[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

FROM DOE LOAN GUARANTEE TO BANKRUPTCY TO FBI RAID: WHAT SOLYNDRA'S
EXECUTIVES KNEW

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

SEPTEMBER 23, 2011

__________

Serial No. 112-89

Printed for the use of the Committee on Energy and Commerce

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COMMITTEE ON ENERGY AND COMMERCE

FRED UPTON, Michigan
Chairman

JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

7_____

Subcommittee on Oversight and Investigations

CLIFF STEARNS, Florida
Chairman
LEE TERRY, Nebraska DIANA DeGETTE, Colorado
SUE WILKINS MYRICK, North Carolina Ranking Member
JOHN SULLIVAN, Oklahoma JANICE D. SCHAKOWSKY, Illinois
TIM MURPHY, Pennsylvania MIKE ROSS, Arkansas
MICHAEL C. BURGESS, Texas KATHY CASTOR, Florida
MARSHA BLACKBURN, Tennessee EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California GENE GREEN, Texas
PHIL GINGREY, Georgia DONNA M. CHRISTENSEN, Virgin
STEVE SCALISE, Louisiana Islands
CORY GARDNER, Colorado JOHN D. DINGELL, Michigan
H. MORGAN GRIFFITH, Virginia HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)

(ii)

C O N T E N T S

----------
Page
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement.................................. 2
Prepared statement........................................... 4
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 7
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 8
Prepared statement........................................... 10
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 12
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 12
Prepared statement........................................... 14
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 15
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement.................................... 16
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 17
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 17
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 18
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 19
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 20
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 20
Prepared statement........................................... 22
Hon. Sue Wilkins Myrick, a Representative in Congress from the
State of North Carolina, opening statement..................... 23
Hon. Phil Gingrey, a Representative in Congress from the State of
Georgia, opening statement..................................... 23
Hon. Cory Gardner, a Representative in Congress from the State of
Colorado, opening statement.................................... 24
Hon. H. Morgan Griffith, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 25
Hon. John Sullivan, a Representative in Congress from the State
of Oklahoma, opening statement................................. 25

Witnesses

Brian Harrison, President and Chief Executive Officer, Solyndra,
Inc. \1\.......................................................
W.G. Bill Stover, Senior Vice President and Chief Financial
Officer, Solyndra, Inc. \1\....................................

Submitted Material

Subcommittee exhibit binder...................................... 36
Majority memo, dated September 21, 2011, submitted by Mr. Stearns 49

----------
\1\ Mr. Harrison and Mr. Stover did not present opening
statements.

FROM DOE LOAN GUARANTEE TO BANKRUPTCY TO FBI RAID: WHAT SOLYNDRA'S
EXECUTIVES KNEW

----------

FRIDAY, SEPTEMBER 23, 2011

House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:03 a.m., in
room 2123, Rayburn House Office Building, Hon. Cliff Stearns
(chairman of the subcommittee) presiding.
Members present: Representatives Stearns, Terry, Sullivan,
Murphy, Burgess, Blackburn, Myrick, Gingrey, Gardner, Griffith,
Barton, Pompeo, Upton (ex officio), DeGette, Schakowsky,
Markey, Green, Dingell, and Waxman (ex officio).
Staff present: Carl Anderson, Counsel, Oversight; Jim
Barnette, General Counsel; Sean Bonyun, Deputy Communications
Director; Karen Christian, Deputy Chief Counsel, Oversight/
Investigations; Andy Duberstein, Deputy Press Secretary; Todd
Harrison, Chief Counsel, Oversight/Investigations; Kirby
Howard, Legislative Clerk; Carly McWilliams, Legislative Clerk;
Andrew Powaleny, Press Assistant; Krista Rosenthall, Counsel to
Chairman Emeritus; Alan Slobodin, Deputy Chief Counsel,
Oversight; John Stone, Associate Counsel, Oversight/
Investigations; Jean Woodrow, Director, Information Technology;
Kristin Amerling, Democratic Chief Counsel and Oversight Staff
Director; Alvin Banks, Democratic Investigator; Phil Barnett,
Democratic Staff Director; Stacia Cardille, Democratic Counsel;
Karen Lightfoot, Democratic Communications Director and Senior
Policy Advisor; and Matt Siegler, Democratic Counsel.
Mr. Stearns. Good morning, everybody.
The Subcommittee on Oversight and Investigations of the
Energy and Commerce Committee will come to order.
My colleagues, before we begin today, I would like to
address the procedures used at this hearing. I called Ranking
Member DeGette yesterday evening to consult with her about
today's hearing.
Ranking Member DeGette and I agreed to the following
process for opening statements and questions. I will recognize
myself and Ranking Member DeGette for 5-minute opening
statements. Then each member of the committee will be able to
give a 2-minute opening statement. After swearing in the
witnesses, the majority and minority each will have 10 minutes
to ask questions of today's witnesses. This time will be
allotted among members who wish to ask questions at the
discretion of the chair and the ranking member. We will start
with 5 minutes for questions for majority members, then 5
minutes for minority members, then repeat.
I would like to thank the ranking member, distinguished
member, for her support.
And now I recognize myself for a 5-minute opening.

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA

Good morning, everybody. We convene this hearing of the
Subcommittee on Oversight and Investigations to examine what
Solyndra's executives knew about the company's financial
condition and how it represented that condition to the
Department of Energy, the White House, and members of this
committee.
Just 2 years ago, after Solyndra received its $535 million
loan guarantee and 6 months after the Department of Energy
restructured the deal, Solyndra has laid off over a thousand
workers, filed for bankruptcy, and has been raided by the FBI.
Yet only 2 months ago Solyndra's CEO Brian Harrison met with me
in the committee offices. He looked me in the eye and assured
me that everything was just fine, and the company was on track
to be cash-flow positive. Mr. Harrison told me and other
members of this committee that Solyndra was continuing to make
excellent progress, that it was meeting all its cost and
performance milestones, and that revenues were projected to
nearly double in 2011.
I was hoping that Mr. Harrison would testify today and
explain to me and to this committee how he could make those
representations in late July about Solyndra improving prospects
when the company was on the path to bankruptcy just 30 days
later.
It seems clear to me that Mr. Harrison knew or should have
known in July that the company was going to restate its
financial projections to reflect increasing market and pricing
pressure on its products, resulting in decreased revenue.
When the committee invited Mr. Harrison and Mr. Stover to
testify at last week's hearing, Solyndra's counsel said that
Mr. Harrison would appear voluntarily and would answer the
committee's questions. However, Solyndra's counsel asked the
committee to postpone their testimony by 1 week, claiming that
Mr. Harrison and Mr. Stover were involved in active
negotiations to potentially sell the company and that an
earlier sale might potentially result in a better recovery for
the taxpayer at the company's bankruptcy.
I agreed to this request, provided that Mr. Harrison
appeared this week and testified. In return for postponing his
testimony by 1 week, I was provided written assurance by
Solyndra's counsel that Mr. Harrison would answer the
committee's questions.
Unfortunately, we won't get those answers today. Mr.
Harrison and Mr. Stover's counsel informed the committee 3 days
ago that they would decline to answer the committee's questions
and would invoke their rights under the Fifth Amendment to the
United States Constitution. I respect the witnesses' rights
under the Fifth Amendment, but I want to make it clear today,
though, that this subcommittee's investigation will continue.
We have been asking questions about this deal since
February of this year. We will get to the bottom of why this
loan was pushed out to a company whose liquidity issues were a
major issue to Department of Energy staff reviewing the loan
back in 2009 and which ultimately caused its bankruptcy. We
will also figure out just how DOE concluded that restructuring
the Solyndra deal positioned the U.S. taxpayer for maximum
recovery, end quote, when documents produced to the committee
showed that OMB staff doubted that it would prevent a Solyndra
bankruptcy or result in greater recovery for the government. We
are also determined to know why DOE allowed the taxpayers to be
subordinated to the private investors during that restructuring
in violation of the clear letter of the law.
What we do not know is whether the Solyndra executives here
today have something to hide. Was all the information they
submitted to DOE accurate and complete? What did they know
about their financial situation and when did they know it? And
how did they represent it to others, including this committee?
What did DOE understand about Solyndra's financial situation?
Did DOE know what they were doing and did they properly monitor
Solyndra and the taxpayers' money being used to prop Solyndra
up?
My colleagues, these are all the questions I would have
liked to have received answers from our witnesses today.
Congress and the American taxpayers have a right to know
whether this loan guarantee was rushed out the door before it
was ready for prime time, whether the administration doubled
down on a bad bet after knowing of the company's dubious
commercial prospects or, even worse, whether $535 million of
taxpayers' dollars were wasted on false or incomplete
information. We intend to get those answers.
And that concludes my statement.
With that, I recognize the ranking member, Ms. DeGette, for
her opening statement.
[The prepared statement of Mr. Stearns follows:]

