[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





   THE OBAMA ADMINISTRATION'S GREEN ENERGY GAMBLE: WHAT HAVE ALL THE 
                      TAXPAYER SUBSIDIES ACHIEVED?

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON REGULATORY AFFAIRS,
               STIMULUS OVERSIGHT AND GOVERNMENT SPENDING

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 16, 2012

                               __________

                           Serial No. 112-146

                               __________

Printed for the use of the Committee on Oversight and Government Reform









         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform
                                _____

                  U.S. GOVERNMENT PRINTING OFFICE

74-453 PDF                WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001








              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Regulatory Affairs, Stimulus Oversight and Government 
                                Spending

                       JIM JORDAN, Ohio, Chairman
ANN MARIE BUERKLE, New York, Vice    DENNIS J. KUCINICH, Ohio, Ranking 
    Chairwoman                           Minority Member
CONNIE MACK, Florida                 JIM COOPER, Tennessee
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          BRUCE L. BRALEY, Iowa
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania












                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 16, 2012.....................................     1

                               WITNESSES

Mr. Jim Nelson, President and CEO, Solar3D, Inc.
        Oral Statement...........................................     4
        Written Statement........................................     7
Mr. Greg Kats, President, Capital-E
        Oral Statement...........................................    15
        Written Statement........................................    17
Mr. Craig Witsoe, CEO, Abound Solar, Inc.
        Oral Statement...........................................    30
        Written Statement........................................    32
Mr. Brian D. Fairbank, President and CEO, Director, Nevada 
  Geothermal Power, Inc.
        Oral Statement...........................................    38
        Written Statement........................................    40
Mr. Michael J. Ahearn, Chairman of the Board of Directors, First 
  Solar, Inc.
        Oral Statement...........................................    46
        Written Statement........................................    48
Mr. John M. Woolard, President an CEO, Brightsource Energy, Inc.
        Oral Statement...........................................    51
        Written Statement........................................    53

                                APPENDIX

Chairman Issa's Opening Statement, for the Record as agreed to by 
  unanimous consent..............................................    98
Elijah E. Cummings, Ranking Member, A Member of Congress from the 
  State of Maryland, Opening Statement...........................   100

 
   THE OBAMA ADMINISTRATION'S GREEN ENERGY GAMBLE: WHAT HAVE ALL THE 
                      TAXPAYER SUBSIDIES ACHIEVED?

                              ----------                              


                        WEDNESDAY, MAY 16, 2012,

                  House of Representatives,
      Subcommittee on Regulatory Affairs, Stimulus 
                Oversight, and Government Spending,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 9:31 a.m., in 
Room 2154, Rayburn House Office Building, Hon. Jim Jordan 
[chairman of the subcommittee] presiding.
    Present: Representatives Jordan, Buerkle, DesJarlais, 
Guinta, Kelly, Kucinich, Issa, Gowdy Cummings, and Norton.
    Also Present: Representative Mulvaney.
    Staff Present: Alexia Adrolina, Majority Assistant Clerk; 
Michael R. Bebeau, Majority Assistant Clerk; Will L. Boyington, 
Majority Staff Assistant; Molly Boyl, Majority Parliamentarian; 
Lawrence J. Brady, Majority Staff Director; Drew Colliatie, 
Majority Legislative Assistant; John Cuaderes, Majority Deputy 
Staff Director; Adam P. Fromm, Majority Director of Member 
Services and Committee Operations; Linda Good, Majority Chief 
Clerk; Tyler Grimm, Majority Professional Staff Member; Peter 
Haller, Majority Senior Counsel; Christopher Hixon, Majority 
Deputy Chief Counsel, Oversight; Mark D. Marin, Majority 
Director of Oversight; Kristina M. Moore, Majority Senior 
Counsel; Laura L. Rush, Majority Deputy Chief Clerk; Jeff 
Solsby, Majority Senior Communications Advisor; Rebecca 
Watkins, Majority Press Secretary; Michael Whatley, Majority 
Professional Staff Member; Jaron Bourke, Minority Director of 
Administration; Lisa Cody, Minority Investigator; Ashley 
Etienne, Minority Director of Communications; Chris Knauer, 
Minority Senior Investigator; Adam Koshkin, Minority Staff 
Assistant; Dave Rapallo, Minority Staff Director; and Donald 
Sherman, Minority Counsel.
    Mr. Jordan. Let me thank all our witnesses for being here. 
You know how this works; you have to listen to us give a bunch 
of speeches before we get to your important testimony. So bear 
with us and we will get to you as quickly as we can.
    Before we do opening statements, I would ask unanimous 
consent that our colleague from South Carolina, Mr. Mulvaney, 
be allowed to participate in today's hearing. Without 
objection, so ordered.
    We will start with opening statements. We anticipate the 
Chairman from the full Committee and the Ranking Member of the 
full Committee, I think, joining us, so we will probably have 
four opening statements.
    President Obama's 2009 stimulus directed nearly $90 billion 
of taxpayer funds toward green initiatives. The President told 
the American people that ``green jobs would be a major force 
not just for environmental conservation, but for economic 
recovery as well.'' The President said that we will harness the 
sun and the winds and the soil to fuel our cars and run our 
factories, and he promised that our Country would create 
millions of green jobs which would help us compete in the 
global economy.
    However, three years into this gamble, available evidence 
demonstrates these efforts have wasted vast sums of taxpayer 
money and have failed to achieve the stated goals. Today's 
hearing is a continuation of the work done at the full 
Committee and this Subcommittee seeking to ensure that the 
American people know how their money is being spent.
    Four of the companies testifying before this Subcommittee 
today, Abound, First Solar, Nevada Geothermal, and 
BrightSource, cumulatively received $5 billion in loan 
guarantees from the Department of Energy, one-third of the 
entire loan guarantee portfolio. I want to thank each of these 
companies for testifying today. I know many of you had to 
travel great distance, and we appreciate you being here.
    Alternative energy certainly has a place in our economy, 
and we hope that all these companies succeed. But the best way 
to get cheap energy to American consumers is to let the market 
forces work, not to allow bureaucrats in Washington to select 
who wins and who loses.
    I also want to thank our other witnesses for appearing 
today, especially Mr. Nelson, the CEO of Solar3D. Jim has shown 
that billions of taxpayer dollars are not necessary to advance 
green technology.
    When taxpayers lost over half a billion dollars on 
Solyndra, the Obama Administration said that it was just one 
bad apple and the rest of the portfolio was strong. It is 
becoming increasingly clear that Solyndra was just the tip of 
the iceberg in a sea of taxpayer risk.
    Too often this Administration takes liberties with the 
American people's money based on the flawed assumption that 
Government knows best. Today is about understanding what 
happens when the Federal Government tries to play venture 
capitalist.
    With that, I would yield to the gentleman from Ohio, my 
good friend from Cleveland, Mr. Kucinich.
    Mr. Kucinich. Thank you very much. Good morning, Mr. 
Chairman, members of the Committee, and to our guests who are 
testifying in a moment. I am grateful for today's hearing 
because I think it will serve to dispel some misconceptions 
about the Department of Energy's Loan Guarantee Program and 
President Obama's energy agenda.
    Recognizing that energy independence is critical to 
America's future, Congress created the Loan Guarantee Program 
in 2009 to support innovative energy projects that involve more 
risk than is typical for project and corporate debt financing. 
While my friends in the Majority would have you believe that 
the well publicized bankruptcies of Beacon Power and Solyndra 
threatened to tank the Department of Energy's entire loan 
guarantee portfolio, in reality, the Department of Energy's 
1705 Loan Guarantee Portfolio Program is doing better than 
Congress expected when it established the program.
    When Congress created the 1705 Program, we appropriated 
about $2.47 billion in credit subsidy costs as an insurance 
fund to cover potential losses stemming from defaults by 
companies and projects receiving loan guarantees. That means 
that Congress prepared for losses to reach about 15 percent of 
total loan guarantees provided by the Program. In reality, 
actual losses are about 3 percent. That means that the 
Department of Energy's rigorous and thorough due diligence 
process for choosing among applicants resulted in safer choices 
than Congress had anticipated.
    My friends on the other side of the aisle have singled out 
for scrutiny Federal support for renewable energy technologies. 
I note that they have not raised questions about the last 100 
years of subsidies to promote the development of fossil fuel 
technologies, and I have not heard of any committee 
investigation into subsidies for the nuclear energy industry 
either, even though, in February 2010 a single nuclear project 
received $8.33 billion in subsidies.
    Now, investing in energy independence is critical to 
America's national security, its economic growth, and future 
job creation. If we fail to support these emerging renewable 
energy technologies, our Country will fall behind countries 
like Germany and China. If anything, we do not do enough for 
renewable energy, especially when compared to support for oil 
and gas.
    I have a chart that I would like put up, if we can do that. 
There we go.
    [Slide.]
    Mr. Kucinich. This chart attached to my statement, Mr. 
Chairman, shows how much greater is the ongoing support for the 
oil and gas industry compared with renewable energy technology.
    So what I am wondering is why my friends have devoted four 
hearings, including today's, to criticize renewable energy 
companies who have received Federal support, as Congress 
intended, in a well managed program and has returned better 
results than Congress even anticipated.
    So I think we should be helping to preserve America's 
leadership and a technology that will only become more 
important, not less, in the future. Impugning the reputation of 
these companies before the television cameras will not be 
productive.
    With that, I want to thank my friend for calling this 
hearing and I yield back the balance of my time. Thank you.
    Mr. Jordan. Anyone wish to make an opening statement on the 
Majority side?
    [No response.]
    Mr. Jordan. Our Chairman is not yet with us, so we will 
proceed. Members who may have seven days to submit opening 
statements and extraneous material for the record.
    We now want to welcome our panel of witnesses. We first 
want to introduce Mr. James Nelson, who is the President and 
CEO of Solar3D, Incorporated. We also have with us Mr. Gregory 
Kats, who is the President of Capital-E; Mr .Craig Witsoe is 
the President and CEO of Abound Solar; and Mr. Brian Fairbank 
is President and CEO of Nevada Geothermal Power; and Mr. 
Michael Ahearn is the Chairman of the Board at First Solar; 
and, finally, Mr. Woolard is the President and CEO of 
BrightSource Energy Company.
    The Committee rules require that we have witnesses sworn 
in, so if you would just stand and raise your right hands, we 
will get this done here.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth? If so, answer in the affirmative.
    [Witnesses respond in the affirmative.]
    Mr. Jordan. Let the record show that all witnesses answered 
in the affirmative.
    Again, thank you all for being here. You guys, I think, 
understand the rules. You have five minutes. We will be a 
little lenient, but as close to five as you can do it, because 
we do want to get to questions, and the goal is to try to get 
out of here by noon if we can today, because I know that I have 
something I have to be to at 12. So we are going to go right 
down the line.
    Mr. Kucinich. If you have to leave, I will----
    [Laughter.]
    Mr. Jordan. I would trust the good gentleman from Ohio, 
even though I disagreed with some of his statements in his 
opening statement.
    We are going to go right down the line. We are going to 
start with Mr. Nelson. You get your five minutes. Then we will 
just go right through and then we will get to questions. So, 
Mr. Nelson, you are recognized for your five minutes.

