House Energy and Commerce Committee Republicans heaped criticism on Energy Secretary Steven Chu today in a five-hour hearing on the loan guarantee that the Department of Energy provided to a failed California solar company.

And with the Solyndra loan becoming a major political headache for the Obama administration, Chairman Emeritus Joe Barton (R-Texas) said the White House may be setting up Chu to be the "fall guy" in the loan scandal.

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.

Barton and other Republicans repeatedly asserted that there was a widening rift between Chu and the White House. Rep. Cliff Stearns (R-Fla.), who chairs the investigations panel, pointed out the White House recently launched an independent audit of DOE's loan program in the wake of the Solyndra bankruptcy two-and-a-half months ago.

"Doesn't the fact that the president appointed somebody outside of DOE show he doesn't think you have the financial wherewithal?" Stearns asked Chu. "It seems to me the president has lost confidence in you and your financial management acumen. You don't take it as a personal affront to your integrity?"

Stearns also noted that White House emails uncovered during the investigation show that even a top former campaign adviser to President Obama suggested that while the Nobel Prize-winning Chu is a brilliant scientist, he is not cut out for political rough-and-tumble.

Energy and Commerce Chairman Fred Upton (R-Mich.) expressed frustration that no one in the Obama administration has yet taken responsibility for the half-billion-dollar loss to taxpayers that Solyndra caused and repeatedly pressed Chu to apologize for the decisions he signed off on as part of the deal.

But Barton suggested the blame will fall on Chu when President Obama asks him to step down.

In response, White House spokesman Eric Schultz issued a statement saying Chu has the president's "full confidence."

"Under his leadership," Schultz said of Chu, "we are on track to double the generation of renewable energy from sources like wind and solar, we are taking steps to ensure that we can continue to develop our domestic resources safely and responsibly, while working to increase our nation's clean energy share from other sources like natural gas, nuclear power, and clean coal."

While the administration and House Republicans have debated whether political pressure was a factor in the granting of the DOE loan to a company that was backed financially by a top Obama campaign contributor, Barton said the committee investigation has shown that a loan restructuring by DOE violated the Energy Policy Act of 2005.

The restructuring effort, which a Treasury Department official acknowledged in an earlier hearing was highly unusual, was carried out earlier this year in an effort to inject new money into Solyndra to keep the company afloat.

Restructuring subordinated $75 million in taxpayer funding behind new money from outside investors. Because of the restructuring, those investors will have first dibs on any money recovered from Solyndra's bankruptcy proceedings.

Barton pointed to a provision in the Energy Policy Act that dictates that a DOE loan "shall not be subordinate to other financing. "Do you understand what the word 'shall' means?" Barton asked Chu.

Chu pointed out that DOE's legal counsel determined the restructuring effort was legal because a separate provision in the Energy Policy Act gives the secretary broad authority to act in the best interests of the taxpayers.

And while Republicans have criticized Chu for not seeking advice from the Department of Justice before signing off on the subordination of the loan -- as was recommended at the time by Treasury -- Chu said the White House Office of Management and Budget was told of the plan.

"OMB ... did not object to this position," Chu said. "Believe me, the OMB is not shy to object when they disagree with anything we or any other agency does."

Democrats repeatedly pointed to a legal opinion written last week by a former DOE general counsel under the George W. Bush Administration who concluded that DOE's actions were legal under the Energy Policy Act.

Rep. Steve Scalise (R-La.) said he believes it is time for DOJ to get involved in the subordination issue while there is still some time to recoup taxpayer money through the ongoing bankruptcy proceedings.

"I think we need to challenge the subordination of the taxpayer, because I think it's illegal, and then hopefully we can reverse that so at least the taxpayers will have some opportunity to get reimbursed," Scalise said. "And frankly, I'm disappointed that nobody in the administration seems to be concerned about getting the taxpayer money back. They're concerned about the politics."

Energy and Commerce Committee ranking member Henry Waxman (D-Calif.) said it is Republicans who are concerned about politics, since they have little to show for their eight months of investigating Solyndra.

"We have lost the money, it's unfortunate, but there's no scandal. There's nothing there," Waxman said. "Stop dancing on Solyndra's grave. This is a distraction of the work that we should be doing."