[GRAPHIC] [TIFF OMITTED] T3857.001

[GRAPHIC] [TIFF OMITTED] T3857.002

[GRAPHIC] [TIFF OMITTED] T3857.003

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO

Ms. DeGette. Thank you, Mr. Chairman.
Mr. Chairman, 2 weeks ago, Ranking Member Waxman and I
requested that this subcommittee seek testimony from Solyndra
President and CEO Brian Harrison, so I am pleased that the
subcommittee sought the testimony of Mr. Harrison and his
colleague, Mr. Stover, for today's hearing.
I respect that witnesses appearing before the committee
have the right to invoke their constitutional rights under the
Fifth Amendment, but I am disappointed that the executives here
today won't be responding to questions. I believe that their
testimony would greatly inform the subcommittee's investigation
of the Department of Energy loan guarantee to Solyndra, and I
hope that once those constitutional questions are resolved,
that they will be able to return and testify voluntarily.
Nonetheless, Mr. Chairman, I am glad that the subcommittee
will continue to examine key questions relating to the Solyndra
loan guarantee. As I noted in my statement at the September
14th subcommittee hearing, it is critically important that we
understand a number of factors: First, whether the Bush and
Obama administrations conducted due diligence on the loan
guarantee; whether Solyndra made accurate representations to
the government; whether the administration sufficiently
monitored the financial status of Solyndra, particularly as
market forces seemed to be against the company; and finally,
whether the government made correct decisions about
restructuring the loan.
But in addition to our specific concerns around this loan,
it is also imperative that the subcommittee examine these
issues in the broader context of how government should support
development of our Nation's clean energy technology industry.
The United States has an unparalleled history of innovation,
and at the beginning of the 21st century, it would be to our
long-term economic peril if we cede leadership to any other
nation in clean energy technology development.
To advance the subcommittee's understanding of these
issues, Ranking Member Waxman and I have urged you, Mr.
Chairman, to take several additional steps in this
investigation. First, we have asked that the subcommittee
convene hearings to ensure whether U.S. policies and incentives
are adequate to ensure that U.S. manufacturers can compete in
the global clean energy market. We have already heard testimony
in our investigation that China's share of the solar market has
jumped from 6 percent in 2005 to 54 percent just 6 years later.
And we have heard that half of the 10 largest solar panel
manufacturers are now based in China.
At the same time, just last week, some of the country's
business leaders, including the CEOs of General Electric and
Xerox, stated that, quote, the Federal Government has a vital
role to play in energy innovation and warned, quote, if the
U.S. fails to invent new technologies and create new markets
and new jobs, that will drive the transformation and
revitalization of the $5 trillion global energy industry. We
will have lost an opportunity to lead in what is arguably the
largest and most pervasive technology sector in the world.
Accordingly, review of the Solyndra loan guarantee should go
hand in hand with review of the appropriate path our Nation can
take to avoid ceding leadership of the clean energy technology
market to China and other countries.
Second, Mr. Waxman and I have asked Chairman Stearns to
obtain the testimony of representatives from the two private
equity firms, Argonaut and Madrone, which were the most
significant investors in Solyndra. Private investors invested
twice as much as the government in Solyndra. The subcommittee
should understand why Solyndra attracted so much private
capital and what representations the company made to private
investors as well as to the government.
I am certain the chairman sees the merits of these
requests, Mr. Chairman, and I look forward to working together
on these and other issues as the investigation continues.
And I yield back the balance of my time.
Mr. Stearns. Thank the gentlelady, and now the full
chairman of Energy and Commerce, the distinguished gentleman
from Michigan, Mr. Upton, is recognized for 5 minutes.

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN

Mr. Upton. Thank you, Mr. Chairman.
In 1963, there was a great train robbery in England. At the
time, I think it might have been the largest heist ever, and
because of its cleverness, the legend continues. The take was
2.6 million pounds; that is about $7.5 million in 1963 dollars.
But now we have our own modern day great train robbery. But it
appears that we have a great heist of over half a billion
dollars and possibly even willing collaborators, maybe even co-
conspirators called the U.S. Government, who rushed out a $535
million loan to Solyndra.
It is a very sad commentary that we met resistance every
step of the way as this subcommittee has tried to seek answers
to basic questions overseeing the approval process of this
project. We finally had to resort to a subpoena, and now the
outright resistance of getting answers that both of you, our
two witnesses, assured us only last week that you would
provide.
Let me just warn you and the other folks involved in this
taxpayer rip-off, we are not done. No, we are not.
In 2009, Solyndra was the very first company to receive a
Department of Energy loan guarantee funded with stimulus
dollars. The company was touted in statements by the President,
the Vice President, the Secretary of Energy as a model for the
government's investment in green technology. And now less than
2 years later, Solyndra has filed for bankruptcy and was raided
by the FBI.
I understand that our two witnesses today, Mr. Harrison and
Mr. Stover, intend to invoke their rights under the Fifth
Amendment and will not testify. Solyndra has left taxpayers
holding the bag for a $535 million guarantee, and we still
can't get answers.
Last week we learned even more troubling facts about the
administration's review of the Solyndra guarantee. Concerns
about the liquidity and cash flow were ignored. The financial
model showed that the company would run out of cash by
September 2011, which, as it turns out, it precisely did. OMB
felt pressured to complete its review in time for a
groundbreaking event with the Vice President. And when Solyndra
faced default at the end of last year, the administration
restructured the guarantee and put the taxpayers behind the
investors, despite concerns by OMB staff that the restructuring
would not be a better deal for the government and, frankly, in
direct contradiction to the law. These facts clearly show that
the committee was right to start asking questions about
Solyndra when we opened up our investigation 7 months ago.
The administration's actions in this case are deeply
troubling, and so is their response to our findings. Rather
than engage in a dialogue about their efforts to protect the
taxpayer from the risks posed by Solyndra, they are arguing to
the press the clean energy and DOE projects that Republicans on
this committee have supported. They believe that this somehow
undermines our basis for asking tough questions about Solyndra.
According to Politico, ``Obama administration officials
have spent the last week digging up letters, sound bites, and
media stories from Republican lawmakers who had previously
begged for clean energy spending in their districts.''
First let's talk about clean energy. Yes, Republicans do
support innovation, and we are uniform in our support of any
solution that improves our energy security. While we may
question whether the Federal Government is capable of selecting
the most promising companies and technologies, we had concerns
about the stimulus when it passed in 2009, and we have concerns
now that it failed to deliver the jobs that were promised. This
is not a debate about the virtues of clean energy. It is a
serious inquiry into reckless use of taxpayer dollars on a
company that was known to pose serious risks before a single
dime went out the door.
Yield back.
[The prepared statement of Mr. Upton follows:]

[GRAPHIC] [TIFF OMITTED] T3857.004

[GRAPHIC] [TIFF OMITTED] T3857.005

Mr. Stearns. The chairman yields back.
Ms. Schakowsky, the gentlelady from Illinois, is recognized
for 2 minutes. As I told all the members, we are trying to
strictly enforce that 2 minutes. I would appreciate your
support. Thank you.

