs views of those who opposed investments in clean energy. instead of helping america leads the world in clean energy, the republican-controlled house is doing everything possible to maintain our addiction to fossil fuels and crippled renewable energy companies. republicans voted against putting a price on carbon, which
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would have created market opportunities for clean energy. republicans voted to slash funding for research and development into clean -- new clean energy technologies. and now republicans are opposing government investments in solar wind and other clean energy tech -- companies. of his agenda may be good for the oil companies, it may be good for the coal companies, but it is terrible for the american people and our economy. this hearing is supposed to be about whether the department of energy had legal authority to subordinate the government loans to solyndra when the loan was restructured earlier this year. ..
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but it gets worse the committee has received a six page document from the department of energy that explains the department's legal rationale for subordination. we asked last week of the majority would object if we released this document so the public would understand the rationale. the majority of ejected. they did not want the public to see the doe explanation and they are not going to have a witness
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today who can talk about your explanation. on wednesday the democratic staff asked the republican staff if there would be any objection if we included the discussion of the doe legal memorandum in the background memorandum we provide democratic members. again the republicans objected. they asked us to withhold this critical information and thus the seven legal rationale for the actions from our own members. yesterday the republican said they don't believe this should be made public at this time. this investigation is beginning to resemble a kangaroo court but the last hearing witnesses who asserted their lawful constitutional rights were publicly humiliated and now the republican majority is withholding exculpatory information from the public while they cast innuendo -- >> with the gentleman yield?
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>> no, i would not. >> i would sure like to know -- >> you're supposed to be giving an opening statement. >> the gentleman is entitled to be heard. >> [inaudible] >> you have another ten minutes. >> the majority is withholding exculpatory information from the public. i don't object to the investigation and based on the record today i don't see evidence of wrongdoing by government officials just a bad investment decision. i don't want to minimize it. but this is a bad decision as far as we know made on the merit. >> the gentleman's time is expired. >> i repeatedly said i support a fair and thorough investigation. if mistakes were made with taxpayer money we should understand them and take steps to prevent them in the future. but our investigation needs to be fair. preventing the department of energy from testifying is not fair, i exculpatory evidence is not fair. mr. term and i believe you are a fair man that you are not
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conducting this investigation fairly and impartially and i hope that you will reconsider. >> i would say to the gentleman in all deference we think we are. both you and the president have cited me talking about china and competition taken out of context and i simply pointed out the fact that china which subsidized their solar minute factor net 40 billion a year has zero regulation, lower labor costs, access to raw material, lack of environmental safety regulation and i think the united states should focus where we have in and vintage. >> i would like if he would yield to be for one minute. >> i would sure like to be yielded -- >> the chairman has certain prerogatives. you've been the chair come to hundred stand this. >> i don't agree with a lot of the -- >> i don't want to suppress statements by members. >> regular order. we are going to welcome our
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witnesses and let me see -- >> are we through with opening statements? >> we are through with opening statements. you will certainly have an opportunity to ask questions and extra police on your feelings during your questions. >> so we are going to let with the ranking member said co -- >> i think in a democracy you let both sides have their opinion, and mr. waxman and ms. degette certainly have an opportunity to make any outrageous -- >> i don't have a problem with ms. degette's opening statement. >> both of us don't agree, so i'm asking -- regular order let's return to our witnesses and let me say to both of you, first of all, you are aware the committee is holding an investigative hearing and when doing so has had the practice of taking testimony under oath. do you have any objection to testifying in under oath? >> no sir. >> no search. >> okay. the chair then advises you under the rules of the house and the committee you are entitled to be advised by counsel; to you desire to be advised by counsel
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during your testimony today? >> nope. >> in that case, please raise your right hand and i will swear you win. do you swear the testimony that you are about to give is the whole truth and nothing but the truth, so help you god? you are now under oath and subject to the penalties set forth in title xviii sections 001 of the united states code. you may now give a five minute summary of your written statement. please begin. we will start with mr. grippo. >> transfer ins and a ranking member degette and other members of the committee, think you for inviting us here today to talk about the treasury's role in the department of energy loan guarantee program. my name is gary stifel, deputy assistant secretary for government financial policy of the treasury i'm joined here by gary burner, the cfo of the federal financing bank. he reports to me in the treasury. i submitted a written statement
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for the record. i'm not going to read a lengthy opening statement here. in the way of introduction, i would just say that the treasury has two very distinct roles in the department of energy loan guarantee program. as a consultant, and also as a lender. i think you know as a consultant the statute requires the secretary of energy to consult with the department of treasury on the terms and conditions of the loan guarantees and we provide input on that basis and as a lender when the department of energy decides to make a 100% federally guaranteed loan as opposed to a partially guaranteed loan they make 100% it is the federal financing bank but actually issues the loan to the private sector entities so we have a role as a consultant and in lending which is largely operational. mr. burner and i would be pleased to answer any questions.
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>> and ander sued mr. burner does not have an opening statement, is that correct? with that i will start my series of questions. the first question i have refused to establish early on we keep hearing loan guarantee, but i think this is a misnomer. il's understanding, when the doe gives a loan guarantee to solyndra, what happens is the department of treasury prints the money come gives it to the doe and they give it to solyndra there is no private bank involved. there is no other commercial enterprise accepted those from treasury printing the money giving it to the doe and giving it to solyndra. is that if your estimation of what happens? >> let me explain what happens -- >> just answer my question to the is that approximately what happens? there is no bank involved that solyndra -- >> there is no commercial bank. >> solyndra is not going to a
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bank saying bank of america or any other bank would two lonnae $535 million because doe will guarantee come they never did that. they just came and got a check is that correct? >> that is correct. >> i think the american people when you hear the loan guarantee it means that, you know, the government is standing behind a bank but in this case the treasury is printing money. the other question i just want to get this clear. in your estimation, can taxpayers' money be subordinated ever? yes or no? >> i really could not give you a yes or no answer to this gimmick you legally cannot tell me. in your opinion, and mr. burner, has there ever come in the history of the united states, government taxpayers, loan guarantee or money given to investment and private companies like this ever been subordinated to the private sector in your experience? your answer is yes or no?
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>> i've personally not been involved in any -- >> so you can't from experience? in your limited experience have you seen taxpayers' money be subordinated? >> i have personally not -- >> and mr. burner, you're the chief financial officer, is that correct? with your experience how long have you been in the office? >> [inaudible] >> can you pull but closer to you? >> [inaudible] >> you've got to turn it on. >> okay. thank you. i've been holding this position for five years. >> what was your experience before that? >> i've been with the treasury department for 28 years. >> how many? >> 28. >> in your experience plus being the chief financial officer, can -- have you ever heard of taxpayers' money be insubordinate to outside commercial firms? >> no sir, have not. >> never come in your entire 28 plus five, so that would be 33 years -- >> i'm involved in limited supply but -- its 28 total.
