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Becky Bowers
By Becky Bowers November 17, 2011

Did the program that funded the Solyndra loan start under George W. Bush? David Plouffe says so

With the collapse of Solyndra generating bad headlines for the Obama administration, White House officials are defending the program that helped fund the solar power company's now-shuttered Silicon Valley factory.

White House senior adviser David Plouffe said on Meet the Press that the loan program had bipartisan support — including from former President George W. Bush. 

We wondered: Did the Energy Department's loan guarantee program have Bush's support?

Solyndra, which manufactured unique solar panels based on cylindrical cells that didn't require silicon, was once a burgeoning clean energy superstar, attracting more than $1 billion from private investors. In 2009, the Obama administration approved a $535 million loan guarantee that helped the company build a new factory in Fremont, Calif. It became a poster child for the president's stimulus efforts. But in August 2011, the factory suddenly closed, and by September the company had filed for Chapter 11 bankruptcy protection.

The company's failure prompted an FBI raid, a congressional investigation and claims of "crony capitalism" by critics of the administration, because a major Solyndra investor was connected to a billionaire who had raised campaign cash for President Barack Obama. (We explained that connection when we rated a recent political ad that said Obama used taxpayer money "to help his friends at Solyndra." We found the ad's claim Mostly False.)

Meanwhile, the loan guarantee program itself has attracted greater scrutiny.

On Oct. 30, 2011, Meet the Press host David Gregory brought up Solyndra in an interview with Plouffe, asking if taxpayers had been ripped off. Plouffe defended the administration's efforts to "win the clean energy race." Here's the part of the exchange we're checking:

Gregory: "Should government be playing venture capitalist to try to prop these industries up?"

Plouffe: "Well, we believe this loan program is very important. By the way, it was a program that was supported by President Bush. So there's been support in both parties. Many of the members of Congress who offered criticism themselves were lobbying for funds for companies like this."

Program dates back to 2005

The Energy Department's loan guarantee program was created as part of the Energy Policy Act of 2005, passed by a Republican-controlled Congress and signed by Bush.

In his signing speech, Bush lauded the bill's support for clean technology, though he didn't specifically mention the loan guarantees.

The loan guarantees were designed to "support innovative clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks."

Republicans, including Bush, emphasized the program's benefits for nuclear energy and biofuels. The president touted the new energy law in his 2007 State of the Union address. His energy secretary, Samuel Bodman, regularly mentioned the loan guarantees in speeches on renewable energy. The Energy Department issued its final rules for the program in 2007, along with a list of 16 companies that made the cut for to apply for its first round of awards, and Solyndra was among them.

House Republicans investigating Solyndra have claimed that the Bush administration ultimately rejected the Solyndra loan, but that's not quite the case. Democrats on the House Energy and Commerce Committee and news media point out that Bush energy officials wanted to get the loan closed on their way out the door — it was listed as the first of their "three highest priorities through January 15." (Obama took office Jan. 20, 2009.) But the Energy Department's credit committee held things up for more analysis. 

"The number of issues unresolved makes a recommendation for approval premature at this time. Therefore, the committee, without prejudice, remands the project to the LGPO [Loan Guarantee Program Office] for further development of information," the committee said.

It noted Solyndra's project "appears to have merit." But the clock had run out.

That didn't keep Bush from touting the loan guarantee program on his way out of office. On Jan. 6, 2009, in remarks on conservation and the environment from the Eisenhower Executive Office Building, he said, "We dedicated more than $18 billion to developing clean and efficient technologies like biofuels, advanced batteries and hydrogen fuel cells, solar and wind power, and clean, safe nuclear power. We're providing more than $40 billion in loan guarantees to put these technologies to use."

Ultimately, the Bush administration program didn't finalize a single loan guarantee.

Featured Fact-check

Stimulus expands old program

While the loan guarantee program originated under Bush, it grew under Obama.