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Ms. Schakowsky. Thank you, Mr. Chairman.
I am saddened that a company in which both the Bush and
Obama Departments of Energy saw such promise has filed for
bankruptcy, causing the loss of more than 1,000 high-tech jobs.
I also seek answers from Solyndra's executives about the
possibly misleading or incomplete assessment of the company's
financial position and the cause and circumstances behind the
FBI raid on Solyndra facilities and executives' homes earlier
this month.
And it is unfortunate that Mr. Harrison and Mr. Stover have
elected not to testify or answer questions today so that our
subcommittee together might have answers to those questions.
However, I think it is important that as we work to address
the Solyndra situation that we don't throw the baby out with
the bath water. Last night, exploiting the Solyndra case, this
House voted to cut the DOE loan guarantee program. This is a
shortsighted mistake that will undermine our ability to compete
in the global energy sector. As the demand for energy rises,
emerging technologies will need our support to compete with
businesses in China, whose solar industry was provided with $30
billion in government subsidies just last year. Conceding the
green energy race to China would be a reckless and irreversible
decision.
In a Politico op-ed last week, a group of leading American
venture capitalists said that the, ``nascent clean energy
industry needs more than venture capital to succeed.'' They
insist that only a program like the loan guarantee program has
the resources required to fully promote our green energy
economy. As we move forward with our investigation of Solyndra,
we should ensure that the loan guarantee program remains a
priority for this Congress and our country.
And now I yield back the remainder of my time.
Mr. Stearns. I thank the gentlelady.
And the chairman emeritus of the full committee and the
distinguished gentleman from Texas is recognized for an opening
statement for 2 minutes.

OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS

Mr. Barton. Thank you, Mr. Chairman.
Let's set the scene. It is a sunny day in northern
California. It should be a good day for a solar energy company,
especially a solar energy company that has just received a
government guaranteeing loan of over half a billion dollars, a
solar energy company that has been paid a visit by the
President of the United States himself, a solar energy company
that President Obama called the true engine of economic growth
and touted as a green energy success story, a stimulus success
story, and a job-creating success story.
As it turns out, that day was not a good day for the
company. Instead, that company, after taking a half a billion
dollars of taxpayer money, closed its doors, laid off over a
thousand employees, and declared bankruptcy. The next week the
FBI knocked down the company's door to secure its files.
The question before the subcommittee today, Mr. Chairman,
is, how does a company go from having the President of the
United States visit it to having the FBI come in and confiscate
its files? The American people deserve an answer to that
question, Mr. Chairman.
The two gentlemen who sit before the committee today told
us informally and in meetings with the staff that they were
ready to answer questions; they had nothing to hide. They made
a deal with this committee to delay the date of the hearing
with a promise that when they came they would answer our
questions.
Now they are going to assert their Fifth Amendment right
and refuse to answer our questions because those questions, the
answers to those questions might be incriminating. However, I
am sure that the members of this subcommittee will still ask
those questions so at least the American people, Mr. Chairman,
know what questions should be answered.
With that, I yield back.
[The prepared statement of Mr. Barton follows:]

[GRAPHIC] [TIFF OMITTED] T3857.006

Mr. Stearns. Thank the gentleman.
The gentleman from California, the ranking member of the
full committee, Mr. Waxman, is recognized for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Waxman. Two weeks ago, Ranking Member DeGette and I
requested the senior executives from Solyndra appear before our
committee, and I am pleased that Chairman Stearns agreed and
invited Brian Harrison, CEO, and Bill Stover, the CFO, to
testify before us today. The attorneys for Mr. Harrison and Mr.
Stover have indicated that both witnesses will invoke their
constitutional rights under the Fifth Amendment. I respect that
they have this constitutional prerogative, but I am
disappointed they will not answer our questions.
When Mr. Harrison was in my office in July, he said that
Solyndra's future was bright, with sales and production
booming, and I would like to know why he told me that in July
and then filed for bankruptcy 1 month later. Unfortunately, I
will not get an answer today.
As this investigation continues, one key question is
whether the Department of Energy made a mistake in investing in
Solyndra. Chairman Upton and Chairman Stearns said they already
know the answer to this question. They said last week that
Solyndra was a ``bad bet from the beginning.''
A lot of smart people thought otherwise. In March 2010, the
Wall Street Journal announced a ranking of the top 10 venture-
backed clean technology companies. Solyndra was number one on
that list. Some very successful and experienced private venture
capitalists invested over a billion dollars in Solyndra, twice
the support of the Federal Government. They obviously did not
share Chairman Upton's views.
Our next step in this investigation should be to hear from
these investors. That is why Ranking Member DeGette and I wrote
Chairman Stearns and Chairman Upton early this week to request
a hearing with Argonaut Private Equity and Madrone Capital
Partners, Solyndra's two largest private investors. They will
be able to tell us what private investors thought about the
company and its business prospects.
We need to put our investigation into perspective.
Republicans in Congress are now dancing on Solyndra's grave,
but they seem to have a case of collective amnesia. It wasn't
too long ago they were urging the Department of Energy to award
loans and loan guarantees to companies in their districts.
One Republican member of our committee, Representative
Blackburn, welcomed the award of a $1.6 million loan to a
Japanese company in her district. Another member,
Representative Bass, said he believed in the subsidies received
by Granite Reliable Power in his district. Two other members,
Representative Bilbray and Representative Bono Mack wrote the
Speaker earlier this year to support DOE's loan guarantee
program. Even Chairman Upton pressed for clean energy loans in
his State.
Risk is an inherent component of the loan guarantee
program. That is necessarily the case with a program designed
to help new technologies get off the ground. The alternative is
to simply give up on the important role that government can
play in supporting development of these technologies.
We need to face reality and stop denying science. Climate
change is real, and it is caused by man. In the past year
alone, extreme weather has caused record floods, droughts, and
fires that have turned much of our Nation into disaster areas.
The future will belong to the countries that recognize reality
and invest in clean energy. China knows this and invested $30
billion in Chinese solar manufacturers last year alone. We need
an effective strategy to compete.
That is why Ranking Member DeGette and I wrote the chairman
yesterday to ask for a hearing. Unfortunately, we seem intent
on denying the future.
Last night, Republicans voted to block funding for clean
vehicles, and they voted to take away funding for innovative
renewable energy projects. That is not an economic plan for the
future. It is a job-destroying strategy that keeps us tied to a
fossil fuel past.
Mr. Stearns. The gentleman yields back the balance of his
time. We are in opening statements.
The gentleman from Nebraska, Mr. Terry, is recognized for 2
minutes.