                    STATEMENTS OF WITNESSES

                    STATEMENT OF JIM NELSON

    Mr. Nelson. Thank you. The Government's green energy policy 
includes two parts: support for basic research with the aim of 
developing new green energy technologies, and two is making 
loan guarantees to promote the adoption of green energy 
technologies. Supporting research is an important role of 
government, but the loan guarantee program is a wasteful 
mistake because it doesn't work.
    Having spent most of my career developing strategy for 
companies large and small, I have learned one important thing, 
and that is that it is economics, not government policy, that 
drives behavior. And it is economics, not government policy, 
that will drive enthusiastic adoption of green energy.
    My company, Solar3D is a technology development company in 
Santa Barbara, California. We are developing an advanced 
technology, a new three-dimensional solar cell that will reduce 
the cost of solar energy by about 50 percent. Our objective is 
similar to that of the ill-fated Solyndra: to develop a new 
solar technology that can change the economics of the industry. 
However, our manner of execution is very different.
    We have been supported by private investment in our company 
since the establishment in August 2010. We are not dependent or 
depending on government funding. We certainly do not expect 
such support will be necessary to facilitate commercialization 
of our new technology.
    Our go-to-market strategy will be to partner with a company 
that has the know-how to manufacture products similar to ours. 
While the 3D solar cell is a unique concept, our engineering 
approach has been to design a product with existing equipment, 
methods, and facilities in mind. We lease our facilities and we 
are able to pay the University of California for the use of 
higher level clean rooms and labs for our initial work in 
designing our new technology. These measures keep our capital 
costs low. We keep our staff lean and hiring key personnel for 
full-time work and then we use consultants to keep our 
operating costs low.
    By contrast, Solyndra's unique technology attracted a $535 
million loan guarantee, but there were many problems that 
happened as a result of their execution strategy. One is that 
they had to use all new machines. A second one is that they 
built a brand new 300,000 square foot facility, complete with 
whistling robots. Three is that, even when the award was 
granted, it was clear that their operation was failing. And, 
finally, it was reported that bonuses were paid to the 
executives, despite the poor performance.
    The Department of Energy's loan guarantee to Solyndra was 
an embarrassing example of the current system. The investment 
was undoubtedly scrutinized and rejected by nearby Silicon 
Valley venture capitalists, organizations abundantly more 
qualified to identify good investments than government 
committees. There was no urgent strategic need for the U.S. to 
have Solyndra rush its product to market. The decision to fund 
Solyndra's attempt to commercialize does not stand up to 
reason.
    However, politics ultimately trumped reason. The 
bureaucrats awarding the financial aid were beholden to their 
political supervisors who had promised Americans that they were 
going to fix the U.S. economy by creating millions of green 
jobs, something that could not possibly happen in any time 
frame worthy of consideration. The price of Solyndra's failure 
was borne by the American people.
    At Solar3D's current level of development, our company has 
a much better chance than Solyndra ever did of creating a game-
changing technology. We have reached this point on the 
principles of free enterprise of risk or return, without the 
use of government aid. In the end, we will become commercial 
for less than $10 million, with the hope of creating a 
technology that will change the landscape of solar energy. It 
will be an example of the amazing American economic system at 
work.
    Government has a legitimate role in supporting basic 
research. ARPA-e, the program that awards small tranches of 
money for basic research and development in alternative energy, 
will receive $250 million in funding this year, which is only 
half of what we lost on the Solyndra project alone. This 
program can and should be expanded. Its objective is to fund 
innovative technologies that will improve the economics of 
alternative energy, which is ultimately the only path to 
widespread adoption of clean energy.
    The loan guarantee program should be retired permanently. 
The path to commercialization requires brains, discipline, and 
grit. It is rarely aided, and often impeded, by government 
involvement. Our Government should trust the free market forces 
that have made American great.
    Ultimately, our Country's investment in renewable power 
must help us become more globally competitive. Job creation and 
other ancillary goals are byproducts of renewable energy growth 
and are worthy objectives, but simply come as a result of 
successful businesses. The most important reason to invest is 
to get control of and reduce the cost of power generation in 
our Country.
    The desire for more jobs and employment is a political and 
social desire, not a business desire. A simple review of the 
DOE website reveals that about $16.6 billion has been put out 
in guarantees in the 1705 Program and has created 2400 jobs. 
That is $6.3 million per permanent job. It is not an economic 
program.
    Businesses are not made successful by more jobs. People get 
jobs by being competitive in the free enterprise system, by 
preparing themselves to be employed and to be better than the 
existing candidates. Renewable energy should be the same, by 
being great and productive in renewable energy. We need to 
produce the best products for the lowest price in the world, 
and that means that we need to get better operationally through 
the discipline and grit of the free enterprise system.
    [Prepared statement of Mr. Nelson follows:]





    Mr. Jordan. Thank you, Mr. Nelson. Appreciate that.
    Mr. Kats, you are recognized.

