Dear Steve Chu: Send Us All Your DOE Files on 1705. Thanks, Congress

Someone mentioned "due diligence" - a point I'd like to further explore. At a high level, there are two major steps to the process before a company can lose the money it receives. First it has to receive a loan guarantee. Then it has to receive the money from a lender (because a guarantee is just that a guarantee, not money). In the 80s I was a consultant to, and then a senior officer of, the US Synthetic Fuels Corp., a US government corporation formed late in the Carter administration. Our authority was to issue federal loan guarantees to alternative energy projects. I found that, for such high-risk projects, the issuance of a US government guarantee was a necessary, but not a sufficient, step for the owners to receive funds. Financial institutions would still perform extensive due diligence on the borrower and the project, because the last thing lenders wanted to do was to try to collect from the US government against the loan guarantee. So, Ive been puzzled. Even if the US governments Department of Energy saw fit to issue the loan guarantee, what lender saw fit to actually provide the $535 million? It turns out that it was also the US government, through the Federal Financing Bank (FFB). Why was the FFB involved? According to its website, FFB has statutory authority to purchase any obligation issued, sold, or guaranteed by a federal agency to ensure that fully guaranteed obligations are financed efficiently. Was there no other source of efficient financing? Did the FFB perform any due diligence? Did the FFB step up because independent lenders wouldn't lend to Solyndra despite the loan guarantee? Was this a package deal that bypassed what would normally be a legitimate third-party project review? The answers to these questions would show the extent to which this was a political or a business deal. If it was a business deal, I'd agree that all deals don't turn out to be winners. If, however, this was a political deal, shame on those involved.