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>> in 28 years, total, you have never seen the taxpayers' money subordinated? >> no sir. >> has your experience been if they do it against the wall? >> i am not aware of -- i can't give you a legal interpretation on that, sir. >> mr. grippo, you think it's against the law for them to subordinate based on the -- >> it's up for a legal interpretation. i'm not a lawyer. >> mr. grippo, the energy policy act of 2005 and regulations require the secretary of energy to consult with the secretary of treasury regarding the terms and conditions of the loan guarantees; is that correct? >> yes. >> what must doe due to satisfy the consulting requirement? >> the department of energy must come to the treasury, at a minimum, with the terms and conditions in a term sheet prior to issuing a conditional commitment to offer a loan guarantee. -- basically doe must seek approval to go through loan
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guarantees; is that fair to say? >> that would not be fair to say. we are not approving or rejecting the terms or conditions. >> so it's merely need to inform you, that's all they have to? >> yes. consoles. estimate does treasury have the ability to approve or reject a loan guarantee under the statute if they find that there's problems? >> we do not have the authority to approve or reject. >> weather conditions they do not protect the government's interest? what you do then? >> we raise the questions, we provide changes -- >> but there is nothing legally that you can do beyond that? >> nope. >> mr. grippo and if you would go to tad 18 in your binder there is an e-mail between the omb staff on march 10th, 2009 the state's treasury was apparently not very pleased to have solyndra sprung on them that day. and let matt rodgers, who is the doe's stimulus of pfizer, know about it in no uncertain terms. is this an accurate description of doe's consultation with the
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treasury? >> we were not aware they were going to come to us with a term sheet for the solyndra loan at that time. we hadn't worked out of the routine for conducting the consultation. >> mr. treasury rushed to provide the consultation on solyndra? >> we asked for additional time and were given additional time and provided consultation in due course. >> my last question, mr. grippo, when did the treasury first learn of the intention to award a conditional commitment to solyndra? and how did the treasury learn of this and who at the doe informed treasury? >> it would have been around this time. march 10th, when we were provided information on the terms and conditions of the loan. i'm not specifically sure what individual transmitted the documents to us but it would have been here in early march. >> thank you. my time is expired. i recognize my colleague of
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ms. degette from coloradan. >> thank you mr. sherman. mr. grippo, the chairman asked if the treasury was rushed into a decision and you said that you were given additional time, so i guess your answer would be no you were not rushed? >> we were not rushed to the it >> the majority has highlighted these comments by mary miller, the assistant secretary for the financial markets. in an august 17 the e-mail to the deputy director regarding the restructuring of the solyndra law, so if you can take a look at tab 12 in your notebook and look at that e-mail come in the e-mail ms. miller writes, quote, or legal counsel believes the statute and the deily regulations both require the low and should not be subordinate to any other loan or debt obligation. mr. grippo, do you know what the treasury department rendered a legal opinion regarding whether subordination of government interest and the solyndra law is consistent with the statutory requirements regarding the doe
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loan guarantee program? it's been acquitted not render such a legal opinion. >> you didn't give a legal opinion, right? i mean your department -- ramadi lawyer, so you can't. right. does the responsibility reside with the department of treasury for interpreting and implementing title xvii as it relates to the department of energy's authority to support mes loans of rest of the statute? >> it's not the treasury's authority to interpret and energy statute. >> in fact it's the department of energy charged with implementing the statute authorizes the solyndra to the trustees of the loan guarantee correct? >> correct. >> infect counsel for doe's loan program office offered a six page memorandum dated february 15th, 2011, but provided a detailed discussion of the legal basis for the subordination during the restructuring of solyndra's loan guarantee. that's the legal document i referred to in my opening statement. so, mr. chairman, today we are
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talking about why there was subordination and what the legal basis was and so i want to ask unanimous consent that this february 15th, 2011 doe little bo regarding the subordination be entered in the record. i will tell you i read it. i am a lawyer and i found it to have no privileged information or anything like that. i think it would be helpful to have that for today and for future hearings talking about this issue. >> i think the gentlelady. we will look at it and get back to you. >> thank you. >> now, -- >> [inaudible] >> i will yield to the chairman emeritus. >> [inaudible] >> the unanimous consent is not going to be considered. it's going to be honored? >> mr. dingell, what we do -- the procedure has been with the ranking member and i that if she submit something and i haven't seen it, then i take it and have
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my staff and counsel look at it. likewise, when i want to put in a unanimous consent, i let her and her counsel look at it before we make the decision and that has been a regular procedure. and i think even when you did that when you were chair of this committee -- >> it's always been my understanding that these records should be responsible and everybody ought to know what all the defense or that we are dealing with that when a member thinks that this is important enough about to be in the record about to be in the record. >> i think both sides should have an opportunity to review it. >> reclaiming my time, mr. dingell, but chairman stearns and i have been doing -- i've been doing -- >> i am wasting your time. >> that's okay. i've been doing it with his documents, to make is give him the chance to review it and then i will review my notion. >> this is a document that has time to review. this is a document they have had since the very first day of our hearings on solyndra. it's a document that was
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discussed whether we could release it. they are familiar with the document. if you ask unanimous consent they ought to be able to say yes or no. >> okay. let's give them one minute and if they want to then i am going to make a motion. but let me just finish my questioning what of mr. grippo, have you seen the document, that memo? >> nope. >> mr. burner? >> i have not. >> are you aware of any of the legal opinions that the department of energy expressed in that memo after doing the legal research? >> i am not personally aware of their legal conclusions. >> okay. and can you speak to what the doe's these are for the basis of the subordination in the restructuring under the loan guarantee program? >> i would not feel comfortable speaking to their views and the state of mind, no. >> that's a different agency, right? >> indeed. >> mr. burner, what about you? can you speak to doe's use of
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the subordination and restructuring under the doe loan guarantee program? >> no man, i cannot. >> why is that? >> i am not familiar with their authorities. >> it would be helpful to have doe here. mr. chairman i renew my request for the unanimous consent to put that minow in the record. >> we are looking at it and i think that several of the stuff to take a look it first. >> okay but they have seen it and our staff has been talking about it and your staff told my staff they were going to object. >> if you want somebody to object i'm happy to object. >> the gentleman objects. >> in that -- >> i am reserving the right to object. >> let me recognize the americas of the full committee for his five minutes of questioning. >> well, wait a minute. you know -- >> i think you finished your time to read islamic i finished my question but i really my request for unanimous consent. >> i'm reserving the right to object.
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>> welcome in that case, what is the basis? because -- >> i haven't seen the memo. islamic but your staff has seen the memo. espinel fairness -- if he wants to see the document on -- >> okay then just give him a copy. >> the same time you're going to have votes right now and i think we want to continue our clustering. he has the opportunity to ask his questions and after he's asked his questions he can read it and we can have a discussion. >> in that case i would ask unanimous consent that we recess for the vote and return from the vote. >> i do object to recess. at this point mr. bartlett is recognized for five minutes. >> thank you, mr. chairman. can i make a brief comment on the ranking member waxman's opening statement? i know when you're in the minority and the president is of your own party you have an obligation to defend that president to some extent. i would also point out that we have been trying to get the facts on solyndra for about six
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months, and it took a subpoena request to finally get some documents and every member of the minority vote against that subpoena request. we got a fairly extensive document done right at five or 6 o'clock, and to the minority's credit, their staff spent all weekend apparently dillinger the documents, found some documents that the minority felt were worthy of being released and the exercise their right to do that. i took my hat off to them for that. they worked harder and maybe they were tipped off. who knows. but they took advantage of the situation and did a thing they felt made sense. you know, ms. degette said in her opening statement she wants to get the facts on the table. that is what we are trying to do. there is going to be no lack of witnesses called before the subcommittee from the department of energy and other departments. but today we are to talk to the
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treasury department because they are the department that actually financed the loan. it's not really a loan guarantee. and apparently they are the department that raised a lot of red flags about it that nobody in the d.o.t. or the white house paid any attention to. with that of one to ask my first question. how did the treasury department first find out about the solyndra loan? >> about the loan itself? >> about the fact that the brunt of energy under president obama had decided to go forward with it, were you officially notified or did you hear about it in the press? i mean what was the first inkling that they were thinking about giving this company $500 million? >> i think the best answer is that it was in march of 2009 when we were submitted documents of consulted input. >> so you did did an offical transmittal from the department
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of energy? >> yes. estimate is that a part of the record that we can look at and if not, can we see the documents? can they be provided? >> e-mails or other documents that deliver the term sheet and other related documents. >> chairman stearns and his questions made the point that in the law we of the guys a loan guarantee which means the private sector makes the loan in the federal government and agrees to pay if there is redefault. but in this case this wasn't a loan guarantee. the treasury department actually granted a loan. is there a decision documents that goes through that process and makes that change on the record? >> there are a number of longstanding written policies including office of management and budget circulars and other documents which state that it is the federal government's policy to have the federal financing bank issue a lone win another
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agency is making a 100% guarantee. if i could i will explain why that has been -- >> even though the law stipulates a loan guarantee because there was a decision to do 100% financing existing regulations to convert that guarantee to the loan as opposed to the loan guarantee. >> there is still the guarantee issued by the department of energy it is just in this case it is issued to a government corporation, the federal financing bank under the supervision of the treasury rather than to a commercial bank. >> in layman's terms, the department of energy guarantees that one part of the treasury can pay the of a part of the treasury that's what it amounts to pbs been a good program of energy is issuing a loan guarantee. >> of the treasury will send the $500 million to the department of energy who will turn around and send it to the federal financing bank which is a part of the department of treasury. isn't that correct? >> that is correct.
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there are good public policy reasons for doing that because it is the cheapest way to finance the flow and for the taxpayer. now there are e-mails and he and the minority has put into the record the release to the public that shows many treasury officials had grave concerns about this loan. plus the treasury department ever in a position to just reject kalona? >> neither the treasury department nor the federal financing bank would have legal authority to reject the law. >> if asked on the record commit the president asked with the treasury department approve of the loan being given or would they have objected to it? >> i'm sorry can you repeat that question? >> if you had been given an opportunity, if the treasury department had had the authority to say yes or no on the solyndra loan at the time it was granted,
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with the treasury department have approved of it or disapproved? >> one of the treasury did not have that authority and number two, we did not have all of the due diligence of background information the department of energy had. so it's not our job in the process to make a credit decision. >> is it fair to say that based on the objections raised before the loan was granted and after the loans granted that the treasury had grave concerns about this is that a fair statement? >> it's probably not how i would characterize it. >> we provide of consultation and input on the original terms and conditions. we made suggestions. some of those were accepted. beyond that, throughout 2010 and 2011 we were certainly aware of issues we were offering advice and input and letting the the
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problem of energy know that we have expertise and finance and structured finance and federal credit policy and we are trying to make that available to the department of energy but we did not have specific information about the load -- >> i'm trying to help you out. we have a vote on the floor. the ten minute bell just rang so we are going to allow mr. waxman to do his five minutes but i tell all members to come back here and we will have a decision on the unanimous consent of the ranking member. we will but mr. waxman who has to be on the floor offer his life minute question. >> thank you mr. chairman. i will have to be on the floor after this series of votes and i want to take my opportunity now to ask a question. who has the legal authority to make the decision on the issue of the subordination? is it the treasury department or the department of energy? >> it is certainly not the treasury department. >> do you know if it is the department of energy?
