Republicans Question the Legality of Solyndra Loan Restructuring

October 15 00:00 2011

New York, October 15 ( – Two senior Treasury officials Gary Grippo and Gary Burner replied in negative when they were asked by Republican members whether they had seen a federal loan restructuring like the Energy Department loan to a failed solar panel maker. The half-billion dollar loan to Solyndra had been restructured to enable private investors move ahead of taxpayers for repayment on part of it in case of a default.

Grippo, a deputy assistant treasury secretary and Burner, chief financial officer at the Federal Financing Bank, which made a $528 million loan to Solyndra in 2009, stopped short of declaring the loan restructuring illegal, as alleged by the Republicans. The testimony by the Treasury officials came after a hearing on the Solyndra loan erupted in a partisan skirmish.

The hearing Friday dwelt largely on newly released emails showing that the Treasury Department was troubled with the possibility that the loan restructuring, approved earlier this year, could have violated federal law. The loan restructuring was defended by administration officials who said that if cash had not been paid to Solyndra earlier this year, it would have faced immediate bankruptcy and more than 1,000 people would have been thrown out of work.

However, even with the federal help, Solyndra closed down on Aug.31 and all its workers lost their jobs.