Treasury Department officials flagged legal issues on the Energy Department's loan to Solyndra, but none of the department's recommendations were binding, Treasury officials said in Capitol Hill testimony Friday.

The Treasury officials had been called before the Subcommittee on Oversight and Investigations, under the House Energy and Commerce Committee. But the hearing provided little new ammunition for Republicans, who have tried to show DOE approved the Solyndra loan, and kept it going, against the advice of other agencies.

Gary Grippo, Treasury's deputy assistant secretary for fiscal operations and policy, said his agency plays two roles in any DOE loan guarantee: It has to be consulted on the loan, and if it involves a 100 percent loan guarantee, its Federal Financing Bank disburses the funds.

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.

Republicans on the subcommittee wanted to know this: Did Treasury render a legal opinion when DOE arranged, in February, for $75 million to keep Solyndra alive? The position means private investors will get repaid before the government does, now that the company is bankrupt.

Subpoenaed emails suggest there were Treasury officials who questioned the legality of the move. But Grippo said Treasury never rendered a legal opinion on the matter, and that it's not Treasury's role to interpret a statute pertaining to DOE.

DOE was required to consult Treasury before offering a conditional commitment -- the penultimate stage before a loan is complete -- to Solyndra. But Grippo said DOE did, and that Treasury never had the power to approve or reject the loan.

Republicans continue to probe documents

In the hearing, Republicans asked whether DOE had to consult the Justice Department before the $75 million restructuring and "subordination" of taxpayer dollars.

Gary Burner, the Federal Financing Bank's chief financial officer, said he didn't know. When agencies are in situations like DOE's, he said, some agencies have the authority to move ahead on their own, while others have to consult the Justice Department. He said he didn't know where DOE fell.

Damien LaVera, a spokesman for DOE, said in an email that Justice would have to be consulted only in case of "compromise" or the "forgiveness of interest."

"To compromise a loan is a technical term that involves acceptance of less than full amount due in full satisfaction of the debt. That was not the case in this instance," he said. Nor was any interest waived or forgiven.

The subcommittee staff continue to request new documents and sort through tens of thousands of pages already sent by federal agencies. Since Solyndra went bankrupt in September, the subcommittee has taken testimony from DOE, Treasury, and Office of Management and Budget officials; two Solyndra executives took the Fifth Amendment when called to Congress last month.

Sources told E&E that Energy Secretary Steven Chu may be among the next to testify (E&ENews PM, Oct. 14).