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>> in these instances i not sure if it is the department of energy or justice or exactly where -- >> of the department of energy runs the program. and they have heard from you, your department, but there were concerns about the subordination issue, isn't that correct? >> i think we raised the issue of whether they could compromise a claim of the government, not specifically whether there was subordination to be clear about the concern we raised. >> there was no legal decision on memorandum latest to them by the we look at what? >> we did not have a legal conclusion or render a legal judgment. we were flogging an issue for them to consider. >> the flag an issue for them to consider and they heard what you had to say and then their lawyer issued a legal opinion and a legal opinion is a legal opinion. it's not a statement of facts is a statement of what they think
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the law is and the the document we are trying to make public. this is a document that republicans have had for months. in fact at the very first hearing we had on solyndra, congressman gingrey read a portion from this legal memo that i asked a question, and the issue before us at this moment in the committee is whether we are going to make this part of the record, whether we are going to make a legal opinion public and the chairman is in like one of the cereals when we were kids going to the movie we are not going to get the results until you come back next time suggesting we will know about the unanimous consent decision when we come back from these votes on the floor. i'm not going to be able to be here, but if they don't give us unanimous consent i think we ought to have a motion to put in the record. i don't understand why this shouldn't be part of the record.
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it's a key document in our investigation. it explains the department of energy's legal explanation for the subordination of taxpayers' debt. it was produced in our committee, and september 14 there was used by mr. gingrey. republicans may allege the release of this document could take fact witnesses in the investigation. the relevant document does not pollute an investigation. rather it creates a more wholesome record so we know what the doe was thinking. we don't have them here. we should have them here. i don't know exactly what this testimony we are hearing from you has to do with it unless we get it in the perspective he flagon issue now we should say okay representative the issue was flagged what was your view on that issue? all we know is that the legal
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counsel wrote an opinion. the republicans have released a dozen documents in the press on this investigation and many more to the national media. the release of this specific document does not take the investigation any more than the release of all these other documents and the majority wants to enter documents into the record whether it supports their theory of the case and keep documents out that the contradicted so we will see what happens in this fight before we come back and i know the ranking member will do a job pointing out why this ought to be part of the record in addition to my comments. and >> i will ask for additional time if you would just let me ask -- >> we do have a vote -- he has the floor. saxby for mr. chairman. mr. grippo for mr. burner, i would like to ask about any interactions that you have had with mr. kaiser on this question
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of the loan. did any of you hear from mr. kaiser? >> i did not. >> when the treasury conducted its review of the solyndra other information in 2009 did you instruct anyone to give specific advice on the terms and conditions because of the donation to the president? >> no, sir, certainly not. >> you have any reason to believe they gave specific advice on to doe on the terms and conditions of the solyndra loan because of mr. kaiser's donation to the president? >> no sir. >> when they determined the interest rates did you instruct anyone to take any specific action regarding this because of the donation to the president? >> nope. >> are you aware of anything that would suggest that his donation to the president was a factor in the doe's determination whether duran or restructured loan guarantee?
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>> no. >> no sir. >> i think you for your answer and for being here today with the limited value it may be i yield back my time. >> we are going to temporarily recessed the committee and come back and ask the forbearance of the witnesses. >> [inaudible conversations]
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[inaudible conversations] >> the subcommittee will reconvene in as we mentioned before the break we will take up the unanimous consent request by the ranking member to put in a document dealing with susan richardson the chief counsel loan program dated february 15th, 2011. we have had a chance to review it and i think before i make my final decision i will recognize the gentleman from texas, emeritus of the full committee on his reservation and mr. burton is recognized for five minutes to reduce the mix before mr. chairman. i do reserve the right to object and i do want to tell the gentle lady from colorado if we have a
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productive discussion about my reservation i am very willing to withdraw the reservation because i am not at all interested in hiding any relevant information from the american public and the way to get it in the public domain is too obviously put it into the record. i will start out by saying after consulting with the majority counsel, it is clear to me that this is a key memo. it is also clear to me that the majority counsel had every intention to probably have come in fact i would say to definitely have a hearing specifically on this memo and that the minority counsel was made aware of that at least two to three weeks ago. there are apparently at least two memos identical in terms of content with the exception of who they are addressed to. one is addressed to secretary chu from the general counsel, and the other and i think the
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memo that the gentle lady from colorado wanted to put in the record is to the general counsel from a lady named susan richardson who is the chief counsel of the loan program office. the content at least from what i can tell and in trying to read both very quickly is identical with the salutation and the address are different and that to me is somewhat puzzling. so the appropriate time i would hope that we would put both memos into the record if we are going to put one of them the one addressed to the secretary of energy and the one also addressed to the general counsel. the key part of the facts in the memo is on page three, and it's got the headline issue and i am going to read it because i think it's important. the proposed subordination of the certain borrower reimbursement obligations to the
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doe is consistent with section 702 of the title 17. this is of the energy policy act of 2005 of which i was a conference chairman of committee chairmen and also supported the law section 3d provides that the guaranteed obligations shall be subject to the conditions of the obligations is not subordinate to other financing. i want to repeat that mr. sherman, subsection 17 sub three provides that the guaranteed obligations shall be subject to the condition of the obligation is not supported much of their financing cannot support to other financing. that, to me, is explicitly clear. now here's the answer to that either susan richardson or the general counsel depending on which minow you decide to put in
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the record here is the short answer to that question. the proposed subordination as permitted under title 17. the subordination condition contained in subsection 17023d is by its terms applicable only as a condition precedent to the issue of the loan guarantee. the question i would have for the author of the memo, mr. chairman, where does that come from? under what fairy tale do they decide after reading that the obligation is not supporting it, just out of the blue make the statement as applicable only as conditions to the president said. as it turns out, mr. chairman, the reason they answered that is that this memo was issued after solyndra had already received its loan proceeds and as once thought -- was in default so
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this is an opinion on my part, i'm not saying it is a fact i think it is an informed opinion the department of energy is looking for a reason to continue the loan and restructure it, but they have a problem they can't subordinate it and the only way to restructure it is if they can so the rest of this mr. chairman goes to a convoluted explanation of why they think they can support and finally on the page six in a footnote number two, they basically say we think we can subordinated because the secretary of energy has the authority to do whatever he wants to do. that isn't a real legal opinion mr. chairman. so i would hope that we would find out how many of these are floating around, who actually authored them, have the staff on both sides depose the author
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probably have a hearing specifically on this topic and let's get to the bottom of it because it is clear to me that the department of energy violated the law when they agreed to subordinate the taxpayers' money to private investors some of whom appeared to be heavy contributors to president,'s campaign. and i want to thank the gentlelady for wanting to put the memo in the record. it is one of the key if not of a key document, but we need to get all the facts on the table not just this one a document. >> thank you, a gentleman. i think what we need to do is have a unanimous consent -- >> i ask unanimous consent to respond. >> i thought we might have a discussion that you might want to have more time on that. i think other members would like to do so we will try to limit this to three or four members perhaps 15 to 20 minutes on the discussion if it goes of wrongs
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and you are recognized for five minutes. >> i just want to respond on the reservation of rights and thank the chairman emeritus for restoring this debate to some sanity. we won't object to the other -- apparently it is the same memo and it has different eldresses but it's still this text. >> my quick reading. estimate i don't object to that either and i think the chairman emeritus is understanding the point that i have been making all along which is we need to have a full investigation. we need to have all of the evidence in the record and figure out what happened because just to have treasury come and say we said it should go to the doj without having doe to say here's what we thought about what treasury said and here's why we did this and to have the
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actual author of the memo we can't know what happened and it is really the purpose of the oversight investigation committee is to figure out what happened. and so i think that the chairman emeritus this' questions about the memo are good questions i just only wish that susan richardson or somebody else who drafted the memo was here to answer those questions, so anyway, i am glad we are going to put this memo and the other memo in the record. i think it helps. and i would also ask the chairman and after the recess next week with seven other hearing and bring these folks into a think we really need to know. >> as the gentlelady heard earlier we tend to bring secretaries chu in and department of energy and i'm glad you support that. >> with all due respect, i do support bringing secretary chu and i think it's important to bring him in but i also think we should bring in the individuals in doe who actually wrote of
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these memos and had these communications and gave these legal opinions otherwise i fear he might not know the legal basis for this. we need to know it from him but we need to -- >> i would say to the ranking member my staff has told your staff that we are going to do that so excellent as a good word to use. what we recognize -- the gentleman from nebraska is recognized. >> despite the last word on reservation or whatever. >> do you request -- you are recognized for five minutes. >> thank you mr. chairman. i agree with the gentle lady from colorado and our friend, chairman emeritus from texas. i'm glad these documents are being submitted to the record. i think that's important. i do have some concerns usually before the documents are submitted. we have some level of
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understanding about them and some of the concerns i have that now we are discussing them in the theory because interviews hadn't been done with these parties traditionally what happens is when we get documents that are conflicting or we have questions about interviews that are done by the staff so that we are better informed that has not been able to be done and the staff's point here of not releasing these of course mr. sherman as we have been briefed the minorities had these documents for at least a week if not more is that true mr. chairman? >> that's my understanding. >> the gentleman and would yield many of the e-mails that have been put in the record interviews have not been conducted with the authors of those either.