                     STATEMENT OF GREG KATS

    Mr. Kats. Thank you very much for the opportunity to speak 
on these important issues today. The hearing addresses several 
questions. One, is the DOE Loan Guarantee Program successful 
financially? Specifically, does the program meet or fail to 
meet its financial objectives? Two, is the DOE loan program 
successful in non-financial objectives? Specifically, does it 
meet or fail to meet additional objectives, including 
strengthening job creation, security, and competitiveness?
    The DOE loan program has three parts, two of which were 
established in the George W. Bush Administration and one of 
which was established in the Obama Administration. Section 1705 
of the DOE loan program was established through the 2009 
American Reinvestment and Recovery Act as part of a far larger 
program to accelerate U.S. investment and employment in 
response to the 2008-2009 deep economic downturn.
    Federal loan guarantees like 1705 are established to enable 
financing of projects that would otherwise probably not receive 
financial funding and, like other bank and government 
commercial lending programs, assumes a default rate as normal 
and expected. In establishing the 1705 Loan Guarantee Program, 
for example, the Office of Management and Budget predicted, and 
Congress budgeted $2.47 billion to cover expected defaults or 
partial defaults.
    Defaults in Solyndra and Beacon after some funds are 
recouped from both parties are likely to net out to about $300 
to $400 million. This is roughly 2 percent of the amount 
guaranteed. If there are no more losses, then the program would 
have to be viewed as a resounding success.
    While it is easy in hindsight to criticize the DOE loan 
program, the only fair basis for judging success or failure is 
whether the program achieved its financial objectives. Review 
of the loan portfolio outstanding suggests total defaults are 
ultimately likely to be in the range of $400 to $800 million, 
or about one-quarter of the amount projected and budgeted. 
Based on a reasonable assessment of outstanding portfolio 
financial profile and risks, the DOE loan program can therefore 
rationally only be viewed as a big success. There are other 
objectives, including security.
    The Army and Navy both have net zero programs aimed at 
reducing energy use on military bases, with the Navy targeting 
50 percent of its bases to have zero net energy consumption by 
2020 from a combination of renewable energy and energy 
efficiency. Energy is, in the words of Admiral Mullen, about 
not just defense, but security; not just survival, but 
prosperity. Our national defense infrastructure and systems 
hold the potential, in Admiral Mullen's words, to help stem the 
tide of strategic, security issues related to climate change 
while improving operational effectiveness.
    The wind and solar innovation and industries were largely 
developed here in the United States, but our major competitors, 
including China and Germany, have, through sustained Federal 
domestic subsidies and purchases, rapidly expanded the size and 
strength of their domestic wind and PV corporations. Today, of 
the top 10 global wind and PV manufacturers, only one of each 
is located in the United States. We should be deeply concerned 
about the security implications of the U.S. losing its global 
competitive leadership in these critical industries.
    Broad public support for expanded Federal investment in 
renewable energy reflects this understanding. China and Germany 
are out-investing us. Given the strategic and security 
importance of clean energy industries, weakening Federal 
support for the U.S. wind and PV and other clean industries 
undermines U.S. competitiveness and security. For security and 
financial reasons, the DOE should use the 85 percent of its 
1705 funds that are still unused and still available in the 
Treasury to fulfill its purpose of funding and supporting 
additional U.S. clean energy technologies and companies.
    Defaults in the 1705 program to date have been far below 
projected. We expect, over time, to be a total of only one-
quarter of what is budgeted. The clear financial success, the 
employment and security benefits demonstrated by this program, 
demonstrates that the DOE should ramp up its loan guarantee 
efforts and provide loan guarantee support for roughly another 
$30 to $40 billion of U.S. clean energy projects and companies. 
The DOE 1705 Loan Guarantee Program provides an important lift 
to U.S. clean energy investment growth, both strengthening job 
creation and supporting the strength of U.S. clean energy 
industries. But our main trading competitors, including China 
and Germany, are out-investing us.
    Given the strategic, security and employment importance of 
U.S. clean energy industries, weakening Federal support for the 
U.S. wind and solar industries undermines U.S. competitiveness 
and security. If the U.S. military is forced to import the 
technology it needs to achieve its mission, a shift into clean 
energy, it will weaken U.S. security.
    For financial security, employment, and competitiveness 
reasons, the DOE should use the 85 percent of its fund unused 
and still available to backstop U.S. energy companies and 
projects. And given the clear success of its loan program to 
date, based on rational measures of financial performance and 
on other measures, including security, employment, and 
competitiveness, the largest risk is that DOE slows its loan 
guarantee program.
    Failing to make substantial additional loan guarantees to 
expand U.S. strength in renewable and clean energy, strengthen 
U.S. job competitiveness, and security, would be an irrational 
and costly failure. The losers would be U.S. industry, U.S. 
military, U.S. taxpayer, and the U.S. workers. The only 
beneficiaries would be China and our other international 
competitors.
    Thank you.
    [Prepared statement of Mr. Kats follows:]





    Mr. Jordan. Thank you, Mr. Kats.
    Mr. Witsoe.

                   STATEMENT OF CRAIG WITSOE

    Mr. Witsoe. Mr. Chairman, members of the Subcommittee, my 
name is Craig Witsoe. Since November of last year I have been 
the CEO of Abound Solar, an emerging U.S. technology company 
that manufactures solar panels in Colorado. We have an R&D 
facility in Colorado, as well as a factory, and we also have a 
planned site in Indiana that would be our second U.S. factory.
    Abound is very much an American story. Our company stemmed 
from advanced photovoltaic research started in the late 1980s 
at Colorado State University. Early funding came from the 
National Science Foundation, as well as the National Renewable 
Energy Lab.
    In 2007, Abound was formed as a startup company to 
commercialize this very innovative research. Abound produces a 
thin-film Cadmium Telluride, or CadTel, solar panel, using 
proprietary advanced manufacturing processes known as closed 
space sublimation. This technology, invented by Abound, allows 
fabrication of all critical photovoltaic semiconductor layers 
into one continuous piece of equipment.
    At scale, CadTel can be produced at lower cost per watt 
than the crystalline-silicon modules produced by many Chinese 
companies today. Abound is one of only three companies in the 
world to have significant CadTel experience. First Solar also 
uses CadTel and, actually, seven months ago General Electric 
announced that it would also use CadTel as its technology of 
choice for a new solar module factory in Colorado. And, of 
course, all three of these companies are American firms.
    Crystalline-silicon are much older technology used by 
Chinese companies is what they are using to dominate our 
markets. Actually, crystalline-silicon was invented in America 
by Bell Labs in 1954. Now, fortunately, many believe that 
America can still win in the long run with new technologies 
like CadTel. In fact, within recent weeks, Abound, along with 
First Solar and GE, has been solicited to collaborate with the 
U.S. PV manufacturing consortium, SEMATECH and NREL, to help 
accelerate U.S. advancement of this critical technology for the 
future. This is not unlike SEMATECH's initiative started in 
1987, which helped recapture the U.S. lead in semiconductor 
manufacturing.
    Abound has attracted more than $300 million in private 
investment. In 2009, Abound also applied for additional funding 
to expand and upgrade our capacity through the 1705 DOE loan 
program. The DOE review lasted nearly two years, involved 
several technical and financial third-party consultants, and 
the loan was finalized in December 2010.
    To date, Abound has drawn down about $70 million out of the 
potential $400 million loan. Funds were used to complete and 
start up two production lines in Colorado. With these funds, 
our company made significant progress, nearly doubling the 
efficiency of our panels from 45 watts per panel up to now 85 
watts per panel today. Abound has not drawn down any additional 
funds under the program since August of 2011 and does not plan 
to draw down any more funds.
    Abound's technology and business made very solid progress 
until about the second half of last year, when module prices 
fell 50 percent as a result of unprecedented discounting by 
Chinese solar panel companies. Abound believes that, at scale, 
our CadTel modules can compete with any other global company. 
But with a reported $34 billion in subsidies behind Chinese 
module makers, it is very hard when the competition is a 
country and not just a company.
    Extreme price actions by Chinese companies believed to be 
selling these solar panels below their cost has hurt many 
American solar manufacturing companies, including Abound. 
Instead of matching Chinese price levels, which would have 
caused us to sell our panels at a loss, Abound, in February of 
this year, made a very difficult decision, and that was to shut 
down our current generation module production in order to 
accelerate development of a next gen 85 watt module.
    Now, while this very difficult action resulted in the 
temporary elimination of 180 full-time and 100 temporary jobs, 
we do believe that this very competitive next generation module 
can create even more jobs for America in the future.
    Abound's technology progress has been made possible by $300 
million of private investment and $70 million drawn down from 
the DOE loan. Today China dominates the global solar module 
market using low-cost labor, enormous government backing, and 
U.S.-invented crystalline-silicon technology. But while this 
American invention has turned into Chinese industry, we believe 
that the U.S. can still win in the future by developing and 
scaling newer technologies like CadTel. At scale, our solar 
panels can be built by American workers with good paying jobs, 
at lower cost per watt than competing crystalline Chinese 
panels made with low-cost labor in China.
    Today technology startup companies come with significant 
risks. We know that. The recent aggressive price actions from 
Chinese companies do threaten to prevent innovative companies 
like Abound from achieving needed scale to win. Even with long-
term superior technology, this dynamic has made the solar 
market very difficult for Abound and other module suppliers.
    The technology advances we have made can be critical 
elements to the U.S. regaining a competitive position in the 
global market. As we work to launch our next generation of 
solar module with the use of private financing, we are 
determined to continue to advance this U.S. technology to help 
turn American inventions into American industry.
    Thank you.
    [Prepared statement of Mr. Witsoe follows:]





