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Solyndra controversy dominates confirmation hearing

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Senate Republicans used a confirmation hearing yesterday for three of the Energy Department's newest nominees to blast the agency's troubled loan program, including a half-billion-dollar loan guarantee to the now-bankrupt solar company Solyndra.

Several senators, including ranking Republican Sen. Lisa Murkowski of Alaska, used the Senate Energy and Natural Resources Committee confirmation hearing to attack the controversial spending program that awarded a $535 million loan guarantee to Solyndra in 2009.

The company filed for bankruptcy protection last week. And reports this week have emerged about the company's cozy ties with the Obama administration and alleged political pressure to award the loan before the application was thoroughly vetted.

"My concern is that we have a colossal failure within the DOE loan guarantee program, and it's calling into question every loan guarantee that has been issued and clearly any future loan guarantees going forward," Murkowski said at the hearing on Obama's nominees to be DOE's general counsel, assistant secretary of energy and director of the Office of Minority Economic Impact.

DOE's program that backs private-sector loans for renewable energy programs was created in a broad 2005 energy law and was later modified by the stimulus law. Solyndra was the first company to receive a loan guarantee under the modified program, which does not require recipients to pay a credit subsidy to cover the value of the risk associated with the loan, essentially leaving taxpayers on the hook for the risk.

"It is unfortunate that the stimulus bill subverted the original intent of the loan guarantee program," Murkowski said.

Murkowski and Sen. John Barrasso (R-Wyo.) questioned two of the nominees -- Gregory Woods, the nominee to be general counsel, and David Danielson, the nominee to be assistant secretary of energy for energy efficiency and renewable energy -- about how they would have handled the review of Solyndra's loan application, but they remained largely noncommittal in their response.

"I actually don't have any direct experience with Solyndra as a company so I wouldn't be able to make a judgment like that," Danielson told Barrasso when asked whether he would have invested $500 million of his client's money in the company.

Similarly, Woods walked around a question from Barrasso about how he would help safeguard DOE employees from political pressure to issue loans quickly.

"If confirmed, I think my job would be to make sure all these loans are made in accordance with the law," Woods said. "I think it's important all these loans be made in accordance with their technical and financial merit. That is the approach that I've been familiar with for many years in the private sector."

In response to a later line of questioning, Woods told Murkowski that a team of lawyers review transaction documents to ensure they are consistent with the terms of the loan guarantees but added that those lawyers are not involved in determining the projects' business merits.

But Murkowski was not satisfied.

"I'm hoping that the finance guys aren't just checking the boxes," she said. "I'm going to do a little more digging about the way that things are structured within DOE, because right now I don't have the level of confidence that I want to have.

"We're putting taxpayer dollars at risk," Murkowski added. "We want to know for a fact that we've got systems that work."

Other than the loan guarantee issue, yesterday's hearing drew little controversy. Committee Chairman Jeff Bingaman (D-N.M.) said the committee has not yet set a date to vote on the nominees' appointments.