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>> and then let me ask you this. you want to have a hearing next week. i love that. well, maybe not. i would if you would, but not sure our colleagues would agree to having one next week but the week after, so in the meantime, would you be helpful, the gentlelady, the ranking chair, of providing, of encouraging susan richards to have an interview, any of the associates with this memorandum i think it's important that even dr. chu's stat be involved because the first one was ostensibly written to him which raises a lot of questions why was a subsequent one they felt it was necessary to the race his name and try to hide the of original january memo. those are important questions to
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ask because it looks like there is a cover-up to protect dr. chu. >> with the gentleman yield? i think that's a pretty incendiary statements and i don't think -- i don't think we know. they might have had to memos, one with his man and one with susan richardson. i think these allegations flying around about a cover-up on exactly the problem with this investigation. >> are you not allowing us to go through regular order. >> ibm happy the gentleman asked will be willing to encourage the administration by dr. mic and the other witnesses. i would be happy to do that recognizing that the administration doesn't always do exactly what i tell them to do sadly enough. >> would be helpful, claiming my time would be helpful because frankly from my perspective, and the rhetoric from at least the two top people on this committee has been obstruction and
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diversion, so i appreciate the gentlelady's what i believe is a sincere jester of helping get those. the point was we haven't had time to do those interviews but i will tell you what when things change from one version to another it is a legitimate question to say why was it changed cracks one was dr. chu's nay removed? that is a valid question and it looks like it was to protect him why you do the trick. why were discussions occurring on subordination october, so three months, three full months before the january memo was written, and then the february suppose it official one made it looks like, and i want to know this during your interview, the bipartisan interview that will
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occur, it appears that perhaps there may have been another order may be verbal that of the legal department was to design a memorandum supporting subordination as opposed to an unbiased and legal analysis that the department of justice could have given. so i would appreciate those questions in the interview and i will yield back. >> mr. burgess is recognized for five minutes. >> striking the number of words on the requisite preservation i think it is important here to win the secretary, former secretary was here one of the very last things we asked him was when you make available members of your staff to our staff to be able to talk about these issues and our staff on both sides i think was doing that due diligence and
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proceeding. this has all been difficult because there was an obstruction at first. we couldn't get the simplest of documents out of the department of energy and management budget until the subpoena was issued in july and it was issued along party lines of free democratic party voted against it today the republicans held exculpatory evidence for months i'm sorry to be incendiary but that is a lot. that is a smadi and should not be allowed to stand. we got the draft memo only as a result of the subpoena, and we got the sanitized memo, if i can use that incendiary language, we got the sanitized memo only because we asked since it is a draft do you have a final? that is the issue before us here today, and to say that the republican staff hid the things is, again i will stand up for them that is a lie. it's not right. correct the record they have done their due diligence both of the stuff on the democratic and
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republican side. they did what we asked them to do. we said the secretary, can we have access to your stuff, can we talk to them? now, again, the word senator crist mabey incendiary, but i tell you when you look at the so-called draft attached to the legal memorandum respecting the permissible but the of the context of the proposed restructuring it is addressed to the secretary through the general council office. what are we to think when we see that even though it says draft and the only reason we got this was a subpoena. look, the administration needs to hear something today and it needs to hear that when we ask questions the need to respond. we asked for documents they produce we call a hearing the shot. if not, we are left to our imaginations, and as many of you know i have a very vivid imagination. so you show me this and i think someone is sanitizing something, someone is hiding something.
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we have members of the press in the room asking me questions when i walked out the door to go vote what is the deal was one different from the other one was one cleaned up? i don't know the answer to the question. i would like to know the answer to the question and call relevant people to the committee and get this straightened out and i will yield back the balance of my time. >> we recognize the gentlelady -- >> to strike their record requisite number of words. >> the gentleman from illinois is recognized for five minutes. >> i would like to yield to my colleague congresswoman degette. >> mr. trauner and i think we should cut this debate off because mr. burgess really didn't want to say what he just said. the documents from the department of energy were not produced under subpoena. the only subpoena was for the documents from the omb, not doe. all of the documents from the department of energy were
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produced to this committee and 65,000 pages, produced to this committee voluntarily come into this particular memo and in addition the other memo which says draft as secretary chu. chu was in the wendi production but this one was produced many months ago we had so, you know, if we want to try to cater to the press and make a scandal where there is one we can do that. if we want to have a full and thorough investigation. i would suggest we put the memos in and bring the doe people in, talk to them about why there was one drafted another one and so long instead of making these allegations completely unsupported by any evidence. i would also say, mr. chairman, that the doe wasn't even invited to this committee. mr. waxman and i wrote a letter
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to you asking that the doe be invited to this committee. so to somehow save the doe is trying to hide something is, again, inaccurate. i think that emotions are running high. i'm glad we are putting both of these memos into the record. let's bring the doe in to talk to them about it instead of making these obligations to our completely unsupported by any evidence and i yield back. >> the gentleman yields back. the gentle lady from illinois. >> the gentle lady from tennessee is recognized for five minutes. >> thank you mr. chairman. in response to what ms. degette said regarding mr. burgess' comments, i just want to make certain that we all understand that it was a subpoena from omb under which this draft memo became available and it is because of this draft memo there was made available under the subpoena documents that we then were able to get
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the final version of the memo after they went back to doe for that request. so just for a correction for the record, it was because of that subpoena and that is exactly what dr. burgess was saying in his comments. i think this is such a very serious issue as we look at not only solyndra and the situation they are in, as we look at the of loan program in its totality and as we look at the other loan guarantee programs with other departments and how they are working, this is the type of issue we need to drill down on we need to have the time for the staff to do their due diligence and for the members to do their due diligence and i do hope we will subpoena other members that were involved in this process of writing this e-mail and the attached document that goes from jr orie 21st, 2011, which is the
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e-mail that came under the omb subpoena and then into the final document that goes through detailing the subordination that is the february 15 to document and i would encourage the trend to continue moving forward with a hearing. at this time with any of my colleagues like the balance of my time? >> i yield to mr. carey. >> thank you. justin reference to the gentle lady from colorado's statement about cutting off discussion here, i mean, let the record reflect that they initiated the discussion about a memo, made specific accusations against a majority of hiding those from them. so it is completely appropriate now but we of the venue to defend ourselves against those
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accusations and to be able to have a valid discussion about the fact of that there are two memos with two different headings and we don't know what else the differences are at this point are completely appropriate as a former reform the lawyer did a lot of trial work, the judge would say madame, you opened the door. >> reclaiming my time i would yield to dr. gingrey. >> i thank the gentlelady for tennessee for yielding and it just seems to me that this issue has been brought up by minority's request for unanimous consent to submit this memo for the record. the minority knows that in consultation with the majority a commitment was made by the majority to have a subsequent
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hearing and to have secretary chu come and testify about this memo and who gave directions in regard to -- essentially who knew what and when did they know it? of the minority of the hearing today has sort of preemptive that process after agreement was made between the majority staff and minority staff that this would be done in a timely manner under the regular order so the dots could be properly connected in of a sudden we get this put on us this morning unanimous consent to release a memo, a draftee essentially that is incomplete and we can't connect these stocks so i'm glad that the gentleman -- the chairman emeritus, mr. barton from texas, is an all-pro with eaglen to
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withdraw his objection, but let's get this done and move forward to that hearing that the chairman of the subcommittee mr. stearns has committed to the minority so i think that should end the discussion quite honestly and let's get on with this. >> reclaiming my time. reclaiming my time and i yield to mr. griffith. >> the gentle lady's time could be exported and i will recognize mr. griffin as the last speaker and i am prepared to rule with mr. borut. can you go ahead and perhaps give mr. squeeze a little bit of time. we have two witnesses and i would like to keep moving because i think the witnesses are showing great for parents to reverse the mabry will do my best to the line but the memos of come in and i agree with the comments made previously trying to get this in the right order so that you didn't come speculation and so forth and on the warmblooded is in because i want the press and the lawyers of the united states of america to take a look at this memo.