    Mr. Jordan. Thank you, Mr. Witsoe.
    Mr. Fairbank.

                 STATEMENT OF BRIAN D FAIRBANK

    Mr. Fairbank. Good morning, Mr. Chairman and members of the 
Subcommittee. It is my pleasure to appear today as a 
representative of Nevada Geothermal Power and the Blue Mountain 
Facility, and to speak with you about the many good things 
occurring at Blue Mountain both in terms of what is occurring 
at the power plant and also in the Winnemucca, Nevada region 
and beyond. These positive things are a result of the hard work 
of Nevada Geothermal Power and the Blue Mountain employees, the 
support of civic leaders and ordinary Nevadans, the dedication 
of trusted lenders, and, of course, the assistance of the 
Department of Energy Section 1705 Loan Guarantee Program.
    By way of introduction, I am the President and CEO of 
Nevada Geothermal Power, Inc., which is the ultimate corporate 
owner of the Blue Mountain Faulkner 1 geothermal power 
facility. I am a geological engineer by training, with over 30 
years of geothermal engineering exploration and assessment 
experience. I am the past President of the Canadian Geothermal 
Energy Association and currently serve on the board of the 
Geothermal Resources Council based in California.
    My geothermal experience has taken me around the world and 
has included, by way of example, participation in the discovery 
of Canada's Meager Creek geothermal area in the late 1970s; 
geothermal resource exploration and evaluations throughout 
North America and Central and South America; participation in 
the development of a national power plan for Kenya and 
consultation on their geothermal plants; and extensive 
geothermal experience throughout the Basin and Range geologic 
province of Nevada.
    Before delving into the specifics of the Blue Mountain 
facility, I think it worthwhile to briefly describe the nature 
of geothermal power and why we are so optimistic about its 
future as a clean, reliable source of energy in the United 
States.
    Geothermal power is a unique source of renewable natural 
energy that is a product of heat generated by and stored in the 
earth. The earth's core is continually producing enormous 
amounts of heat, primarily by means of decay of radioactive 
materials, and secondarily by energy left over from the earth's 
formation.
    Heat generated in the earth's core is conducted upward in 
the crust. Under certain geological conditions, such as the 
emplacement of shallow magma chambers around young volcanoes or 
thinning of the crust in rift belts, such as occurs in Nevada, 
rock and water and the earth's shallow crust is sometimes 
heated to a very high temperature. Surface manifestations of 
the underlying geothermal energy range from shallow hot 
groundwater, hot springs, or fumaroles.
    We are all familiar with some of the famous examples of 
geothermal energy in action, such as volcanoes, Mount St. 
Helens comes to mind; the Old Faithful geyser in Yellowstone 
National Park; and other hot springs areas.
    Advances in technology now allow us to harness the heat 
stored in the rock and water, and convert it to electrical 
power that can be used to power our cities and industries 
without any of the pollution or negative side effects caused by 
other sources of energy. This is not a simple task, but one 
that we are committed to.
    Geothermal power plants are base load, operating nonstop 
365 days a year at around 95 percent availability. Other 
sources of natural energy, such as wind power, solar power, and 
hydroelectric power, all operate at lower capacities. And 
because geothermal plants require no fuel to operate, they are 
unaffected by fluctuations in prices, produce minimal harmful 
emissions, and have a very small surface footprint. Geothermal 
energy is, thus, a natural, clean, renewable, and efficient 
source of power, the potential of which we have only just begun 
to tap.
    NGP's team consists of outstanding dedicated individuals 
who are true experts in their respective fields. Our technical 
leaders have over a century of combined experience in energy 
and in the geothermal energy communities, and are universally 
respected for their expertise and commitment.
    Relating to this morning's project focus and the DOE loan 
guarantee, NGP Blue Mountain ILLC is the registered owner of 
four Federal geothermal leases covering eight sections of land 
and additional private geothermal leases covering nine sections 
of land, for a total of 17 square miles. Our leases include 
both the geothermal production rights and surface rights 
necessary for the power plant and well field activities. The 
leases are situated with no competing geothermal leases in the 
area and no known environmental or other impediments to current 
or future drilling and plant operations.
    The Blue Mountain geothermal resource represents the first 
new discovery of a geothermal site in the Western United States 
in 20 years. Today Blue Mountain is one of the largest binary 
cycle geothermal plants in Nevada. The Blue Mountain project 
was helped by the DOE Loan Guarantee Program, which backs a 
loan by John Hancock. The facility's operating capacity is 
sufficient to service the Hancock loan through its remaining 
term. No taxpayer dollars have gone toward servicing the 
Hancock loan.
    But our strategic plans for Blue Mountain are more 
ambitious than merely producing power to meet our loan 
commitments. We continue to work actively with independent 
engineers to understand and utilize the geothermal resource at 
Blue Mountain. We remain bullish on the future geothermal 
resource potential and are working on a plan to construct new 
northern injection wells and one new production well to achieve 
a targeted 52 megawatts on a gross basis, or 41 megawatts net 
to the grid.
    These growth plans are possible only because of the solid 
foundation that has been put in place by the hard work of 
Nevada Geothermal Power employees and the financial support of 
our lenders and, of course, the loan guarantee put in place by 
DOE.
    Thank you for the opportunity to speak with you today about 
NGP's Blue Mountain prospect. I am enormously proud of our 
accomplishments at the Blue Mountain geothermal site and look 
forward to many years of clean energy production at this 
facility.
    I would be happy to answer any questions the members of the 
Subcommittee might have.
    [Prepared statement of Mr. Fairbank follows:]





    Mr. Jordan. Great. Thank you, Mr. Fairbank.
    Mr. Ahearn.