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEBRASKA

Mr. Terry. Thank you, Mr. Chairman, and this was to be an
important hearing. As the chairman of the full committee said,
we want clean jobs. We like clean energy. All of us want jobs
to be created in our own districts. Some of the districts
mentioned by Mr. Waxman have very high unemployment rates. So
when you combine the two, it only makes sense that Members
would encourage job growth in their own communities.
And I think it is a tactic that is being used by the White
House and now by members of this committee to deflect attention
away from the real issues, and that is whether or not, the
fundamental question, was DOE and OMB and the White House duped
by Solyndra or did they ignore the information that was
available to them for whatever purposes, whether it was to put
green energy in a better light than it was currently in the
markets, for press availability or even more onerous, for one
of its major shareholders, Mr. Kaiser, who had 16 contacts with
the White House, some of which were during important times of
consideration for Solyndra's request.
Those are all legitimate questions that we need answered,
that could have been answered here today. So it is disturbing
that when the taxpayers have been duped out of over $500
million, that we are not receiving the information on their
behalf that could resolve questions and fix the problems for
the future.
And I yield back.
Mr. Stearns. The gentleman yields back.
The gentleman from Massachusetts is recognized for a 2-
minute opening statement.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

Mr. Markey. Last night, the Republican House passed a bill
that would destroy the advanced technology vehicle loan program
and destroy the renewable energy loan guarantee program and
destroy thousands of jobs. And what was the rationale? They
used Solyndra. Is this just a failed company that could not
compete when faced with a 42 percent decline in the price of
solar energy? Or was wrongdoing involved? We don't know the
answer to that. But the Republican majority is recklessly
exploiting this one case to advance a political agenda that is
very clearly aimed at killing the solar, wind, and renewable
industries. It is reckless to toss around accusations of
illegality on the part of the Department of Energy officials
who agreed to restructure the Solyndra loan guarantee by
putting some private investors ahead of taxpayers in the
reimbursement line.
I sent Mr. Upton and Mr. Stearns a letter this morning that
provides a bit of a history lesson. The loan guarantee program
was created at 2:30 a.m. in this room in July of 2005 in the
conference between the House and Senate on what would become
the Energy Policy Act of 2005. Senator Domenici authored the
provision largely as a way to pay for the nuclear power plants
that Wall Street had no interest in financing. I offered an
amendment to strike, but the amendment was opposed by the
Republican majority, and the provision became law.
The nuclear industry hailed the new law, but soon everyone
started complaining. Republican members of this committee,
along with the nuclear industry, excoriated DOE for not getting
the loan guarantees out the door more quickly, and the nuclear
industry said repeatedly that if DOE did not allow private
investors to jump ahead of taxpayers in the reimbursement line,
Wall Street wouldn't give them the money to build any new
nuclear power plants. DOE finally acceded to the nuclear
industry's wishes and changed the rules----
Mr. Stearns. The gentleman's time has expired.
Mr. Markey. But it wasn't secret. It wasn't sudden----
Mr. Stearns. The gentleman's time has expired.
Mr. Markey [continuing]. And it followed the right
regulatory----
Mr. Stearns. With that, I recognize the gentleman----
Mr. Markey. We should hold hearings on the nuclear
industry's----
Mr. Stearns [continuing]. From Pennsylvania, Mr. Murphy, is
recognized for an opening statement.
Mr. Markey [continuing]. To change these rules.

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. Murphy. Thank you, Mr. Chairman.
In January 2009, the Department of Energy Bush
administration credit committee unanimously rejected the
Solyndra loan. Three weeks later, the process began again. In
March, they said this deal is not ready for prime time, and by
August, DOE employees warned that Solyndra model runs out of
cash, and yet what happened next was pretty incredible.
There are two major factors that suggest strongly the focus
was on protecting the money of the investors and executives,
not the taxpayers. It was an airtight scheme that trumps the
Bernie Madoff scheme. First, Solyndra executives filed with the
SEC in December 2009 this initial public offering, which could
ensure them a strong financial return by being able to profit
from stock sales. The New York Times said behind the pomp and
pageantry of a Presidential visit, Solyndra was rotting inside,
hemorrhaging cash so quickly that within weeks of Mr. Obama's
visit, the company cancelled plans to offer shares to the
public.
Secondly, the law clearly and unequivocally states the
taxpayers will not be subordinate to other financing in these
loans, but the executives and investors arranged the contract
to put themselves first in January of 2011.
It appears you knew the Titanic was sinking and you made
sure you got to the life boats first. I am very disappointed we
will not get answers to this today, but the taxpayers deserve
answers, and they deserve to get their money back.
I yield back.
Mr. Stearns. The gentleman yields back.
For an opening statement, the gentleman from Texas, Mr.
Green, is recognized for 5 minutes--2 minutes, 2 minutes.

OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS

Mr. Green. Thank you, Mr. Chairman. I thought you were
going to give me extra time because we are kind of slow
talkers.
Today's hearing should be an opportunity for Solyndra to
clear its name. However, due to the ongoing investigation and
the witnesses exercising their constitutional right, they will
not shed any light on the events surrounding a loan guarantee
or the restructuring of the loan. It is their right to do so,
but I am disappointed we will not get the information.
Like other Members of Congress, in July, shortly after this
issue was first raised by the subcommittee, our staff met with
the representatives of Solyndra. During this meeting, our
office was assured that Solyndra was solvent and well
positioned to grow. Only days later Solyndra filed bankruptcy.
It is clear that they were disingenuous at best. They
misled our office and other members of this subcommittee. This
leads me to believe that there is a good chance they similarly
misled investors and the Federal Government throughout the loan
guarantee process.
What is important to recognize is no entity, even the
Federal Government, is immune to fraud. The case of Solyndra
should not lead anyone to believe that our country should not
stop exploring the development of alternative energy sources,
particularly solar. Loan guarantees need to be thoroughly
vetted, but if a mistake is made, a fraud happens, we can't
simply turn and run away. Wrongdoing should be thoroughly and
vigorously investigated, and perpetrators should be punished,
but we must continue to explore ways to derive energy from
alternative sources.
For instance, 90 percent of Israeli water is heated with
solar power. Other countries are doing this, and so should we.
If we are not aggressively pursuing these technologies, we will
be left behind. If we lose our competitive edge, if our Nation
ceases to be the world leader in technological development and
innovation, the financial loss we are experiencing due to
Solyndra will be dwarfed by our inability to compete.
While I am shocked at the conduct of this company, and I
welcome the investigations by this subcommittee and the
Department of Justice, the allegations have been made and maybe
in this case cannot be used as a pretext for abolishing Federal
programs that have enormous potential.
And I yield back my one second.
Mr. Stearns. I thank the gentleman.
And for an opening statement, Dr. Burgess is recognized for
2 minutes.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS

Mr. Burgess. I thank the chairman for the recognition. I
want to thank the witnesses for appearing today and do note
they are here voluntarily and not under subpoena. I am
obviously disappointed, as is every other member of the
committee, that we will not be able to get our questions
answered today as the assertion is that you will assert your
privileges under the Fifth--or your rights under the Fifth
Amendment.
Mr. Chairman, we have been trying for months to get this
information out of the Department of Energy and Office of
Management and Budget, and it is a shame that this committee
has been stonewalled. It is a shame that this committee had to
resort to a subpoena in July of this year in order to get this
information and that that subpoena passed on a party line vote.
I suspect there are several members on the other side of the
dais that would like to have that vote back in light of what we
know.
Yes, last night, the money for further disbursements of
cash to these energy programs was corralled in the continuing
resolution. I think that was a good thing. I only wish we could
have gotten more.
Mr. Markey, in March of 2010, at this very table, one of
your subcommittee hearings, Cathy Zoi, an assistant secretary
of the Department of Energy, told this committee that all of
the money for these energy programs was obligated and out the
door at the Department of Energy. That was 15 months ago. And
now we learn that rapidly approaching the end of the fiscal
year, they are trying to cram $8 billion more out the door.
Hell, yes, we took that money back. So if DOE is going to
continue to be chumps, we ought to at least try to corral what
they are doing.
I only wish we could have appropriated a little bit more
money, invested in some crime scene tape and taken it down
there and circled their building. I hope they will be
forthcoming in the future, I hope Secretary Chu will be down
here to our committee to testify. It is only the right thing to
do, you owe it to the taxpayers, come to our committee, bring
the documents, and tell us what you know. I yield back.
Mr. Stearns. The gentleman yields back. The chair
recognizes the gentleman, the distinguished gentleman, from
Michigan, Mr. Dingell, for 2 minutes of an opening statement.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN

Mr. Dingell. Mr. Chairman, like every other member of this
committee, I am disappointed, and we feel that we should be
able to ask questions of today's witnesses. If we are going to
look into this issue, we need to get both sides of the story,
and in all truth, I believe the witnesses today have much to
tell us that is probably in their interest, but their behavior
is fully within the Constitution, and like everybody else, I
have to support and protect those rights because they were
wisely given by great men.
Now, having said this, I am hard put to believe there is
wrongdoing on the part of the Department of Energy's loan
program office. I believe that that agency has documented that
fact over the course of 3 years and two administrations, one of
each, Republican and Democratic. And I believe that they have
shown that due diligence was done by the loan program office
and by outside engineering and market consultants. And I know
how hard it is to get loans because I have had to support on a
number of occasions constituents of mine who had need of this
kind of assistance.
In any event, members of the subcommittee were assured
earlier this year that the company was thriving and on track to
success, and it concerns me that we may have been given
inaccurate information. I did hope that we could hear
Solyndra's story at some point as we went through these
matters. How many of my colleagues on this subcommittee support
renewable energy is very clear. Many members on both sides of
the aisle submitted letters in support of Recovery Act funding
projects for this district, for their districts, Republicans
and Democrats, and I hope that we don't take the failure, for
whatever reason, of this project to mean that all renewable
energy projects are bad investments or that the Congress or
that the government should not establish programs that enable
the government to support new technology to keep this country
competitive.
I thank you for the time, Mr. Chairman. I yield back.
Mr. Stearns. I thank the gentleman.
We recognize the gentlelady from Tennessee, Mrs. Blackburn,
for an opening statement of 2 minutes.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE

Mrs. Blackburn. Thank you, Mr. Chairman.
And welcome to our witnesses. We are pleased that you are
here. We are very disappointed that you are not going to answer
the questions that we have on behalf of our constituents and
the American taxpayers that want to know what happened to the
money.
And Mr. Harrison and Mr. Stover, I think it is important
that you realize, this hearing is not about science or energy
policy. It is not about previous legislation. This hearing is
about you, the Department of Energy, and your interaction with
the administration. There is a desire to be accountable. We
want to be accountable to the taxpayers. We need to have the
answers from you. There are plenty of questions to go around.
Mr. Chairman, did Mr. Harrison plead the Fifth as he
interacted with the White House? Did he find it necessary to
plead the Fifth when he visited with some of my colleagues and
said that you were on pace to triple your output? In fact, if
we have learned anything about Mr. Harrison, it is that until
this morning, he has had no problem talking about the company.
In fact, it makes you wonder what you are trying to hide or
cover up. Did your 1,100 former employees know that they were
going to be laid off on the morning of August 31st? Did they
know that there was going to be difficulty with the financial
bearings of your company? Did they understand that there are
plenty of questions that are yet to be answered?
I think another part of this story that causes concern is
what is going to happen with the $783 million you owe to
creditors that trusted you.
I yield back.
[The prepared statement of Mrs. Blackburn follows:]

[GRAPHIC] [TIFF OMITTED] T3857.007

Mr. Stearns. The gentlelady yields back.
There is no longer on the Democrat side, so we will move to
the Republican side.
The gentlelady from North Carolina, Sue Myrick, is
recognized for an opening statement for 2 minutes.

OPENING STATEMENT OF HON. SUE WILKINS MYRICK, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NORTH CAROLINA

Mrs. Myrick. Thank you, Mr. Chairman, I appreciate that,
and it goes without saying that I am, like everyone else on
this committee, very disappointed that we are not going to get
any answers today. We appreciate your being here, and we
respect your Fifth Amendment rights, no problem about that.
But I am confident that the committee will get to the
bottom of this in the future because we want to find out
exactly what went on and how this loan guarantee was handled.
And also, what was the real reason for the company's eventual
failure after the Federal Government provided support?
I would also be very interested to hear about the financial
controls internally or lack thereof because a September 22nd
Washington Post article about Carol Leonnig and Joe Stephens
cited former employees who saw Solyndra's executives burning
through cash after receiving the Federal loan guarantee. The
article also mentions that inventory continued to pile up in
Solyndra's leased space at the same time they were building
their $340 million-plus facility around the corner. Like most
Americans, I would be very interested to know how Solyndra
spent so much money so quickly and if the company's management
team really believed in the financial picture that they painted
at the same time the company was evidently spiraling toward
ruin. I would also like to ask our witnesses if they could
point to anything that Solyndra did that will ultimately
benefit the American people.
Unfortunately, these questions won't be answered this
morning. However, as I said before, it is not the end of the
investigation, and I know we will get these questions answered
in due time. It is the least we can do for the taxpayers who
have been left holding the bag on this one.
I yield back.
Mr. Stearns. The gentlelady yields back.
The gentleman from Georgia, Dr. Gingrey, is recognized for
an opening statement for 2 minutes.

OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA

Mr. Gingrey. Mr. Chairman, I want to thank you for calling
today's hearing as we attempt to get answers from the
executives of Solyndra. Unfortunately, despite assurances from
Solyndra's executives in an email dated September 10, 2011,
that they would testify before this subcommittee, I am
extremely disappointed that CEO Brian Harrison and CFO W. G.
Stover have reneged on this pledge to provide us with answers
and instead chose to invoke their constitutional rights under
the Fifth Amendment to avoid self-incrimination.
Mr. Chairman, hundreds of millions of taxpayers are owed an
explanation as to how they were swindled out of $535 million in
loan guarantee money. My constituents in northwest Georgia
deserve to know why it is that this company, whose financial
outlook in August of 2009 indicated that they would be out of
cash in September of 2011, in fact the time that they declared
bankruptcy, and yet received a hefty loan in a rush to judgment
about unproven technology. Yet today we hear nothing.
Even more frustrating than the carelessness in which
Solyndra acted after putting taxpayers on the hook for over
half a billion dollars is the fact that these executives
sitting before us today had the audacity to tell members of
this subcommittee 2 months ago the merits of Solyndra, only to
see its doors close, leaving another thousand people out of
work.
Now, as we all know, Solyndra is the subject of a criminal
investigation by the FBI. Mr. Chairman, my constituents would
like to know the answers to several questions. How did Solyndra
manage to obtain this loan in the first place, given the shaky
financial outlook? What interaction did Solyndra have with the
White House during this process? How did Solyndra restructure
its finances in February of this year and obtain Obama
administration's approval to return $75 million to private
investors before taxpayers were paid back? Was this a violation
of Federal law? Mr. Chairman, these questions will be answered
with nothing but silence, as you can see. This subcommittee
deserves better----
Mr. Stearns. The gentleman's time has expired.
Mr. Gingrey [continuing]. And quite frankly, the American
people deserve better.
Mr. Stearns. And the gentleman from Colorado, Mr. Gardner,
is recognized for an opening statement for 2 minutes.

OPENING STATEMENT OF HON. CORY GARDNER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO

Mr. Gardner. Thank you, Mr. Chairman.
And I thank you for being here today. You received the full
faith and credit of the United States. The American people
deserve answers. What went wrong? What could have been done?
Did the lobbyists know? Was information hidden from the
Department of Energy? Did the Department of Energy paint a rosy
picture, hiding from Congress? Half a billion dollars was taken
from the American people. They won't get it back. This morning
this Congress passed a continuing resolution, and you have
managed to do something that few Congresses have. You have
killed a program.
We don't have answers, but we will continue to ask. We will
restore the full faith and credit of this country and the
answers that they deserve.
Yield back.
Mr. Stearns. The gentleman yields back, and we recognize
the gentleman from Virginia, Mr. Griffith, for an opening
statement 2 minutes.

