A hearing that House Republicans had hoped would highlight an interagency disagreement over the legality of the Solyndra loan guarantee deal turned today into a committee brawl over the release of a Department of Energy legal document that Democrats accused their GOP colleagues of hiding from the public.

Calling the House Energy and Commerce Committee's eight-month-long investigation a "kangaroo court," Reps. Henry Waxman (D-Calif.) and Diana DeGette (D-Colo.) effectively changed the focus of this morning's hearing by charging investigation subcommittee Chairman Cliff Stearns (R-Fla.) of suppressing evidence favorable to DOE.

SPECIAL REPORT

Solyndra, a solar manufacturer that was given a $535 million loan guarantee and touted by the White House as a model for the clean energy economy, has filed for bankruptcy. E&E examines how it got there and what it means. Click here to read the report.

The six-page DOE memo, which was added to the record after more than two hours of debate, is a legal opinion written on Feb. 15 that lays out the department's justification for allowing the government's 2009 Solyndra loan to be subordinated behind new money that be put into the company by private investors.

Now that Solyndra has gone out of business, the subordination means private investors can recoup their cash from bankruptcy proceedings ahead of the government, which sank $527 million into the solar tube manufacturing company.

Republicans have charged that that subordination violated the Energy Policy Act of 2005, which prohibits it and represents a blatantly illegal action by DOE.

DOE maintains it had legal authority to subordinate the loan because a subsequent section of the law provides the department with broad authority to act to protect taxpayers in case of default. In other words, DOE took the position that Energy Secretary Steven Chu could subordinate the loan if he believed it would save taxpayers' money in the end.

The department's position proved wrong, but Waxman argued it did not act illegally.

"I don't see evidence of wrongful conduct by government officials," he said, "just a bad investment decision."

Last week, GOP investigators believed they had found others inside the Obama administration who shared their opinions on the subordination issue when a recently released set of emails showed at least two high-ranking Treasury Department officials had expressed concern to DOE their loan restructuring.

"Judging from these emails, it is clear that senior officials at the Department of Treasury were not sufficiently consulted about the restructuring, and when they offered their opinions and warning signs, they were ignored, like so many of the others along the way," Stearns said in his opening statement this morning.

The two Treasury officials who testified today acknowledged that subordinating a government loan is highly unusual. Treasury's chief financial officer said he had not seen such a move on a loan in his 28 years at the department. They also acknowledged that the department had expressed concerns about the move. But they also testified there was no law that required DOE to act on their recommendations.

"Treasury's limited role of consulting with DOE on the terms and conditions of guarantees falls within the context of a broader undertaking by DOE," Assistant Secretary Gary Grippo said in testimony he submitted today.

"Treasury's interaction with DOE supplements, rather than duplicates, DOE's efforts, and aims to provide independent insight and input for DOE to consider as it executes its responsibilities under the loan guarantee program."