                 STATEMENT OF MICHAEL J. AHEARN

    Mr. Ahearn. Chairman Jordan and members of the Committee, 
my name is Mike Ahearn. I am the Chairman of the Board of First 
Solar. Thank you for the opportunity to appear before the 
Committee today to offer my perspective on the Department of 
Energy's Loan Guarantee Program.
    First Solar is the lowest cost solar module manufacturer in 
the industry, one of the largest solar module manufacturers in 
the world, and the global leader in developing and constructing 
utility-scale photovoltaic power plants. We have produced 6 
gigawatts of solar modules, representing an estimated $15 
billion or more solar power installations. We are headquartered 
in Tempe, Arizona, and our global R&D and U.S. manufacturing 
centers are located in Perrysburg, Ohio.
    In addition to our 1,800 associates in the U.S., our 
manufacturing and project development activities support more 
than 7,000 additional U.S. supply chain and construction jobs. 
Last year alone we spent more than $1 billion with U.S. 
suppliers in 35 States for everything from glass to steel 
components. We trade on the NASDAQ and we are currently the 
only renewable energy company listed in the S&P 500.
    First Solar's success reflects over two decades of 
entrepreneurial struggle, innovation, and effective public-
private partnership. Our core thin-film semiconductor process 
technology was developed in the early 1990s in partnership with 
the National Renewable Energy Laboratory. In 1999 we formed 
First Solar and committed venture capital funding to 
commercialize the technology. A project we thought would 
require two years and $40 million ended up requiring six years 
and over $100 million of venture capital, as we encountered and 
eventually solved a number of problems typical of startup 
technology companies.
    After solving the core commercial problems, we grew 
exponentially. Between 2005 and 2009, aided by generous market 
subsidies in Europe and technical assistance from NREL, Sandia 
National Laboratory, and Brookhaven National Laboratory, we 
scaled our annual production volume fiftyfold, from 20 to over 
1100 megawatts; expanded our workforce tenfold, from 200 to 
over 2,000 associates; reduced our manufacturing costs by 
nearly 70 percent; and established ourselves as the global 
industry leader.
    In 2008 we decided to expand beyond manufacturing and 
selling solar modules to become the first company to engineer 
and construct large PV power plants for the utility market. 
Photovoltaics to that point had been largely relegated to 
smaller distributed generation systems and were generally 
considered too costly to compete with wind and geothermal 
power. To meet the cost and performance requirements of 
utilities, we vertically integrated our business into the 
design, engineering, and construction of solar power plants, 
and, in parallel, we implemented a number of R&D programs and 
initiatives to reduce costs, improve plant reliability, and 
effectively integrate large solar plants onto the grid.
    With now over 2 gigawatts of power plants completed or 
under construction, we have demonstrated our ability to meet 
the exacting standards of the utility industry. Our advanced 
technology, innovative system designs, and economies of scale 
have enabled steep cost reductions and accelerated construction 
cycles. Our plant monitoring and control capabilities have 
validated the reliability and grid compatibility of our power 
plants.
    By consistently delivering on our promises, we have earned 
the business of some of the most respected companies in the 
electric utility industry, including APS, Exelon, GE, NextEra, 
NRG, PG&E, Sempra, Southern California Edison, Southern 
Company, and Mid-American. These accomplishments have enabled 
us to launch a major initiative to expand to new markets across 
the globe without the need for expensive solar subsidies.
    Our success story came close to ending in early failure. 
The financial sector meltdown and economic downturn in 2009 
jeopardized the entire market for renewable energy, including 
First Solar's efforts to enter the utility market. The timely 
and effective intervention by Congress through the American 
Recovery and Reinvestment Act, by the Treasury Department 
through the Section 1603 Program, and by the DOE through the 
Loan Guarantee Program helped to ensure near term liquidity in 
the project finance market and fostered the develop of more 
robust private project finance markets. These initiatives acted 
as both an interim lifeline and a bridge to the future, and for 
that we are sincerely grateful.
    In recent months, the European solar subsidies that 
historically supported the industry have declined sharply, 
impacting First Solar and the rest of the industry. However, 
largely because of our successful expansion into the utility 
market, we remain financially strong and well positioned to 
execute through the current market environment.
    I am aware that questions have arisen regarding the DOE's 
Loan Guarantee Program, including questions about First Solar's 
applications. First Solar worked diligently and transparently 
with the DOE to ensure that sound results were achieved for 
each of these projects.
    I would like to thank the Committee again for the 
opportunity today, and I welcome the chance to answer your 
questions.
    [Prepared statement of Mr. Ahearn follows:]





    
    Mr. Jordan. Thank you, Mr. Ahearn.
    Mr. Woolard. Last one. Go right ahead.

                  STATEMENT OF JOHN M. WOOLARD

    Mr. Woolard. Good morning, Mr. Chairman, Mr. Ranking 
Member, and members of the Subcommittee. My name is John 
Woolard. I am President and CEO of BrightSource Energy. I have 
two decades of experience in the energy and environmental 
sectors as an executive, an entrepreneur, and an investor.
    BrightSource designs, develops, and deploys large-scale 
concentrating solar thermal technology to produce high-value 
steam for electric power, petroleum, and industrial-process 
markets worldwide.
    Our technology is very different from solar photovoltaic, 
or PV energy, the kind you typically find on rooftops. Our 
projects, thousands of mirrors, called heliostats, continuously 
track the sun through the day and we focus light onto a solar 
receiver which sits on top of a tower. We generate power 
similar to traditional power plants like coal or natural gas by 
creating high temperature steam to turn a turbine to generate 
electricity. Our technology has been tested and proven in the 
field to the satisfaction of several independent engineering 
firms at two smaller scaled facilities.
    Our partners and investors include some of the world's best 
known companies. Our investors include private equity firms, 
strategic investors such as Chevron, BP, Alstom, and Google and 
NRG as project investors. We now employ more than 400 people in 
our Oakland and worldwide offices, and we have one of the 
largest portfolios in the United States of signed utility-scale 
power purchase agreements.
    First, I am pleased to report on the Ivanpah project, with 
construction management by Bechtel, that is on schedule and 
within budget, and we expect to deliver power to the grid by 
early next year. Ivanpah will generate and sell power to 
Pacific Gas & Electric and Southern California Edison under 3 
of 13 power purchase agreements that we have signed with those 
two large utilities. In total, the Ivanpah project will cost 
about $2.2 billion to build, and at 392 megawatts will produce 
enough power for 140,000 homes each year.
    We procure from a supply chain that stretches across 17 
States. The majority of the materials used to build the project 
are procured domestically and we estimate that approximately 70 
percent of the project's value will be captured in the United 
States.
    The project is creating 1400 construction jobs at peak. The 
project will generate $250 million in earnings for these 
construction workers and, over its 30 year life, will produce 
$650 million in earnings for workers on the site, including the 
90 permanent jobs required to operate the plant.
    In addition to the supply chain, investment, and labor 
wages created, the project will also generate $350 million in 
State and local tax revenues over its lifetime.
    Large energy infrastructure projects typically use project 
finance to provide the funds that they need for construction. 
Consistent with this model, the Ivanpah project company is 
jointly owned by NRG, Google, and BrightSource. These equity 
investors have collectively committed $598 million to the 
project company. Under the DOE guaranteed loan, the project 
company is the borrower and has contracts with the two largest 
investor and utilities in California to sell all of the 
project's power at a fixed price for 20 or 25 years. These 
future cash payments back the loan repayment.
    BrightSource first applied to pre-qualify for a DOE loan 
guarantee in December of 2006, proposing to use a project 
finance structure. In April 2011, four and a half years after 
we first applied, our loan guarantee transaction closed. During 
that period, BrightSource funded well over $2 million of 
independent review by world-class engineering, finance, and 
legal firms selected by and operating on behalf of the DOE.
    The loan guarantee program served an important role in the 
market, allowing our technology and project to achieve 
meaningful scale, to drive down cost, validate our technology, 
and enable a new industry to succeed, in short, creating the 
necessary conditions to allow commercial financing. Going 
forward, we expect to finance all of our future projects 
commercially.
    At BrightSource, we are proud of our company and we are 
proud of the Ivanpah project. I appreciate the opportunity to 
address the Subcommittee and welcome any questions you may 
have. Thank you.
    [Prepared statement of Mr. Woolard follows:]





