The saga over Solyndra promises to continue in the new year, as House Republicans expand their probe into the California solar firm's loan guarantee and rail against the company's plans to give employees up to $500,000 in bonuses even though it has filed for bankruptcy.

House Energy and Commerce Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), the chairman of the subcommittee who has led the Solyndra investigation, sent letters this week to two law firms -- one of which Stearns says advised DOE to not subordinate taxpayer funds in a restructuring of the company's half-billion-dollar loan guarantee.

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.

In the controversial move, DOE put $75 million in taxpayer funding behind new money from outside investors, meaning those investors will have first dibs on any money recovered from Solyndra's bankruptcy proceedings.

New York law firm Morrison & Foerster advised the agency in a memo to not subordinate the taxpayers' money, but DOE went on to develop its own legal opinion, Stearns said.

"We are trying to determine if there were additional documents or discussions regarding Solyndra and the loan restructuring, as well as why Susan Richardson, chief counsel for the loan program, ignored this legal advice and put taxpayers at the end of the line if the faltering Solyndra went bankrupt," Stearns said in a statement.

The letter to Keith Wetmore, chairman at Morrison & Foerster, asks for all communications between the firm and DOE related to the subordination issue, as well billing records.

Stearns and Upton also sent a letter to Wilson Sonsini Goodrich & Rosati, a California law firm that advised Solyndra on the loan guarantee. The firm was paid for its work with loan guarantee funds, according to the letter, and the lawmakers are seeking all documents and invoices related to Solyndra.

DOE spokesman Damien LaVera said in an email that the extensive investigation has yet to disprove the agency's contention that it properly reviewed the loan.

"The committee has conducted an 11 month investigation that has included 185,000 pages of documents provided to Congress, nine committee staff briefings, five congressional hearings, and interviews with the company's investors only to learn what we have consistently said: The decisions related to this loan were made solely on the merits after careful review by experts in our loan program," he said.

'Outrageous' bonuses

The letters come as Solyndra gains renewed media interest with its request to a bankruptcy judge that it be allowed to award up to $500,000 in bonuses to a few remaining employees.

In a motion filed this week, Solyndra's executives asked for approval for an incentive plan that would give bonuses worth between 8 and 30 percent of base pay to up to nine equipment engineers, four facilities personnel, six general and finance personnel and two information technology personnel.

The bonuses are necessary to avoid a loss of personnel that may "seriously jeopardize the ongoing sales efforts and, should it continue, require the engagement of experienced consultants at a much higher cost than maintaining the existing personnel," according to the motion.

Rep. Morgan Griffith (R-Va.) called the request "outrageous" in a statement and asked the Obama administration to oppose the bonuses in court.

"The American taxpayers are already on the hook for the $535 million Solyndra loan guarantee, not to mention the taxpayers aren't even the first creditor in line for $75 million because the Department of Energy ignored the law and subordinated that amount," he said. "Many questions about how this money was handled remain unanswered. However, there is no question that these bonuses would be an inappropriate waste of taxpayer assets."

A salient political issue?

Republicans today continued their political assault on Democrats for the Solyndra debacle. The National Republican Congressional Committee sent news releases into the districts of 50 potentially vulnerable House Democrats, seeking to tie them to any scandal surrounding the Solyndra bankruptcy.

"It's outrageous enough that Mike McIntyre supported a $1 trillion failed stimulus package, but it's even more outrageous that hundreds of millions were spent to fund a failing company like Solyndra," said NRCC communications director Paul Lindsay in a news release attacking Rep. Mike McIntyre (D-N.C.). "Not only is McIntyre responsible for this irresponsible investment, but he'll also have to explain to his North Carolina constituents why Solyndra's senior employees are receiving bonuses at the expense of hard-working American taxpayers."

Also on the receiving end of GOP attacks: Democratic Reps. Jason Altmire (Pa.), John Barrow (Ga.), Sanford Bishop (Ga.), Tim Bishop (N.Y.), Leonard Boswell (Iowa), Bruce Braley (Iowa), Lois Capps (Calif.), Russ Carnahan (Mo.), Kathy Castor (Fla.), Ben Chandler (Ky.), David Cicilline (R.I.), Gerry Connolly (Va.), Jim Cooper (Tenn.), Jim Costa (Calif.), John Garamendi (Calif.), Raúl Grijalva (Ariz.), Brian Higgins (N.Y.), Jim Himes (Conn.), Ruben Hinojosa (Texas), Tim Holden (Pa.), Rush Holt (N.J.), Steve Israel (N.Y.), Bill Keating (Mass.), Ron Kind (Wis.), Larry Kissell (N.C.), Rick Larsen (Wash.), David Loebsack (Iowa), Jim Matheson (Utah), Carolyn McCarthy (N.Y.), Jerry McNerney (Calif.), Michael Michaud (Maine), Brad Miller (N.C.), Bill Owens (N.Y.), Frank Pallone (N.J.), Ed Perlmutter (Colo.), Gary Peters (Mich.), Chellie Pingree (Maine), David Price (N.C.), Nick Rahall (W.Va.), Loretta Sanchez (Calif.), Kurt Schrader (Ore.), Adam Smith (Wash.), Betty Sutton (Ohio), John Tierney (Mass.), Paul Tonko (N.Y.), Niki Tsongas (Mass.), Pete Visclosky (Ind.), Tim Walz (Minn.) and John Yarmuth (Ky.).

Investigations aplenty

Meanwhile, House Oversight and Government Reform Chairman Darrell Issa (R-Calif.) also expanded his probe into the DOE loans to two other struggling companies that received federal backing under Section 1705 of the 2009 economic recovery act, seeking documents and communications related to the company's government aid.

The first company, Beacon Power, in 2010 received two Obama administration grants of more than $26 million in total as well as a conditional loan guarantee of $43 million for a flywheel energy storage plant aimed at preventing grid power surges. Beacon filed for bankruptcy in October and later said it would sell the New York flywheel plant in question to help cover its obligations (E&ENews PM, Nov. 21, 2011).

The second company in the oversight committee's crosshairs, Nevada Geothermal, got a $98.5 million partial and conditional DOE loan guarantee in 2010 for its Blue Mountain project. Since then, however, auditors have hit the company with negative financial projections, underscoring its vulnerability if the federal money had not materialized, Issa wrote in a letter to Chu yesterday.

Issa's party maneuvered last year to tie Senate Majority Leader Harry Reid (D-Nev.) to the troubles of his home-state geothermal company, but fellow Nevada Sen. Dean Heller (R) stood by his previous support for the Blue Mountain plant (E&E Daily, Oct. 5, 2011).

Click here to read Issa's letter to DOE on Nevada Geothermal.

Click here to read Issa's letter to DOE on Beacon Power.

Reporters Elana Schor and Jennifer Yachnin contributed.