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when i first read it at weeks ago in the comment it looks like a law school project. evin text of my staff and asked them if they could find out when susan richardson was admitted to the bar because i believe it must have been about three months before and it turns out she was admitted in 1983 but there was a surprise to me because of the quality of work. there's no references to court cases. it references one previous code section, doesn't give court cases on that section that there's a distinction that you get to the part it says in here one such condition precedent that being you can't subordinate has been satisfied here in norway and there's nothing in the code that says. the of the continuing legal effect. in other words, as i said at the hearing when mr. sold were admitted he hadn't sat in the chair you are sitting in but he hadn't even read the memo before putting the taxpayers of the united states in the backseat of the tune of $175 million it was astounding to me that this was relied upon. i think it's great that the department of energy at least
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through of the warning signal and said you ought to have justice look at this because i would like to see not only her ask to be here with susan richardson subpoenaed to be here because we want to find out exactly why she was putting the memo to get a like this. was she told to come up with this? that's what i believed the first time i read it. ..
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i yield to my colleague. >> i thank my colleague for ceiling, and, mr. chairman, i thank you for begin continuing to help us shine light on, what is a major scandal, that we've been trying to get to the bottom of on this side, and unfortunately our colleagues on the other side have blocked us and stone walled us on every front going back to predating pg the subpoena. but we lad to get a subpoena to get this information, and everybody on the minority side voted against the subpoena so we can uncover things, and there's a lot that we have uncord and
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there's even more to come that we're trying to find out. and we continue to get stone-walled on every front, and they keep saying, why isn't the department of energy here? >> the department of energy loan program was here and i asked the head of the department of energy's loan program, who made the decision to subordinate, and he refused to answer that question under oath. he acknowledged he would get me the names of everyone involved the subordination. everyone involved. he admitted that under oath, and then he resigned. i have to question the legal counsel if he is still compelled to get us that information. who made the decision to put the taxpayers in the back of the line? this isn't about the press or republicans and democrats. there's $535 million in taxpayer money at stake, and when we said we want to get the information, we weren't able to get it until we intended it, and this
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document wasn't even originally given to us by the department of energy. we went back to the department of energy and they said, we forgot to give you this. we forgot to give you this? how could they forget this document? this is a document -- it's a legal counsel opinion that basically says you can ignore the law. you can't ignore the law. the law is clear. this is the law on subordination. you can't do it. and they went and get to a legal point anyway. i want to know who else was involved in the decision to subordinate? just susan richardson or was she directed by somebody else to come up with this opinion because they wanted to give the loan anyway. we have memos from the white house saying, get this thing done. we want the vice president to be involved in the ribbon cutting. they were concerned about a photo op, and so in order to do that, they allowed $535 million of taxpayer money to be put in the back of the line of some private venture capital firm based on a knowny legal memo from their inhouse
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counsel, and we couldn't get this information until we forced the subpoena that nerve on the minority side voted against. those are the facts. we are trying to get more facts. we need more hearings because we haven't gotten all the facts from the people that were involved in this. and thank you. >> thank you. the chair is prepared to rule. if the gentleman from texas has a -- >> i'm going to reserve my reservation. i do have a question, though. if i understand correctly, she is agreeable to putting both memos -- she told me both memos. >> on the second memo, there is an addendum to it that has a number of tabular information regarding proposed finances of the -- of solyndra. is that also -- of you wish that to go in the record, are just the -- >> any objection?
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>> i don't know what those tabular items are. if i can see those. i want to make sure it's not proprietary information. i assume we wouldn't object. >> i would be agreeable to whatever the chair and ranking member -- >> i'm going to take the position that both documents are part of the. >> i reserve until i see the second one. >> i want to be sure we're agreeing -- >> here is the tabular. >> it's a -- we wouldn't you to not see it. >> projection for solyndra, for about five years into the future. i'm not saying it should i'm just saying it was attached to the memo. >> mr. chairman, i don't object
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to the addendum. i would ask that the majority -- minority staff just review that to make sure there's not proprietary information. looks like profit and loss and stamped confidential. but in general i don't -- >> both documents are part of the record, including the tap -- tabular -- >> i have a question, though, because what the gentle lady from colorado said is not what you said. >> i'm making the tabular part -- she is not objecting so the tabular -- >> so that's in, regardless of whether it's proprietary. >> what i'm saying is that subject to agreement of the staff to redaction of any confidential business information, if they can't agree -- >> then i would -- here's the problem. we agreed to these two memos, and then the chairman emeritus came in with this -- >> can i say, the tabular is such fine print, it's -- i don't
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think either side is going to look at this. i think we should move on instead of having another discussion about the tabular. your decision here is -- >> you know, you -- >> are you objecting -- >> i'm objecting to at the tabur thing. the memo i don't object. >> if you object to that, our side is going to object to the memo -- >> fine. whatever -- >> the question would be. >> i think we have agreement to put both documents -- >> we do have agreement, and the gentle lady has made a point she wants to make -- >> we're going to put the two documents in by unanimous consent, part of the record, and put the tab floor subject to the review by the staff for redaction. so ordered. now we'll move on to our witnesses who have been kind enough to stay with us, and at this point i think our side is recognized next, and that would be mr. terry.
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>> all right. gentlemen, thank you for your patience. i have some rather bland questions but first i want to make a point about whether or not -- i think it was mr. grippo, did you say you didn't feel you were rushed to provide your information or -- after the consultation, your feedback? >> let me be clear about what happened. we were provided with a term sheet for this deal. we were asked for a very quick turn-around for our consultation. we felt we needed more time. we asked for that. >> but you didn't feel rushed. >> well, we asked -- we felt that we needed more time and asked for it. they agreed we should have more time. and in due course gave our consultation.
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>> well, are these dates correct, then, that i just have in some notes, march 10, 2009, doe asks for treasurery for the consultation? then march 17, 2009, doe approves and commits to the loan. march 19th, treasurery submits their consultation in question. doe. seems to me that your consul addition was fairly irrelevant to d.o.e. >> i'm not aware of that sequence of events myself. >> all right. >> on those particular -- >> we'll submit. those they're in the documents. i'm going to get to another set of questions here, and then mr. burner, in tab 2, of your
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binder, a memorandum that -- march 16, 2010. entitled treasury slash ffb project or entitled project. have you seen this memo before? >> yes, sir, i have. >> due know who drafted the memo? >> a member of my staff. >> under your instructions? >> yes. >> okay. and why was the memorandum to file drafted almost one year after a call with d.o.e. -- i'm referring to the first paragraph of the memorandum that seems to be documenting a call a year earlier. >> staff member was directed to put it in final but did not. i find out about that a year later and asked it be put in final at that time. this is the same memo. it has not been changed since it was originally drafted.