    Mr. Jordan. I thank the gentleman.
    I thank all of you for your testimony today.
    Mr. Woolard, do you agree with Mr. Kats and Mr. Kucinich 
that the 1705 program is working had has worked well? Yes or 
no?
    Mr. Woolard. I believe that the project works very well for 
project financings where you have a large utility----
    Mr. Jordan. And do you think it worked well in your 
particular case? I think on page 5 of your testimony, ``the 
DOE's review process was extremely thorough and marked by 
thoughtful analysis.'' So you thought it worked well in your 
situation, their agreement to give you, how much money did you 
get, by the way, from the Department of Energy in the loan 
guarantee?
    Mr. Woolard. I fully agree with that statement. We got $1.6 
billion, and it was a very thorough analysis.
    Mr. Jordan. Thorough and thoughtful analysis is your 
statement here. And do you believe you received the loan 
guarantee, there was any political influence at all involved in 
that decision, or was it based completely on the merits of the 
project, the Ivanpah project, and your particular company, 
BrightSource?
    Mr. Woolard. I believe it was completely on the merits of 
the project. We started the application in 2006 and went 
through a four-year cycle.
    Mr. Jordan. Okay, okay. Well, this is where I am confused, 
because you guys gave us 30,000 documents on Friday and 
contained in those documents, I am going to put the first email 
up, if I could, was an email. Because today you are telling us 
it was thorough and thoughtful analysis and there was no 
political influence, and yet we have this email correspondence 
between you and Matt Rogers. Matt Rogers, Senior Advisor to the 
Secretary of Energy for the Recovery Act, so this is the guy 
who decides things.
    You say in this email, I think it is interesting the very 
first thing you say is please don't distribute this, we 
wouldn't want the taxpayers to know what is going on with our 
money. But down in this email, the last sentence you say 
Department of Energy's credibility is thin and I am currently 
trying to put off communications with people on the Hill.
    So which is it? Today you say they are thorough and 
thoughtful and it is a good program and great analysis, but in 
this email, when you are trying to get the money, you say their 
credibility is thin. Which is it?
    Mr. Woolard. I never said they were fast. So as we went 
on----
    Mr. Jordan. No, no, no, this is not about timing, this is 
about credibility. You used the word credibility in this email.
    Mr. Woolard. No, it is very much about timing, if you allow 
me to explain. We had actually invested quite a bit of money at 
BrightSource in moving the project forward, and we had a 
conditional commitment and the transaction had been 
contemplated to close in September of 2010----
    Mr. Jordan. January 4th, 2010.
    Mr. Woolard. Yes, September 2009.
    Mr. Jordan. Well, let's move to the second thing, because 
you just said it was completely based on the merits of the 
project. Can you see the big print up there where it says also, 
that last paragraph, next to last paragraph that starts with 
also? Can you read that first sentence for me?
    Mr. Woolard. Also, Darby at PG&E, that sentence?
    Mr. Jordan. Yes.
    Mr. Woolard. Also, Darby at PG&E talked directly to Obama 
about the program's challenges and the bad situation it puts 
him in.
    Mr. Jordan. Now, who is the Darby in that, is that the head 
of Pacific Gas & Electric?
    Mr. Woolard. Yes. Peter Darby was the CEO of PG&E----
    Mr. Jordan. And they had a vested interest in getting this 
thing approved because you were providing them with the 
required commitment for green power, right?
    Mr. Woolard. Yes. PG&E was very dependent on----
    Mr. Jordan. And is the Obama in this sentence, in your 
email sent to the guy who is making the decision, is the Obama 
the Obama I think it is, the President of the United States?
    Mr. Woolard. Yes. I had been told----
    Mr. Jordan. So wait a minute, now. So just a minute ago you 
told me there was no political influence in deciding this, and 
yet in an email you sent to the guy who is making the decision, 
you reference the President of the United States, who just had, 
according to this email, had a direct conversation with the guy 
who cares pretty deeply about this thing getting approved. So, 
again, which is it?
    Mr. Woolard. For our project----
    Mr. Jordan. Was it based on the merit and were they 
thorough and thoughtful, or were they no credibility and based 
on politics?
    Mr. Woolard. Our project, I can assure you, was based on 
the merits as I went through the process.
    Mr. Jordan. So then why did you think it was necessary to 
tell the guy who makes the decision that a guy who you know 
pretty well, who must have communicated to you directly, talked 
directly with the President of the United States?
    Mr. Woolard. Mr. Chairman, with all due respect, what I 
believe----
    Mr. Jordan. I am just trying to clear up the confusion.
    Mr. Woolard. I would like to help. What I believe that 
Peter Darby was saying, I don't know, was that he had many 
projects under this loan guarantee program, I believe a 
significant portion of many of his projects was dependent on 
this, and it had----
    Mr. Jordan. But the key is you thought it was important 
enough to cite in an email to the guy who is in charge of 
making the decision, and one month after this email you got the 
conditional approval.
    Let me go to the next email, if I could. This was amazing 
to me. I mean, this is just amazing. This is another email from 
you to Jonathan Silver, Executive Director of the Loan 
Guarantee Program, and the email you start off please see below 
a draft of the email our chairman, John Bryson, who is now the 
Commerce Secretary, chairman of your board, is preparing to 
send to the White House Chief of Staff Bill Daley.
    So you are asking the guy who is in charge of making the 
decision, now you are past the conditional, this is the final 
guarantee. You are asking the guy to proofread an email that 
your chairman is going to send to the White House chief of 
staff. And you say there was no political involvement? I mean, 
this is amazing.
    The person who makes the decisions, this is not some kid 
asking their mom to proofread their homework; this is the 
taxpayer dollars by the guy who is going to decide and you are 
saying, hey, can you proofread this, even though you are going 
to make the decision, because we want our chairman, who is 
going to be the next Commerce Secretary, we want him to send a 
letter to the White House chief of staff? And then you just 
said two minutes ago that there was no political involvement in 
the decision to give your company $1.6 billion of taxpayer 
money.
    Mr. Woolard. I believe that everything we did in our 
project was fully on its merits. It is a very solid project.
    Mr. Jordan. I think it would be interesting to see what Mr. 
Nelson thinks. Do you think it is customary for a company to be 
able to say to someone who is going to decide whether they get 
a loan guarantee or not, hey, proofread this letter that our 
chairman is going to send to the White House Chief of Staff, 
that we are going to send to Bill Daley? That is unbelievable.
    Mr. Woolard. I believe that the letter that was 
contemplated to be sent was all around the program itself and 
making sure that the program----
    Mr. Jordan. Well, you read this letter; we need guidance 
and support from the White House. You know, that is amazing. 
Dear Bill, we need a commitment from the White House to 
quarterback the loan closure between OMB and DOE by March 18th. 
Mr. White House Chief of Staff, can you approve this by a 
certain date, we need this? Unbelievable.
    Let me just put up one last thing, because I know I am out 
of time and I want to get to the Ranking Member.
    Let me put up, because we have the Chairman of the full 
Committee here. I want to put up what the Secretary said to us 
just two months ago in questions that I asked him. Mr. 
Secretary, how about John Bryson, former chairman of the board 
at BrightSource, now the Secretary of Commerce, did that in any 
way influence your decision to give a loan guarantee to 
BrightSource? The Secretary said no. Did the White House ever 
talk to you about any of these respective companies involving 
these individuals? Did someone from the White House, chief of 
staff, someone from the White House call you? And the Secretary 
said no.
    Mr. Chairman, I think we have to have the Secretary back in 
here because certainly his response to those direct questions 
certainly doesn't square with emails we got in a batch of 
30,000 documents on Friday from BrightSource, and I think it is 
important----
    Mr. Issa. Would the gentleman yield?
    Mr. Jordan. I would be happy to yield to the full Committee 
Chairman.
    Mr. Issa. I will commit to you today that we will invite 
the Secretary back to clarify the record, along with letters to 
the Administration asking to waive the normal presidential 
exclusion of conversations, since it is clear that there was 
direct conversation leading to a form of favoritism for 
BrightSource. We will ask the President to give us the records 
of those conversations with PG&E and others.