OPENING STATEMENT OF HON. H. MORGAN GRIFFITH, A REPRESENTATIVE
IN CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

Mr. Griffith. I respect your decision to invoke your
constitutional Fifth Amendment rights. That stated, the
American people deserve to know the answers to a lot of
questions. After all, it is their money we are talking about.
If I had the opportunity to ask questions which would be
answered today, I would ask, in light of the fact the Justice
Department got a search warrant for your records shortly after
the unflattering emails from within the Obama administration
were given to this committee, do you feel you have been
unfairly targeted by the Obama administration's Justice
Department in order to keep you from testifying here today? Or
do you believe the Justice Department's investigation in this
matter is a smokescreen by the administration to shield the
administration's gross negligence in giving you and possibly
others questionable loan guarantees in the first place? Or do
you believe it is a smokescreen for the administration's
decision to subordinate $75 million of taxpayer money against
the clear meaning of the law?
Secondly, did you or anyone at your direction speak with
anyone, particularly legal counsel, at the Department of Energy
in an attempt to persuade or educate them that there was a
legal theory that would allow subordination of taxpayer loan
guaranteed money? Also I would like to know, did you have
knowledge of anyone else possibly speaking to, particularly
legal counsel, at the Department of Energy in an attempt to
persuade or educate them that there was a legal theory that
would allow such a subordination?
I would also have inquired whether you could affirmatively
state that you don't have any knowledge of representatives from
Argonaut or Madrone speaking to anyone, particularly legal
counsel, at the Department of Energy in an attempt to persuade
or educate them that there was a legal theory that would allow
subordination.
Thank you, Mr. Chairman, I yield back.
Mr. Stearns. The gentleman yields back.
We have completed our opening statements at this point, so
now we will move to the witnesses.
Mr. Sullivan is recognized for 2 minutes in an opening
statement.

OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OKLAHOMA

Mr. Sullivan. Thank you, Mr. Chairman.
This is a critical hearing to examine Solyndra's
representation on its financial status to this committee and
the Department of Energy.
Mr. Harrison, on July 21st, you came to my office to meet
with me, and I quote from your meeting request to my office to
discuss Solyndra's continued success in the global marketplace.
I guess a lot can change in 5 weeks.
In our meeting, you lied to me about the financial health
of your company because just 5 weeks later, your company was
bankrupt. What happened?
Today I want to know how your now-bankrupt company got $535
million taxpayer-funded loan guarantee from DOE, and I also
want to know how your chief financial officer, Mr. Stover,
duped the Obama administration and others on the financial
health of your company. The American people deserve answers
because they footed the bill. Did you know when you were
meeting with me and other members that your company would be
bankrupt 5 weeks after your Hill visits?
As a long-time critic of the Solyndra loan guarantee, I
want to know what happened. Americans deserve to know their
taxpayer dollars are being spent wisely.
And I yield back.
Mr. Stearns. The gentleman yields back. I think at this
point we are complete with our opening statements. Now we will
move to our witnesses.
My colleagues, my understanding is that Mr. Harrison and
Mr. Stover authorized their counsels to advise the committee
that they will rely on their constitutional right not to
testify at today's hearing. I believe that this privilege
should be personally exercised before the members, as we have
done in the past, and that is why we have requested Mr.
Harrison and Mr. Stover's appearance today. I request that
given the importance of their testimony, they reconsider their
decision to invoke the Fifth Amendment--their Fifth Amendment
rights, especially because the American people deserve answers
about what happened to half a billion dollars of their money,
and because Mr. Harrison met with many of us and made
statements to us, so we think we should answer our questions--
they should answer our questions now.
In addition, both of you and your company, Solyndra, have
made statements that you don't know of any wrongdoing and that
you are cooperating with the Department of Justice. If you are
not aware of any wrongdoing, how can you plead the Fifth
Amendment and say that answers to our questions will expose you
to criminal liability? I ask you today, both of you, to
reconsider.
I am now going to place both of the witnesses under oath.
Mr. Harrison, you are aware that the subcommittee is
holding an investigative hearing, and in doing so, we have the
practice of taking testimony under oath. Do you have any
objection to being under oath during your testimony?
Mr. Harrison. No.
Mr. Stearns. Mr. Stover, you are aware that the
subcommittee is holding an investigative hearing, and in doing
so, we have the practice of taking testimony under oath. Do you
have any objection to being under oath during your testimony?
Mr. Stover. No.
Mr. Stearns. The chair also advises you that under the
Rules of the House and the rules of the committee, you are
entitled to be advised by counsel. Do you desire to be advised
by counsel during your testimony today?
Mr. Harrison?
Mr. Harrison. Yes.
Mr. Stearns. Mr. Stover?
Mr. Stover. Yes.
Mr. Stearns. In that case, would you please identify your
counsel for the record, each of you?
Mr. Harrison, please identify your attorney by name.
Mr. Harrison. Mr. Walt Brown.
Mr. Stearns. Mr. Stover?
Mr. Stover. Jan Little.
Mr. Stearns. Thank you.
At this time, will you both please rise and raise your
right hand, and I will swear you in. And I need you to make
sure your mike is on if you don't mind.
[Witnesses sworn.]
Mr. Stearns. Thank you, Mr. Harrison, and thank you, Mr.
Stover.
The chairman recognizes himself for questioning of the
witnesses. And I should be less than 2 minutes hopefully.
Mr. Harrison and Mr. Stover, was every document and piece
of information you submitted to the Department of Energy and
the White House, Office of Management and Budget, the United
States Congress, and your investors accurate and complete to
the best of your knowledge?
Mr. Harrison. Mr. Chairman, I have tremendous respect for
this subcommittee and the important oversight role that it
plays. As much as I wish to be able to answer the members'
questions, I have been advised by my counsel that it is the
better course for me to assert my constitutional right to
decline to answer questions under the Fifth Amendment. While I
hope to have an opportunity to assist this committee's inquiry
in the future, on the advice of my attorney, I must
respectfully decline to answer any questions put forth to me by
this committee.
Mr. Stearns. Mr. Stover?
Mr. Stover. Mr. Chairman, on the advice of my counsel, I
must invoke the privilege afforded by the Fifth Amendment to
the U.S. Constitution, and I respectfully decline to answer any
questions put to me by this committee and subcommittee. I have
great respect for the crucial oversight role that Congress
plays in our democracy. I trust that the members of this
subcommittee similarly have great respect for the privilege
afforded every citizen by the Fifth Amendment.
Mr. Stearns. Mr. Stover, knowing the financial conditions
of the company in mid July, were you aware of Mr. Harrison
coming to Congress and painting such a rosy picture of the
company? Did you review all the financial information being
presented to Members of Congress, Department of Energy, and
OMB, and did you discuss it with Mr. Harrison?
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution, and I respectfully decline to answer any
questions.
Mr. Stearns. My time has expired. We will now go to the
gentleman from Texas, Mr. Barton, who is recognized for a
minute and a half. I am sorry, we recognize--I think what we
are going to do is go 5 minutes on this side, and then 5
minutes on their side. So, Mr. Barton, you are recognized for a
minute and a half.
Mr. Barton. Before my time starts, could I inquire of the
chair if the witnesses were given an opportunity to give an
opening statement? They didn't, but were they offered that?
Mr. Stearns. No, they were not.
Mr. Barton. They were not offered an opportunity?
Mr. Stearns. They are certainly welcome the opportunity to
speak today.
Mr. Barton. I would ask unanimous consent that we give them
the opportunity to give a statement if either of them wishes
to.
Ms. DeGette. I don't have an objection.
Mr. Barton. Normally we give witnesses an opportunity to
make a statement.
Mr. Stearns. It is my understanding, Mr. Barton, that when
you are taking the Fifth, there is no opportunity for opening
statements.
The gentlelady.
Ms. DeGette. If the gentleman will yield, we were--the way
this subcommittee has operated for, as you know, Mr. Chairman
Emeritus, for the last number of years is when witnesses appear
to take the Fifth, they generally don't give an opening
statement, but I would certainly have no objection if either of
these witnesses decided to give one.
Mr. Barton. I just think we should give them that
opportunity to show that we are fair and balanced, as they say.
Mr. Stearns. Mr. Barton, we are told by their counsel that
met with our counsel, they did not wish to give an opening
statement, and that is what we are hearing from their counsel.
Mr. Barton. Well, we were also told that they were going to
answer questions.
Mr. Stearns. Well, I think this is a fine point, but I
think judging from the counsel's reaction here, they do not
wish to give opening statements, and I think if you look at
their nodding heads, I think that should be apparent to you
they do not wish to give opening statements.
Do you wish to give an opening statement?
Mr. Barton. I wish to ask questions, Mr. Chairman.
Mr. Stearns. Go ahead and give your--excuse me, ask your
questions, yes.
Mr. Barton. I want to ask Mr. Harrison if he thinks the
American people who have invested over half a billion dollars
deserve to know what happened to that money.
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the
Constitution, and I respectfully decline to answer any
questions.
Mr. Barton. I want to ask the same question to Mr. Stover.
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer any question.
Mr. Barton. I don't understand what is self-incriminating
about a yes or no answer as to whether the American people
deserve to know what happened to over half a billion dollars of
their money, but then I am not a defense lawyer, Mr. Chairman.
I would, secondly, like to know what changed between
January of 2009, when the Bush administration and DOE rejected
the loan application, to March of 2009, when the Obama
administration reversed course and approved this half a billion
dollar loan. Mr. Harrison, would you care to answer that
question?
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the
Constitution of the United States, and I respectfully decline
to answer any questions.
Mr. Barton. I would like to ask the same question to Mr.
Stover.
Mr. Stover. On the advice of counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer any questions.
Mr. Barton. Again, Mr. Chairman, I am puzzled by the
assertion of a right against self-incrimination, which the only
obvious thing that changed is the occupant in the White House.
And that is certainly not illegal for the American people to
decide to put a new President in the White House.
I have got time for one more question.
Is it not true, Mr. Harrison, that the former CEO and other
investors of Solyndra met frequently with officials in the
Obama White House?
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the
Constitution of the United States, and I respectfully decline
to answer any questions.
Mr. Stearns. The gentleman's time has expired.
Mr. Barton. I would like Mr. Stover to be given an
opportunity to answer that question.
Mr. Stearns. Mr. Stover, answer the question.
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer the question.
Mr. Barton. Again, Mr. Chairman, I see nothing that is
incriminating about people going to see folks in the White
House.
Mr. Stearns. The gentleman's time has expired.
Mr. Barton. I will say this, Mr. Chairman.
I hope on a bipartisan basis we get to the bottom of this.
I hope our staffs look at the constitutionality of invoking a
broad privilege when in fact there doesn't appear to be any
reason for these gentlemen not to answer the questions of the
subcommittee.
Mr. Stearns. I thank the gentleman.
And the gentleman from Nebraska is recognized for 1 minute.
Mr. Terry. Thank you, Mr. Chairman.
To Mr. Harrison and Mr. Stover, did you or someone on
Solyndra's behalf discuss with investor Mr. Kaiser of the
perilous financial position before February 23, 2011, when the
DOE and OMB agreed to subordinate the United States' position
to recover funds in a bankruptcy to investors like Mr. Kaiser?
Mr. Harrison.
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the United
States Constitution, and I respectfully decline to answer any
questions.
Mr. Terry. Mr. Stover.
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer the question.
Mr. Terry. Yield back.
Mr. Stearns. The gentleman yields back.
The gentlelady, the ranking member, is recognized for 5
minutes.
Ms. DeGette. Gentlemen, based on the answers that you have
given to the other members of this committee, Mr. Harrison, I
would like to ask you first, it is my understanding that upon
the advice of counsel, you intend to exercise your Fifth
Amendment right to not answer any questions on any subject put
to you by this committee today. Is that correct?
Mr. Harrison. Yes.
Ms. DeGette. Mr. Stover, I am going to ask you the same
question. Based on your responses to the questions asked to you
by the other members of this committee, it is your intention,
based on the advice of your counsel, that you do not intend to
answer any questions based on exercise of your Fifth Amendment
right. Is that correct?
Mr. Stover. Yes.
Ms. DeGette. Both of you gentlemen, I will just say these
are important constitutional rights that we all treasure. And
while we are frustrated today, particularly because you told a
number of us in August that the company was strong, that it was
doing well, and this was only 5 weeks before the bankruptcy--we
would like to get to the bottom of that--we have the utmost
respect for the United States Constitution.
And so, therefore, based on that, I will decline to ask you
any further questions today.
However, Mr. Chairman, as I said in my opening statement, I
would be hopeful that these witnesses, once their legal issues
are cleared up and based upon the advice of their counsel, they
will voluntarily come back and answer all of the questions put
to them by both sides of this committee.
With that, Mr. Chairman, I will just ask the other members