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>> all right. so, your aide or assistant drafted the memo a year earlier. yet did not submit it or something? >> never got put into final for some reason. i felt i would rather explain this to you rather than explaining we might have backdated the memo. >> i appreciate that. i had things similar in my office where i had to accept staff members' goofups as my own. so, i feel for you. mr. burner, again, i'd like to address a few points made in the ffb memorandum to file relating to the treasury's call with -- i've got time. >> you got time. >> the memo that the ffb staff made two conclusions about the solyndra project, the i can
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witness solyndra had in the project was 27% as opposed to what appears to be a standard of 35% equity. i can't find where 35% is referenced. is that one of the conditions precedent in a rule i don't know about? where does the 35% come from? >> in discussions before that we were under the impression there would be 35% equity put into the deals as a standard. >> so this is a solyndra-specific issue that you were under the impression that solyndra had said there would be 35% equity by the ownership? >> it was in going forward and reviewing deals. we expected to see 35% equity put into the deals, and that is not what happened. >> so it is not solyndra specific, but deals, plural. >> it's not -- yes, sir, you're correct. >> and in that regard, where can i find the reference to the
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standard of 35%? and then after that, why is that important that they have 35% equity? >> the equity -- the number actually comes from if this was a partially guaranteed loan, it would be 80% of 80%, which would be 36% equity. so we rounded it to 35% is sort of a standard. 80% is sort of a guarantee, sort of a federal credit policy, that things be partially guaranteed rather than fully guaranteed. so this would put the government on an equal basis in terms of risk if there was 35% equity as opposed to 35% equity, fully guaranteed the deal, as opposed to having a 20% equity and having the loan be 80% guaranteed. >> the risk, then, means having
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unbalanced risk was the potential consequences to the government. >> it was felt it was a better risk for the government if there was more equity in the deal. >> gentleman's time has expired. recognize the chairman emeritus on the ranking side, mr. dingle, dingell, the gentleman from michigan. >> never seen such a big fuss over a small matter on this commitee. i have a couple questions for our witnesses. gentlemen, the issue of your subordination of the federal guarantee and guaranteed loan was -- did not occur when the initial transaction took place. it occurred later after solyndra began to get close to failure. yes or no? >> , that, yes. >> --
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>> that is correct, yes. >> and the united states has over time in hit submitted itself to subordination and to a lower treatment of its rights in order to carry out some public policy. is not -- is that not right? >> i'm not aware of those transactions but that could be permitted. >> these two documents are essentially work papers which are defining what the government should do. is that right? >> i'm sorry. which documents are you referring to? >> the thing about -- two of which we have had such a men did fuss. >> forgive us. i don't think we have been privilegey to those -- privy to that. >> i would note the memorandum to the general counsel has some interesting remarks. it says here, based on the analysis of the director of
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portfolio division, the director of pnd, d.o.e. determined that a re restructuring would lip ms.~the federal government's potential lot of the guaranteedded loan. is that correct? yes or no? >> i have not seen the -- >> that's in there. now, when the government considered this problem, they looked to see how they were going to save this loan, and how they were going to save the business, solyndra. is that right? and so they felt that the approach, which was taken was the best. is that right? >> i believe that was the department of energy's view. >> now, what was the policy impact of the treasury on this? did you super intend it or second get or come up with any corrections to the department of energy or did you just approve
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the money? which was the course you took? >> it was not our statutory decision to make. we rendered no legal judgment. >> you just saw to it that the money was correctly and properly released according to the rules and regulations of the treasury department. >> the department of energy certified to us the money should be released. >> i'm sure if we halved proper discussion we should bring in d.o.e. and let d.o.e. tell us why they came to the conclusions about which we are in this greats be if you hadlement today, and i simply would make a couple of observations here. we had developed the technology for new batteries and all kinds of things like that are being made in china, in korea, in germany, and in all kinds of other places. the result of that is that other
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people are making batteries that essentially were designed over here, and when the chevy volt drove out of the factory brand new as an american car, drove out of an american factory, with korean batteries, which were designed in this country. and what we're trying to do is to get back control of the battery industry because our people in the auto industry -- i have some familiarity with that endeavor -- have come to the conclusion that if the united states doesn't control this kind of technology, that it is going to see the entire manufacturing industry of automobiles moved overseas, and doesn't seem to me to be very good sense. so trying to develop an industry that will enable us to compete on the production of batteries, and the congress came to this policy when we passed the legislation we're discussing
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today. and it was our decision that we wanted to have these kinds of subsidies so we can compete with the germans. the germans have as much sunshine over there as does alaska. and yet they're anything this whole business, and they're controlling this industry. they, and the japanese and the koreans and the chinese. and the united states is little by little being frozen out, and we want to be in this new technology, but we're not seeing ourselves in it because they subsidize and finances the -- their industries and we do not. so we made some mistakes on the matter, and they were big mistakes and cost us a lot of money. the fact of the matter is, losing control of this technology is going cost us a heck of a lot more money and going to cost us jobs not just of the new technology, which is
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where our hope is as an manufacturing nation, but also in preserving existing industry. so, mr. chairman, i thank you for your courtesy. i hope that this committee will look at this as some people made mistakes and set out to try and correct those mistakes, but there's no criminal or serious misbehavior here, just some dumbness, and unfortunately we find ourselves in the awkward position where we have to go forward and try and save these kind of industries for the benefit of future generations of americans and, quite frankly forks the health of this one. thank you, mr. chairman. >> gentleman's time expired. recognize the gentleman from pennsylvania, mr. murphy. >> we appreciate your canned you're, and want to make its clear, republican support for clean energy -- we would love to follow through on the president's, we ought to be cleaning up coal. we are, however, primarily the
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purposes of the hearing, to protect taxpayers from potential or actual corruption, incompetence, violation office law or ignoring the law, and that's why we're having this hearing. mr. burper, tanks for being here. on february 10, 2011 you sent an e-mail to the loans program office general counsel and director of the monitoring program. aim correct on that? >> you are. >> that e-mail on tab 8 of your binder -- probably familiar with that -- in that e-mail you state that treasurery learn that d.o.e. is, quote, close to implementing a set of adjustments end quote to the solyndra guarantee and d.o. e.'s interests. >> that's right. >> what did you recommend the department of energy do? >> absent other authorities we recommended that the department of energy go seek and consult with the department of justice. >> can you describe, then, the context of this e-mail that led you to ask for department of
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justice consultation? >> in my experience with our client agencies, when there is a workout situation potentially developing, that the department of justice is consulted with. they have statutory authority over such matters. i do need to say, though, that some agencies have their own authorities so it's not a 100% call everytime. >> that's out of your agency or your area. that's one that you push for to make sure things are done correctly and follow the law. aim correct? >> i'm sorry? >> out of the treasury, that's something you practice to make sure that other deps are following the law? >> this was advice to a couple of colleagues on an area of law i was not sure they were aware of. >> thank you. were a treasury officials involved in the drafting draftit the e-mail you september to d.o.e.? >> yes. i'm part of a team and this was a group expert i was the person who transmilted the e-mail.
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>> why did triesry think it -- treasury think it was right to right to the department of energy and ask them to consult the december of justice. >> children is that the authority to compromise a claim against the government is department of justice's, unless they have their own authority. we do not know what their actual authorities are. and that's why we wrote the e-mail to them, to warn them. >> you were not legally required to contact the department of justice? >> no, sir. >> are you aware of the following federal statute, 31usc3711b which says unless otherwise provided by law when the principle balance of a debt, inclusive of penalties and administrative costs, exceeds $100,000 or any higher amount authorized by the attorney general's the authority to accept a compromise rest with the department of justice. are you aware of that? >> i'm aware the authority lies with the department of justice.
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i'm not a lawyer so i'm not familiar with the statute. >> seems to fit in that this exceeds $100,000. i want to get this on the record. mr. burner, d.o. ever responded to your e-mail asking the department of justice seek approval. they responded to you aim correct. >> yes. >> in fact d.o.e. staff stated there was, quote, gross misunderstand offering the outcome of the restuck touring of the solyndra obligation, end quote. you talked to d.o.e. about your e-mail. >> that's right. >> what was the substance of the conversation? >> the primary purpose of the conversation was to make sure that d.o.e. was aware that they may have an obligation to consult with the department of justice. >> why didn't they believe it was necessary to talk with the department of justice? >> they believe that the results of the deal, of the reorganization, restructuring,
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did not compromise the claim, so that it had not reached the point where they needed to take it to the department of justice. >> did they convince you it wasn't necessary to go to the department of justice? was there a discussion convincing your mind? >> they were in a workout situation. i thought it would have been wise for them to go to the department of justice. >> given all the information you have seen at that time and since then to your knowledge, did -- do you believe today that the department of energy should have sought department of justice approval? >> yeah. i've said i believe that they -- it would have been wise for them to seek department of justice approval. >> given the cost of solyndra, have you raised concerns about any other loans paid out by the federal financing board? >> at this time i've not been made aware of any other deals that under the workout situation. >> thank you. and mr. chairman, just want to make sure we're aware that solyndra told the department of
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energy it needed to restructure the loan in october of 2010, and the memo that was the subject of so much debate here wasn't written until january, and at no point did did the department of energy's legal counsel ask the department of justice if this was legal, even though it was thought they needed to do that. >> thank you, your point and the distinguished gentleman from michigan. we need the department of energy up here. we're going to have the hearing. the senior loan officer at jonathan silver resigned but d.o.e. will be here. the secretary of energy, mr. chu, indicated that the senior loan officer, jonathan silver, was an outstanding loan officer so that in mind, i think a lot of us are very concerned. so we will have this hearing, and with that i recognize the gentleman from massachusetts, for five minutes. >> thank you, mr. chairman. mr. grippo i want to ask you a few straightforward business questions. say you're considering a loan
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guarantee for a company and the price of the product that this company sells has declined by 63% over the last several years, including by more than 20% since february, without knowing anything else about this company, does that sound like a relatively high risk or low risk project? >> i'm sorry. could you restate that? i want to make sure i understand. >> the product drops 63% in 20 years and 20% since february. a high risk or low risk? >> if the price of their product is falling? >> yes. >> assuming that the costs of the company are not commensurately falling, that would have risk to it. >> what the same company's business model was predicated on the demand for the product increasing but people were just not buying this product like everyone thought they would. would that further increase or reduce the financial risk of the company? >> again, let me ask you to repeat that so i make sure i understand the hypothetical.