Solyndra applied for help under Section 1703 of Title XVII of the Energy Policy Act of 2005. The federal stimulus bill signed by Obama expanded Title XVII by adding Section 1705. The new program was temporary, designed to boost certain types of clean energy projects that could start construction by Sept. 20, 2011. The new section was an even better deal for winning projects, because taxpayers covered the "credit subsidy costs" that under Bush businesses had to pay themselves. Solyndra's loan guarantee was awarded under Section 1705.

Is it fair to say the loan guarantee program "was supported by President Bush" when it was updated under Obama? took issue with a similar statement by Obama — that the loan guarantee program predated him — pointing out that the Bush administration created 1703, while Solyndra won funding under 1705.

But the Energy Department says pretty clearly that "Section 1703 and Section 1705 fall under the LGP (loan guarantee program)." We think Bush's broad support for loan guarantees for high-risk clean energy provides reasonable support for Plouffe's statement — especially since the Bush administration program also found merit in Solyndra's project.

Our ruling

Plouffe said that the loan guarantee program that awarded half a billion dollars in guarantees to Solyndra "was supported by President Bush." The program was created on Bush's watch by a law he signed and promoted. The program grew under the Obama administration, which ultimately awarded Solyndra's loan guarantee under a new section of the law created by the stimulus. The Bush administration, though, promoted the loan guarantee program, and Bush himself touted it on his way out of office. There's also evidence his administration specifically prioritized Solyndra's project. We find Plouffe's statement Mostly True.

Our Sources

CQ Newsmaker Transcripts, "David Gregory Hosts NBC's 'Meet the Press,'" Oct. 30, 2011

E-mail interviews with White House spokesman Eric Schultz, Nov. 15-16, 2011

PolitiFact Florida, "Solyndra ad claims President Barack Obama gave taxpayer money to help his campaign donors at failed solar company," Nov. 15, 2011

Government Accountability Office, "New Loan Guarantee Program Should Complete Activities Necessary for Effective and Accountable Program Management," July 2008

Government Accountability Office, "Further Actions Are Needed to Improve DOE’s Ability to Evaluate and Implement the Loan Guarantee Program," July 2010

Taxpayers for Common Sense, "Taxpayer Risks with the Loan Guarantee Program," April 10, 2011

Taxpayers for Common Sense, "Department of Energy: Loan Guarantee Program Overview," Sept. 21, 2011

Taxpayers for Common Sense, "DOE Loan Guarantees: Overview, Risks and More," Nov. 3, 2011

The Committee of Energy and Commerce, "White House Transcript: President Signs Energy Policy Act," accessed Nov. 16, 2011

U.S. Energy Department, "Timeline of the Energy Department's Review and Approval Process for the Solyndra Loan," accessed Nov. 16, 2011

U.S. Energy Department, DOE Announces Final Rule for Loan Guarantee Program, Oct. 4, 2007

U.S. Energy Department, Loan Programs Office, accessed Nov. 15, 2011

White House, President Bush Delivers State of the Union Address, Jan. 23, 2007

White House, Twenty In Ten: Strengthening America's Energy Security, Jan. 23, 2007

White House, "President Bush Discusses 2008 G8 Summit," July 2, 2008

White House, "President Bush Discusses Conservation and the Environment," Jan. 6, 2009

The Hill, "Bush-era loan chief 'probably would have made the same decision' on Solyndra," Oct. 3, 2011

House Energy & Commerce Committee Democrats, "Committee Memo Clarifies Incorrect Assertions Regarding Solyndra Investigation," Sept. 22, 2011

New York Times, In Rush to Assist a Solar Company, U.S. Missed Signs, Sept. 22, 2011

Time, Viewpoint, Michael Grunwald, "Solyndra Hypocrisy: David Vitter Sought Energy Loans He Now Seeks to Scrutinize," Sept. 19, 2011, "Obama's Solyndra Problem," Oct. 7, 2011

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Did the program that funded the Solyndra loan start under George W. Bush? David Plouffe says so

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