on my side if they have any questions for these witnesses at
this time. OK.
Mr. Chairman, in that case, we will yield back the first 5
minutes and reserve our second 5 minutes.
Mr. Stearns. All right. I understand then you are yielding
back you're a little over 3 minutes, and you will get another 5
minutes.
At this point, we will go to our side, and recognize for 1
minute the gentleman from Pennsylvania, Mr. Murphy, for 1
minute.
Mr. Murphy. Thank you, Mr. Chairman.
To both witnesses, in this question, I am not asking you or
compelling you to be a witness against yourself, nor am I
depriving you of life, liberty or property without due process
of law. This question is not of a criminal basis or anything
else, but it is important. What is your plan to pay back the
taxpayers the $535 million you owe them, and when will you pay
it back?
Mr. Harrison.
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the United
States Constitution, and I respectfully decline to answer any
questions.
Mr. Murphy. Mr. Stover.
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer any questions.
Mr. Stearns. I thank the gentleman.
And now we recognize Dr. Burgess, the gentleman from Texas,
for 1 minute.
Mr. Burgess. Thank you, Mr. Chairman.
Again, thank gentlemen for being here.
A question for both of you, Mr. Harrison and Mr. Stover. In
today's New York Times article about this problem,
administration officials lay blame for Solyndra's problems on
part of the global collapse. Some lawmakers on Capitol Hill
question whether the firm's executives have engaged in a
coverup of their precarious financial condition. An aide to a
top White House official, Valerie Jarrett, was met with three
times to push for loans. Would you be willing to provide to
this committee communications between yourselves or your senior
executives with members of the West Wing of the White House,
specifically Ms. Jarrett, Carol Browner, and Rahm Emanuel, or
their staffs?
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the United
States Constitution, and I respectfully decline to answer any
questions.
Mr. Burgess. Mr. Stover, same question.
Mr. Stover. On the advice of my counsel, I invoke the
privilege afforded by the Fifth Amendment to the U.S.
Constitution. I respectfully decline to answer any questions.
Mr. Stearns. The gentleman's time has expired.
The gentlelady from Tennessee is recognized for 1 minute.
Mrs. Blackburn. Thank you, Mr. Chairman.
And to both Mr. Harrison and Mr. Stover, what we would like
to know is, who was the first in your company to realize that
you were not going to be profitable? And when you became aware,
was this discussed at a board meeting? And were DOE staff
members present? Were White House employees or administration
appointees present for such board meetings? And prior to your
bankruptcy filing and your awareness of your financial straits,
did you issue bonuses to your senior management, your
leadership team, or your board? And was this discussed as an
agenda item in a board meeting?
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the United
States Constitution, and I respectfully decline to answer any
questions.
Mrs. Blackburn. Mr. Stover?
Mr. Stover. On advice of my counsel, I invoke the privilege
afforded by the Fifth Amendment to the U.S. Constitution. I
respectfully decline to answer the question.
Mrs. Blackburn. Yield back.
Mr. Stearns. The gentlelady yields back.
The gentleman from Virginia, Mr. Griffith, is recognized
for 1 minute.
Mr. Griffith. Thank you, Mr. Chairman.
Gentlemen, I would like to know what role you all played in
the subordination and whether or not your company or agents of
your company came up with the legal theory that allowed
subordination, in direct conflict with what the statute passed
by this Congress says. So if each of you could answer that, I
would appreciate it.
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the U.S.
Constitution, and I respectfully decline to answer any
questions.
Mr. Stover. On advice of my counsel, I invoke the privilege
afforded by the Fifth Amendment to the U.S. Constitution. I
respectfully decline to answer the question.
Mr. Griffith. Thank you, Mr. Chairman. I yield back.
Mr. Stearns. Yield back. All right.
When I did my questions, we had 1 minute left on our side.
And I will ask this question for Mr. Harrison. In relation
to Solyndra's February 2011 restructuring agreement with DOE,
did anyone from DOE or OMB ever once discuss with you the issue
that subordinating taxpayers to Solyndra's primary investors
was a violation of the law?
Mr. Harrison?
Mr. Harrison. On the advice of my counsel, I invoke the
privilege afforded to me by the Fifth Amendment of the United
States Constitution, and I respectfully decline to answer any
questions.
Mr. Stearns. All right. We have completed our questions on
this side, and we recognize the minority for 5 minutes.
The ranking member, Mr. Waxman, is recognized for 5
minutes.
Mr. Waxman. Thank you very much, Mr. Chairman.
The chairman could have easily have asked a few questions
to ascertain whether the Fifth Amendment was going to be
asserted. That is consistent with other situations in which we
faced witnesses invoking their Fifth Amendment rights.
But what we have instead heard today is a line of questions
that seem designed to create catchy sound bites rather than
establish a clear record regarding the witnesses' intent to
assert their constitutional rights. And these questions
constitute witness badgering that is both unseemly and
inconsistent with a long line of precedent under which courts
have recognized that protections of the Fifth Amendment would
be meaningless if prosecutors could require criminal defendants
to repeatedly assert their privilege in the face of
incriminating questions.
According to a Supreme Court ruling, it is considered
prosecutorial misconduct when the government calls witnesses in
a conscious and flagrant attempt to build its case out of
inferences arising from the use of testimonial privilege. And a
Federal appeals court has written that misconduct may yet arise
if the prosecution continues to question a witness once her
consistent refusal, legitimate or otherwise, has become
apparent.
So I just want to take this moment to assert the fact that
I think it is unseemly and inappropriate for members to be
asking questions that we know you will not answer. You do have
a privilege under the U.S. Constitution not to give us
testimony.
Should you answer any of these questions, you may well then
have waived your rights. So, therefore, it seems to me when
members ask questions, like, when are you going to pay back the
money, when did you tell the White House this information, when
did you tell your board about it, when did you subordinate the
loans from others, that, to me, is an improper line of
questioning. They are sound bites. They are attempts not to get
real answers. I think our committee is better than this.
This is an important inquiry. We must find out what
happened to ensure that similar companies do not suffer the
same fate. And let's not put our desire for media attention
above our duty to conduct fair and balanced investigations into
matters of national importance.
I yield back the time.
Mr. Barton. Would the distinguished former chairman yield
for a question to himself?
Mr. Waxman. Yes, certainly. I will not take the Fifth
Amendment.
Mr. Barton. OK. Good. I was told that you appeared on the
Today Show this morning and said that the committee deserved to
have the right to ask questions and that you wanted to ask
questions. Was I told that erroneously?
Mr. Waxman. You were told that erroneously. I did not
appear on the Today Show. I came to this hearing directly from
home. But I have told the press, and I have told everyone else
that has asked me that I--in fact, I requested these witnesses
be brought to our committee because I do have questions I would
like to ask them. And I think we are entitled to get answers to
these questions.
But we do have the Constitution of the United States. And
there may be other ways we can elicit some of the information.
And I am willing to work--excuse me, it is my time.
Mr. Barton. It is your time.
Mr. Waxman. I am willing to work with the chairman of the
committee and the members of this committee to pursue other
ways to get the information.
But if they have asserted the Fifth Amendment, there is
nothing else we can do. And to badger them with questions that
are simply sound bites for the press does not strike me as a
fair way, or a balanced way, for the committee to conduct its
business.
Mr. Stearns. The gentleman yields back the balance of his
time?
Mr. Waxman. I do.
Mr. Stearns. I would point out to the ranking member that
this format today was agreed to by your side, the ranking
member. Ms. DeGette and I both----
Ms. DeGette. If the gentleman will yield----
Mr. Stearns. Sure.
Ms. DeGette [continuing]. Just because I agreed to the
format doesn't mean I agreed to the witnesses being badgered by
sound bite questions.
Mr. Stearns. No, no, I understand. But I am just saying,
the format we did. I just point that out. Let me move to close
here.
Mr. Harrison, will you invoke your Fifth Amendment rights
in response to all questions here today?
Mr. Harrison. Yes.
Mr. Stearns. Then you are excused from the witness table at
this time, but I advise you that you remain subject to the
process of the committee, and that if the committee's needs are
such, then we may recall you. You may leave.
Mr. Stover, let me be clear, Mr. Stover, are you refusing
to answer the questions on the basis of the protections
afforded to you under the Fifth Amendment of the Constitution?
Yes or no?
Mr. Stover. Yes.
Mr. Stearns. Can the press step down a little bit so we can
see each other? Do you want me to repeat the question for you?
Let me be clear, are you refusing to answer the questions on
the basis of the protections afforded to you under the Fifth
Amendment to the United States Constitution?
Mr. Stover. Yes.
Mr. Stearns. Mr. Stover, will you invoke your Fifth
Amendment rights in response to all of the questions here
today?
Mr. Stover. Yes.
Mr. Stearns. Then you are excused from the witness table at
this time, but I advise you that you remain subject to the
process of the committee, and that if the committee's need is
such, then we may recall you.
And with that, my colleagues, I ask unanimous consent to
enter the document binder and majority supplemental memo.
Ms. DeGette. No objection.
Mr. Stearns. No objection.
[The information appears at the conclusion of the hearing.]
I thank the members for coming today and for the questions.
I am sorry that Solyndra executives were unable to provide any
answers. Nonetheless, the committee's investigation will
continue to go forward.
The committee sent three document requests this week, one
to the Department of Energy seeking their communications with
the White House on Solyndra, and two to Solyndra's investors,
Argonaut and Madrone. We are continuing to get documents from
the Department of Energy and the White House about their
involvement in the guarantee. We will get to the bottom of what
the administration understood about Solyndra's financial
position and why they continued to believe Solyndra was a good
bet for $535 million in taxpayers' money, even though DOE and
OMB staff raised repeated concerns during their reviews about
the very same financial problems that resulted in Solyndra's
bankruptcy 2 years later.
We will also press forward in trying to understand the
political and time pressures that may have pushed this loan out
the door before it was ready for prime time. And despite Mr.
Harrison's and Mr. Stover's inability to answer questions
today, we will determine whether Solyndra played any part in
the government's failure to accurately assess the risks this
deal presented to the government and the United States
taxpayers. This hearing----
Ms. DeGette. Mr. Chairman?
Mr. Stearns. Yes.
Ms. DeGette. If you will yield.
Mr. Stearns. I will yield.
Ms. DeGette. The chairman has stated about the continuing
document requests that are outstanding. I am wondering if the
chairman has reviewed the request that Mr. Waxman and I have
made about having general hearings about our policies and
incentives about whether U.S. manufacturers can compete in the
global clean energy market, and also the request that Mr.
Waxman and I had made to obtain the testimony of the
representatives of Argonaut and Madrone, the two private equity
companies that invested in Solyndra, so we can get a more clear
picture from that angle.
Mr. Stearns. We are taking both your suggestions under
advisement. We think they are very good suggestions.
Ms. DeGette. Thank you.
Mr. Stearns. With that, the hearing is now adjourned.
[Whereupon, at 10:15 a.m., the subcommittee was adjourned.]
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