Shining some sunlight on solar loan guarantees: lessons for nuclear?
Ben Gemen over at The Hill describes as "hardball" the effort by House Republicans to bring to light documents and decision making behind a $535 million loan guarantee for a new facility to be built by Solyndra. Hardball is appropriate for an unprecedented level of taxpayer exposure for investment into individual, privately-owned assets.
I hope the Congressional effort is successful in teasing out real documents that would allow real oversight of DOE's loan guarantee program. DOE's Loan Programs Office has been notoriously resistant to transparency, despite operating at a scale that already runs into the tens of billions of dollars of commitments ($39.8 billion as of July 2011). Proposals to extend this federal-financing approach through a "clean energy" bank of sorts have been floated with figures in the hundreds of billions. This is not a program to be glossed over.
Gemen reports that
In a letter to [Rep. Cliff] Stearns Tuesday, OMB Deputy General Counsel William Richardson, Jr. notes that OMB "made available" 1,400 pages of emails and attachments this week, which follows hundreds of other pages made available earlier.
It is impossible from the outside to tell how material this information is, and whether the critical items on risk management, potential conflicts of interest, and likelihood of market success have been provided.
Nonetheless, I'm guessing that the data dump on Solyndra is about 1,400 pages more than what has been provided for DOE's commitment to the Vogtle nuclear power project in Georgia. At roughly $8.3 billion (which is really a direct loan, as program rules require a loan of this scale come from the Federal Financing Bank), DOE's support for Vogtle is nearly 16 times as large as what taxpayers are risking for Solyndra. Surely if a subpoena is warranted for gathering data on the Solyndra project, it is warranted for Vogtle as well.
I have been critical of the weak structure of DOE's foray into large scale loan guarantees for energy infrastructure since the program's inception. It is not as though the Department has a robust and successful history of this type of capital deployment. Here are the my formal comments to DOE on the proposed program structure back in 2007. They were ignored then; DOE focused mostly on loosening program rules during that round of comments based on input from interested investment banks, firms that did or would represent many of the beneficiaries of the guarantee program itself. Some of these banks (e.g., Merrill and Lehman) imploded soon after due to the very types of conflicts of interest and weak oversight that remain a concern in the DOE lending initiative.
Though DOE remains under pressure to push money out the door, and in the process continues to ignore most of these structural issues today, the problems -- and the financial exposure -- remain. It would be a service to all taxpayers if Cliff Stearns extended his interest in fiscal prudence and oversight beyond a single project and to the program overall.