    Mr. Jordan. I thank the Chairman.
    Mr. Chairman, I would just ask this, too. To my knowledge, 
this is the first time we have had any direct link to the White 
House in the 1705 program, is that correct?
    Mr. Issa. To my knowledge, this discovery is the first.
    Mr. Jordan. I have gone over time and I will be generous 
with the time to the Ranking Member, the gentleman from Ohio--
--
    Mr. Issa. Mr. Chairman, if I could ask unanimous consent 
just to place my opening statement in the record and to include 
clarification as to the Ranking Member's slide he used in his 
opening statement. I would like to, if you will, the gentleman 
from Ohio is my long-time friend, but I think we can shed light 
on the fact that those ratios, if stated effectively, including 
the fact that the oil industry only receives a 6 percent credit 
under 199, where any other manufacturer, such as those in your 
district, Mr. Kucinich, receives a 9 percent. If you discount 
where they get 3 percent less, rather than the same amount as 
every other manufacturer in America, I believe we can provide 
additional charts that will fairly reflect other views.
    Mr. Kucinich. Reserving the right to object, I would be 
happy to have you submit that and we will then, of course, 
engage in a colloquy through the record where we will respond 
to what you are submitting. Withdraw any objections and just be 
delighted to----
    Mr. Issa. I look forward to it. Thank you.
    Mr. Kucinich. Okay.
    Mr. Jordan. If I could just have one last question for Mr. 
Woolard before yielding to the gentleman.
    So, Mr. Woolard, I just want to be clear for the record. 
You stick by the statement you said just a few minutes ago, 
that there was no political influence exercised in the decision 
by the Department of Energy to grant you $1.6 billion in a loan 
guarantee?
    Mr. Woolard. Yes, sir. To the best of my knowledge, this 
project was judged on its merits through its process.
    Mr. Jordan. Okay, great.
    Yield now to the gentleman from Ohio.
    Mr. Kucinich. I don't often share the concerns and 
objections of my colleagues on these kinds of matters. Matter 
of fact, my opening statement made it very clear I have a 
different point of view. But I have to say this issue of 
potential political influence on these loans ought to be looked 
at. That is why I am going to submit to the record a letter to 
Secretary Chu from Governor Arnold Schwarzenegger that supports 
BrightSource Energy's project application.
    Mr. Issa. If the gentleman would yield.
    Mr. Kucinich. I----
    Mr. Issa. I would join with you in encouraging that. As you 
know, my former governor was the author of those mandates that 
created the very opportunity for these businesses to have a 20-
year guarantee with coerced forcing of public utilities, 
whether it penciled out or not, to have renewables.
    Mr. Kucinich. Well, reclaiming my time. I just want to say 
that, let me ask the Chair----
    Mr. Jordan. Without objection.
    Mr. Kucinich. Would the Chair then invite our friend, 
Governor Schwarzenegger to this Committee to explain why he 
supported the same BrightSource Energy project that the Obama 
Administration supported? So we either have here a case of 
bipartisan influence or bipartisan agreement, and the result 
could be good. We may actually have here one of those 
extraordinary moments where we have leaders on both sides of 
the aisle that agree and support a project that should have 
been supported.
    Mr. Issa. If the gentleman would yield. I will personally 
call my dear friend, Governor Schwarzenegger, former governor, 
and invite him. I suspect that if he can get away from his busy 
schedule of new movies, that he will honor us with his 
presence. But I will personally call him.
    Mr. Kucinich. That would be great. Thanks, Mr. Chairman.
    I would like to now go to my questions. And I think that, 
based on the clock, I probably have five minutes here.
    Mr. Issa. I would ask unanimous consent the clock be reset 
to at least six minutes.
    Mr. Kucinich. Thank you very much, Mr. Chairman. See how 
Democrats and Republicans get along, not only on this panel, 
but also with our energy policy.
    [Laughter.]
    Mr. Kucinich. Now, the Majority published a report in which 
they concluded ``The Committee identified many cases where the 
DOE disregarded their own taxpayer protections, ignored lending 
standards and eligibility requirements, and, as a result, 
amassed an excessively risky loan portfolio.''
    Bloomberg Government came to a different conclusion. 
Bloomberg recently studied DOE's 1705 Loan Guarantee Program. 
The title of that report is Beyond Solyndra: An Analysis of 
DOE's Loan Guarantee Program. I ask unanimous consent that it 
be placed in the record.
    Mr. Jordan. Without objection.
    [The information follows:][This report can be found on-line 
at: http://about.bgov.com/2011/12/01/bgov-study-solyndra-
failure-obscures-low-risk-energy-guarntees/]
    Mr. Kucinich. Bloomberg concluded that the 1705 DOE loan 
portfolio is ``composed of predominantly lower risk projects.''
    Question to Mr. Kats. Is the Majority's report correct or 
is Bloomberg Government? And did DOE amass an excessively risky 
portfolio or is the portfolio composed of predominantly low 
risk projects?
    By the way, I want to ask that the slide showing the 
distribution of projects within the entire portfolio, could we 
put it up on the monitors?
    Finally, Mr. Kats, I need brief answers. I have a whole 
bunch of questions I have to go through in the next five 
minutes. So could you give me an answer?
    Mr. Kats. I think Bloomberg is pretty clearly right. The 
default rate, by the time you assume all defaults come in at 
one-quarter of what is budgeted. That is the bottom line.
    Mr. Kucinich. Okay, the slide shows the vast majority of 
projects funded through 1705 were power generation projects. 
What is the difference between the risks associated with power 
generation projects, as compared to manufacturing projects, Mr. 
Kats?
    Mr. Kats. Power generation projects are typically based on 
long-term contracts with a utility or some other entity; 
whereas, a manufacturer, it is higher risk because it goes into 
the company. In some cases the companies have long-term 
contracts; sometimes they don't. So, again, the power 
generation contracts are very low risk because you have long-
term agreements to buy the power generated from the funded 
assets.
    Mr. Kucinich. So as I understand it, one reason why the 
portfolio can be considered low risk is because most of the 
projects that receive 1705 loan guarantees are for power 
generation, and DOE required these companies to have long-term 
agreements in place with nearby utilities to purchase the power 
once built. This means the projects have a guaranteed income 
stream, which greatly limits any risk of default, is that true?
    Mr. Kats. Exactly.
    Mr. Kucinich. Okay.
    Now, Mr. Woolard, do you already have agreements in place 
to sell power to major utilities once the projects are 
completed? Brief answer.
    Mr. Woolard. Yes, sir. All power is sold for 20 years.
    Mr. Kucinich. And you did that because DOE required that 
you have those agreements before you received any Federal loan 
guarantee, is that correct?
    Mr. Woolard. I believe that the loan guarantee depended on 
those long-term power purchases.
    Mr. Kucinich. Some may ask why the Federal Government 
should do anything that could cause loss of taxpayer dollars, 
as any loan guarantee program can.
    Now, Mr. Kats, why did Congress design the 1705 Loan 
Guarantee Program to choose projects that would have some 
degree of risk associated with them?
    Mr. Kats. Because these are projects that are probably 
otherwise unable to get funding.
    Mr. Kucinich. Would it have been possible for DOE to 
accomplish the goal of the law, to spur technological advances 
to renewable energy technology, without incurring any risk of 
losses?
    Mr. Kats. No, because if it had gone for risk-free 
projects, those would have been projects that would have gotten 
private sector funding.
    Mr. Kucinich. Okay, so you have Congress appropriating 
$2.47 billion as a kind of insurance fund to cover project 
losses. That is about 15 percent of the total amount of loan 
guarantees. Now, detractors of this program like to point to 
the bankruptcy of Solyndra to discredit the entire program, but 
the actual amount of losses is much lower.
    I am going to ask staff to put up the slide showing 
projected losses compared to much smaller actual losses.
    [Slide.]
    Mr. Kucinich. Now, Mr. Kats, if Congress set aside money to 
cover project losses, and then one or several companies ended 
up causing losses, would you say the entire program is a 
failure or that it is working as designed?
    Mr. Kats. No. As a venture capitalist and as a PE investor, 
it is very clear that when you make a portfolio of investments, 
you hope that many will succeed; you expect a few to fail. What 
is impressive about this DOE loan program is how few have 
failed. The actual defaults are about 2 percent; that is, by 
the time you anticipate all of the defaults coming through, 
only one-quarter of the defaults that were budgeted and 
projected will occur. So by any reasonable measure this has 
