Taxpayers will likely never be repaid the $535 million loaned to the now-bankrupt solar company, Solyndra, because the Energy Department restructured the loan so that private creditors would be repaid ahead of taxpayers. This maneuver is an apparent violation of the law, and House Republicans moved to strengthen the language banning such a restructuring.
The Energy Department fought to keep that power today. “It’s a tool of last resort,” DOE Loan Program Office Acting Executive Director David Frantz told Rep. Cliff Stearns, R-Fla., this morning. Stearns, for clarification, asked if Frantz was saying that he needed to have the ability to subordinate taxpayer interests to the needs of private investors.
“Yes, yes, I do, very definitely we do, because if a project is in distress we want to have the opportunity to save the project,” Frantz said.
Frantz could not give a definite answer as to whether they had subordinated any other taxpayer loans, beyond saying “not to my knowledge.”
Solyndra isn’t the only company to go into bankruptcy, though. Did DOE use this “tool of last resort” to help Beacon Power, for instance, which received a $39.5 million loan guarantee?