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>> predicated on demand for its product increasing but instead because of fundamental changes in the market it was decreasing, was that increase or decrease the financial risk of that company? >> if a creditor was making an assumption or had knowledge that demand would increase, that would tend to reduce the risk. >> now, what if it also turned out there were better financed competitors, including one that had a very large government backed loan guarantee and what if that company's technology had so many problems the technical experts at the department of energy assigned to your loan guarantee application asked the company to withdraw it because they didn't think it could be commercially viable? would that increase or decrease the risk of our hypothetical company defaulting on its loan. >> if i understand what you laid out, sounds like it would increase the risk. ...
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two years ago doe did in fact asked usec to withdraw its application because of the concern's doe had with of the technology. based on the circumstances that i've described a shrinking customer base, declining prices,
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in ten competition and problematic technology do you agree doe should exercise particular caution before we risk billions in tax payer dollars? >> i can see the department of the treasury input view would be extreme care should be taken putting the taxpayers at risk or offering exposure to the taxpayer. >> republicans including one on this committee with the energy secretary in february urging him to quickly approve his uranium enrichment project. last week speaker boehner stated a denial of this guarantee was tantamount to the obama administration portraying southern ohio not guarantee a loan your nt to a company that has these kinds of obvious financial problems it seems to me is not a vitriol of the tax
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payers. do you agree with that? >> i prefer not to offer an opinion on that, sir. >> in my opinion, with the betrayal is is in the republican budgets to cut investments in clean energy by 70% next year and 90% over the next three years. that solar and wind. that's what they are talking about, not coal or nuclear. the competitors to those incumbent industries. that's what this is all about, kill the competition that the nuclear industry has feared for years is finally arriving in wind and solar that's all the hearings are about, keep the loan guarantees for those old industries and that is what is happening on the house floor right now and what continues to happen in this committee. a tax on the clean air act, the
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tax on wind and solar and future this is a debate about the future and we can see that in the insistence that republicans have that loan guarantees be given to the operation which obviously as a business model which is failing so i think you mr. chairman and yelled back. >> thank you mr. marchi. now the gentleman from texas dr. burgess is recognized. >> thank you. listening with what interest to what mr. marchi was saying and might be willing to work with him on that concept if he would be willing, and i think that's an important part of our conversation and certainly is something that the members of this committee should look at. libya. let me also just say i think they aren't renewables. i have a solar minister tran company in my district i'm not aware they have any loan guarantees. i might be wrong. i have a wind turbine manufacturer in my district and i know they haven't gotten loan
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guarantees they did a good job in selling the product. they are a strong competitor in the market and to compete against foreign importers or imports of foreign manufactured but just remind people cheap brazillian blades will not stand up against the harsh texas wind like a good old texas blades made in gainesville texas. i always entered rich people to buy locally when they are buying, wind turbine blades. you answered, mr. burner, mr. murphy's question he asked if there were any other loan guarantee deals out there that were of concern, and your answer was you're not aware of any deals or workout situations, is the right? >> that's correct. >> did solyndra come to your attention only when it was in the workout situation? was there any point along the line that you were concerned about what was happening with
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solyndra before it got to the point that it was in a workout situation? >> only through the news, sir. >> okay. let me say this in a different way. a lot of us are concerned because solyndra seemed to create some of its own problems by accelerating or the office of the management budget created some of the problems because solyndra was pushing because they had a football operation coming in september of 2009i believe with the secretary and vice president biden was going to be brought in on a telecommunications device. so you worry when they're our time pressures on these loans if everything is done correctly and just last week or two weeks ago the end of the fiscal year there was a big push to get i think it was almost one-third of the total renewable energy budget in the stimulus bill there was a push to get that out the door relatively quickly, and i for one worried about that.
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i wanted this committee to scrutinize that, but apparently there wasn't time to do so. are there any of those deals now that are made and the money is not out the door but went through a rapidly are there any out there that give you heartburn necessarily because they are in a workout situation but because the business model with self reminds you of something that might not work? >> i'm not exactly sure how to answer that question, sir. i didn't review every single product that came through. >> are there any of those that keep you up at night now? >> no sir. not this meant, because we don't make the decisions on these programs. when we reviewed those we redo the term sheets and things of that nature so i don't really have the kind of knowledge. islamic but the review of the term, you are absolutely at peace with all of the ones that have gone through your office?
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>> let me offer an answer. we did review all of the conditional commitment offered and in deed loan guarantees issued. we did offer -- we had time to and did offer comment to the department of energy on all of them. if i could take a step back and say in all of these deals, the treasury is looking to do two things and we did these in all of the deals over the last six weeks or the last month. we are looking to make sure that the subsidy that is offered is needed to get the project done in other words could this occur through the markets without a government subsidy and the subsidy is needed is it minimized so that taxpayer isn't exposed to more risk than it needs to be at koppel. if there's a change in the environment as mr. marchi is
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talking about is that something that crosses the threshold that gets your attention? if there's something in the market that changes, the price of silicone, competitors will enter the market, does any of that enter into your decision? >> we focus on the terms and conditions of the actual loan guarantee but we certainly would look at general market conditions and if we see something we would offer advice. >> something that concerns me and it's not a part of this investigation were this discussion with the waxman markey bill that was debated and passed through the committee and then the floor of the house in june of 2009 contained in the provision providing credit payment to companies that would sell carvin offsets to other companies that were not as green or clean that never materialized and i worry that some of these projects were developed in an environmentally that the secretary for someone thought that these credits would be there, the sales would be there to other companies and that did
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not materialize because of the legislation never got through the senate were signed into law. if you take into account at any level? >> if we are aware of it we would definitely take into account and if we can analyze it we would provide input to energy on it. >> can i ask you one follow-up you have an inspector general what treasury, right? has that individual been involved at looking into this activity? >> the inspector general is looking at our activity in providing -- >> mr. chairman, can i ask the report be made available to the committee when it is completed? >> yes, you can ask that. >> thank you. you've been generous with your time and i appreciate the lightness of the gavel that you had today. >> at this time we recognize ms. blackburn for five minutes.
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>> thank you mr. chairman, and i want to thank both of you for your time and attention and patience today. this is an issue that the taxpayers continue to come to us with. they are concerned about what took place with the solyndra process and they are concerned that this is being repeated. the lack of attention to detail for the loan guarantees are being repeated in other programs. i do have a couple of questions that i want to ask, and i know we want to finish with you before we had four votes again. mr. burner, you have been with treasury for 28 years; is that correct? >> that's correct. >> how often does a loan workout situation come before you, and in reading the document for the hearing today and looking at your e-mail chain that you had with doe and your staff, the
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work out language was repeated regularly in a couple of those, so how often does this come before you? >> we don't see workout's very often because they are handled easily by the guaranty agencies and we may not even know that a workout has taken place because under the guarantee the agency may pay us directly and leave the original documents in place. >> so basically you're part of the due diligence is to provide the guidance that is given in the february 10th e-mail that you had to francis suzanne i guess that would be correct stating that if there are to be adjustments that may include subordination of solyndra's loan then that this would need to be a referral to the doj for the authority? >> in this case i was just
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attempting to offer some experience and advice to a couple colleagues on something they may or may not have been aware of. >> let me take you on a through let's see. there is another e-mail that i have on august 12th, 2011 at 11:51 a.m. where you are asking francis can we get an update on the status of solyndra today? if so, please call pearl. would you like to comment on that? why was solyndra still on your plate looking at solyndra if you were there to offer the guidance and help them to go when would you have re-entered that process in august and sought an update? >> in this case the request came from my supervisor, and i think
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people are starting to hear there were problems with solyndra. >> and the supervisor? >> was mary miller. >> is she a treasury employees? >> she is the assistant secretary. >> and she had expressed to you? >> i heard it indirectly for someone else there was a request to see if we could get a briefing on solyndra. >> okay. that is great. and i see that i have an l.a. times article that i have looked at september 26, 2011 article that references a white house meeting in late october lawrence summers then director of the national economic council and timothy governor the secretary treasury expressed concern the selection process for the federal loan guarantees wasn't rigorous enough and raised the risk that funds could be doing to become going to the wrong companies including ones that didn't need the help. so is it fair to say that as a
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problem with the process with loan guarantees such as solyndra had risen to the level of the assistant secretary mary miller and to the secretary himself? >> why don't i answer that. there were principles and devotees of all these agencies, the department of energy, the treasury department, the office of management and budget going up to the deputy secretary and secretaries who would periodically review the status of the program, and as i think the memo that you quoted includes one of the questions that was discussed was the amount of subsidy that may be needed in order to carry out some of the projects which is what i was talking about a little earlier. >> when we look at repayment to the american tax payers, will fsb structure how we are repaid or will treasury restructure how that will be repaid?
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has there been a discussion on that issue? >> in the case of solyndra are you asking? >> no, that would be an issue for the department of energy, and it would not be the treasury. >> he would not be involved in that at all? >> thank you i yield back. >> the gentlelady yields back. the gentle lady from colorado. >> thank you. i just want to clarify once and for all the unanimous consent we have on these documents. we have unanimous consent that the february 15th, 2011 legal memo and the draft agenda were the 19th, 2011 legal memo on a subordination will be entered into the record with no further actions. in terms of the financial confirmation that is the addendum, our staff have agreed they will work together to make sure that there is no confidential information, proprietary or other sensitive
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information. they will work together to redact whatever they can and then they will put that in the record as well. >> that is my recollection that i will refer to council to agree -- >> i agree. >> mr. chairman? >> the council and i agree with your burbage -- >> i think the ranking member meant that they would reject what was necessary, not what they can. >> correct. astana only what would be determined in a bipartisan way to be proprietary or sensitive business information. so we are clear? all right. mr. bilbray, you are recognized for five minutes. >> thank you mr. chairman. seeing that there is a lot of statements about agenda, i just want to make it clear this member doesn't have an ax to
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grind with the secretary of energy. i just want on the record i think that finally we have a secretary of energy who is a scientist, physicist, not a political operative, and so this member's intention is to get to the fact and find out how this could have happened especially when you have somebody like secretary chu running a department and seeing what appears to have happened indicates to me that the biggest problem here was that it appears the politics and prejudice and bad policy created a situation that could have very possibly cross the line leader into a legal i come we will clarify in the coming weeks. but just for the record i just don't want anybody to think this member has an ax to grind against the secretary.
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i hope to god that this does not cause him to have to basically step aside and step out because this problem, so just so everybody understands where this member comes from in fact i think the secretary as a possibility of finally fulfilling the goal of the energy department by creating energy opportunity rather than continuing to allowing it to dwindle. mr. grippo of questions about the doe loan guarantees that were just given now under the deadline on the 40th. in fact, on the day of the dead line, its closing $4.7 billion of loans were given right on the last day. was the treasury consulted about each of these deals before the close? >> yes we were in some cases will before the closing. >> do you believe the treasury
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had adequate time to consult on all these items? all of these deals? your review do you believe a financial model for these deals were right? do you think they were sound? >> let me be very clear about how i answer that because we do not do all the due diligence the department of energy does. we are not privy to all of the background information. >> they don't do all the due diligence the tax payers would like either but go ahead, i'm sorry. >> we are not making a credit decision. we are not determining whether this is inappropriate risk and whether a loan should go forward. we are commenting on the terms and conditions of the loan guarantee what should the interest rate be, what should the duration of the loan be. so we didn't have insider
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provide comment on the details of the actual financial model. let's look at it from the holistic point of view. what do you think about the overall health of the doe's loan guarantee portfolio at this time? >> it's difficult for us to judge without all the information but i think the best answer i could give is that it is too early to tell how the overall portfolio will perform and it will take some time. there are 30 some odd transactions in the portfolio. we've obviously been talking about one of 30. we are not aware that others are having problems and so, it will take time to watch the portfolio perform. >> if you are my stockbroker telling me that, i wouldn't be enthusiastic about putting more investment into it until i see how this shakes out. is that a fair perception from
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the point of view? >> it would not be. i'm not implying that we perceive that there are other problems -- >> but you still stated that we need to see how this -- >> you indicated many of the deals just closed a few weeks ago and obviously we have to wait to see them perform. >> the memorandum about the conditions in 2009 there was the treasury expressed concern about there wasn't enough equity in the deal basically that the concern there wasn't enough skin in the game for some of these guys. under the 1705 portfolio, do you think there was enough skin in the game in this instance with
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solyndra? >> i do not recall the details myself of that analysis but it wouldn't be uncommon for us to comment on the amount of skin in the game and to argue for other equity investors to have more scan in the game to protect the taxpayers. >> everything that was done last week basically we don't know how much of a risk it is we've got to wait to see how it evolves. >> that's fair to say. >> thank you. >> dr. pingree, you are recognized. >> mr. chairman, thank you. mr. grippo and mr. burner, thank you for testifying from that part of the treasury, and for your patience. some of these questions that i'm going to ask me have already been asked. i had to miss some of this to do in interview but first of all mr. burner in your experience as the chief financial officer of the federal financing bank, which actually made the loan,
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provided the funds, have you been involved in the restructuring of loan guarantees before either in or out of government? >> only per of early. >> let me ask you then this media is a bit hypothetical but in cases where the terms of a loan guarantee were changed or restructured by of agencies have those agencies sought the approval of the department of justice to your knowledge? >> if they don't have their own authority than they would seek approval of the department of justice. if they have their own authority than they would not. >> then let me asked mr. grippo, because what you just said i think is the crux of this matter to reid is that the reason, mr. grippo, in your opinion, that the department of treasury said to the department of energy look, there is a tab here, there is a red flag, and it is our
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strong advice that you consult the department of justice before going ahead with this restructuring? >> we didn't know what all of the department of energy's authorities were. we didn't even know the details of the restructuring. we had heard that there would be a restructuring, and it seemed like good advice in our role to tell them to seek to go to the department of justice which is customary. >> i commend you for that i think you're absolutely correct in doing that. either one of you what do you think could though doe was hesitant to seek the approval to get a little bit more security to cover their back -- why do you think they didn't do that? >> i don't have an answer for you. >> do you have an opinion on that? >> i'm sure they had their reasons. i'm not really sure if they had a legal theory on this.
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>> yeah, well, if doe department of energy was so confident in their legal analysis that the subordination was permitted why not go to the doj, the department of justice just to cover your base to get a little back up to see why eight rather than bea. they seek the department of justice approval of loan guarantee restructuring, and i asked to that question and you said you're not really sure. is that your answer, you don't know? mr. grippo, didn't ask you that specifically. other agencies come to the sikh the department of justice approval of loan guarantee restructuring? >> i don't have specific knowledge of that buying generally familiar with what the statute says and unless an agency has its own authorities, the procedure is to talk to the department of justice and that is what we were doing is making
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a procedural call trying to make a judgment on what is going on here we are not making a legal opinion. >> i'm not putting words in your mouth. i don't want to do that but it seems to me like you were strongly suggesting to them since they did not have a statutory authority i would refer back to the energy policy act of 2005 under the title xvii incentive for innovative technology section 1702 terms and conditions come sub three subordination come and you have heard this several times from members on our side of the aisle. the obligation, that isn't alone shall be subject to the condition that the obligation, the loan is not subordinate to other financing. so that was your concern; was it not? >> we were not interpreting that statute, we were recognizing it
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and offered the advice. >> it doesn't require i think my first great-grandson could pretty much read and interpret that. it doesn't take a rocket scientist this plane as the nose on your face, and they literally ignored the warnings and went ahead with this, and the result of course is the taxpayer is in a subordinate position to $75 million worth of additional investment, and when mr. silver was here and we asked these questions and we have it on video and audio, i mean it's clear what he said to last. look, we were thinking in our mind that taxpayer would come out better if we found a way to circumvent and break the law and that's what it's all about. mr. chairman, i yield back.
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>> thank you. at this time we recognize the gentleman from louisianan esters the lease. >> i appreciate the witnesses being here to answer questions as it relates to the department of treasury's role in the solyndra scandal. as i look for the e-mails starting with the february 10th e-mail of 2011 mr. burner that is when you send an e-mail over to the department of energy and expressing your concern about the restructuring you later send an e-mail back and your original e-mail was february 10th and then later that day you got the e-mail that said can you give me a call to discuss, this was the department of legal energy council they asked you to this discuss this. who were all of the people involved in the discussions that you had about this concern that you were raising?
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was adjusted the legal counsel's staff of the department of energy? because we are now off of e-mails, we are just on phone calls were conversations off line, who were all the people involved on the phone call itself or -- just in general as you were raising concerns with others in treasury i think you're getting your information from the office of management and budget that there was possibly a subordination coming down and i guess your legal counsel review they felt that was a legal in violation of the statute decided not to be returned e-mail. so obviously you have another conversation that treasury but were also having conversations with people outside of treasury whether it was the department of energy, was it the white house as well, who were the of the people involved in the conversations that are not included in the e-mail documents we have? >> the members of my staff, as we say i


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