been a very successful program that should be extended and 
expanded.
    Mr. Kucinich. So do you expect a default rate of the 1705 
loan guarantee portfolio to exceed the 15 percent threshold 
that Congress itself anticipated?
    Mr. Kats. No, it will be much less than that, perhaps one-
quarter.
    Mr. Kucinich. So you expect it to be about a quarter?
    Mr. Kats. Correct.
    Mr. Kucinich. Okay. And a quarter of?
    Mr. Kats. A quarter of the 15 percent. In other words----
    Mr. Kucinich. Okay, so the program, as I said in my 
testimony, you said in yours, the program is performing better 
than expected in financial terms. But how is the program 
performing in terms of policy? Are the 1705 program financings 
spurting technological advances or not?
    Mr. Kats. Absolutely. These are breakthrough technologies. 
We have heard from the CEOs here. For the U.S. military, this 
is one of their most important strategic objectives.
    Mr. Kucinich. Mr. Ahearn, what do you say?
    Mr. Ahearn. The projects that we are building currently 
would not have been financed and would not be under 
construction if it were not for the loan guarantee----
    Mr. Kucinich. Is the program performing in terms of policy, 
yes or no?
    Mr. Ahearn. As relates to the types of projects that Mr. 
Woolard and I and Mr. Fairbank are discussing, yes, it is 
performing.
    Mr. Kucinich. Well, the whole point of this hearing it 
seems to me is that my colleagues, my friends on the other side 
of the aisle seem to believe the Federal Government should not 
invest in green energy technologies. One expects my friends to 
be pro-business, but on this Committee we seem to have some 
confusion about that.
    Mr. Kats, Ahearn, Willard, in the one second that remains, 
what is the risk of doing nothing? What would it mean for your 
industry and the economy in the long run if my colleagues got 
their wish and there was never a 1705 loan guarantee?
    Mr. Ahearn. Make the Chinese very happy and the U.S. 
military very unhappy.
    Mr. Kucinich. Mr. Ahearn?
    Mr. Ahearn. Well, maybe I differ slightly on some of these 
points----
    Mr. Kucinich. I am out of time.
    Mr. Ahearn.--the bridge has allowed us to advance the 
private markets.
    Mr. Kucinich. Mr. Woolard?
    Mr. Woolard. I believe that we would lose U.S. 
competitiveness worldwide because building things up in our 
backyard is important.
    Mr. Kucinich. Okay, thank you.
    Mr. Chairman, thank you. Appreciate it.
    Mr. Jordan. I thank the gentleman.
    I am confused again. Now, which is it? Is this loan 
guarantee program so great and these companies are so wonderful 
this is apple pie, and yet Mr. Kats says they couldn't get 
funding in the private sector? It can't be like this is so 
wonderful, but we need the taxpayers and we need political 
influence to make sure the taxpayer money gets put at risk. Mr. 
Nelson didn't have any of that and he was able to--again, I am 
confused. It is so wonderful. And is the standard only a couple 
of companies, only 2 percent, 4, whatever the number is, are 
going to fail? Is that really the standard we want?
    Mr. Kucinich. Would the gentleman yield?
    Mr. Jordan. I would be happy to yield.
    Mr. Kucinich. I think that you have a witness who has 
presented he didn't need help, and we have other witnesses who 
say that without this we wouldn't be able to be competitive. So 
maybe both things are true.
    Mr. Jordan. Yield now to the gentleman from Tennessee, Mr. 
DesJarlais.
    Mr. DesJarlais. Thank you, Mr. Chairman. And thank the 
witnesses today.
    I think maybe only in Congress can we come out and testify 
that the results are better than we thought they would be or, 
in other words, we are not failing as bad as we expected. We 
look at this questioning today and I look at it from the 
standpoint of the taxpayers, as we all should.
    Mr. Ahearn, when you started your testimony, it sounds like 
First Solar is a pretty good solid company?
    Mr. Ahearn. Yes, sir, it is.
    Mr. DesJarlais. It is doing well?
    Mr. Ahearn. Yes.
    Mr. DesJarlais. Okay. And without the Government help or 
the taxpayers' help you don't think the company would be doing 
this well?
    Mr. Ahearn. I think we would be doing very well. Without 
the help we would not have been able to enter the U.S. utility 
market with these projects.
    Mr. DesJarlais. Okay. Now, you said that the company is 
traded on NASDAQ?
    Mr. Ahearn. Yes.
    Mr. DesJarlais. How did it rank last year in terms of other 
companies on the S&P?
    Mr. Ahearn. I am not sure I understand what the ranking 
criteria would be, but if you are referring to the stock price, 
the stock price declined last year, in line with the industry.
    Mr. DesJarlais. Okay. In 2008 it traded at over 300 shares, 
is that right?
    Mr. Ahearn. Yes.
    Mr. DesJarlais. Okay. And currently trades about $17?
    Mr. Ahearn. Yes.
    Mr. DesJarlais. If I told you it was the worst performing 
S&P stock in 2011, would that surprise you?
    Mr. Ahearn. It would be out of line with the strong 
fundamentals of our company, but I don't know the statistics on 
the stock price.
    Mr. DesJarlais. And you are Chairman of the Board and 
former CEO?
    Mr. Ahearn. Yes.
    Mr. DesJarlais. Okay. Do the executives at First Solar have 
a lot of confidence in the company's performance?
    Mr. Ahearn. Yes, they do. We all do. We feel like we have 
been built a fundamentally extremely strong company that has 
got a great platform to expand our markets and our business.
    Mr. DesJarlais. Do you know in 2008, or starting in 2008, 
about how much money that First Solar executives pulled out of 
the company, in other words, selling their own stock?
    Mr. Ahearn. No, I don't.
    Mr. DesJarlais. Two point one billion dollars. And I think 
you yourself pulled out roughly $400 million? Is that right?
    Mr. Ahearn. I don't know the dates, but I did sell stock 
over an extended period of time, that is correct.
    Mr. DesJarlais. Okay. Well, this program that we are trying 
to decide whether it is good or bad, 22 of the 26 prospects on 
these loan guarantees were rated basically as junk. So when you 
say the company is doing well, your executives clearly didn't 
have the confidence; they were pulling their own money out. 
Yet, you think it is okay for the taxpayers to invest in this?
    Mr. Ahearn. Well, with all due respect, I disagree with the 
statement that the executives didn't have confidence. We have a 
deeply committed team. There is a lot of money still invested 
on the part of that team and we are focused and growing, and we 
are fundamentally strong. So I disagree----
    Mr. DesJarlais. Okay, so if it is $300 a share to $17 for 
the executives, I guess you just got out as good timing?
    Mr. Ahearn. Look, I sold my shares over a multi-year period 
under transactions that were fully and properly disclosed----
    Mr. DesJarlais. Okay. Well, that is your business. Let's 
move on.
    Did First Solar pressure the Department of Energy to 
approve its three loan guarantee projects by promising that the 
loan guarantees would enable First Solar to build a new 
manufacturing plant in Arizona that would create new jobs?
    Mr. Ahearn. No, we did not.
    Mr. DesJarlais. Could we put up slide three?
    [Slide.]
    Mr. DesJarlais. Does that look familiar?
    Mr. Ahearn. I have seen this email, yes.
    Mr. DesJarlais. Okay. Would that insinuate that maybe they 
were pressuring them to move forward on this project to----
    Mr. Ahearn. No, it would not, not at all. These projects 
were all evaluated independently on their own merits. The 
manufacturing facility, which we hope to build at some point in 
Mesa, was in no way connected with the applications or the 
projects.
    Mr. DesJarlais. What is the status of the plant in Arizona?
    Mr. Ahearn. It is on hold.
    Mr. DesJarlais. Okay. So you are saying that that wasn't 
used to entice the DOE to package these loan guarantees, to 
push them to approve it? You didn't promise that it would 
create new jobs?
    Mr. Ahearn. We did not promise. The loans were not 
packaged. It was not part of the process. The loans were 
evaluated specifically on each project's fundamentals.
    Mr. DesJarlais. So the plan is not producing solar panels 
for the Department of Energy loan guarantee projects, they are 
not producing those that First Solar promised? You are saying 
they didn't promise that?
    Mr. Ahearn. Did not promise that, no.
    Mr. DesJarlais. Okay.
    That is all I have for now. I yield back.
    Mr. Jordan. [Remarks made off microphone.]
    Mr. Kelly. I thank the Chairman.
    Dr. DesJarlais, I think your questioning is right in line.
    You know, one of the things that I think comes into play 
when we have these hearings is that there is a question about 
respect for the people that come in and testify, and I want you 
to understand that we do have the utmost respect for you. But I 
also want you to understand that the most basic responsibility 
I have serving in Congress is respect of the hardworking 
American taxpayers that fund all these projects that you are 
talking about.
    And I get confused sometimes as to where is it that we are 
really looking to protect and who is it that we are looking out 
for. And I have to tell you, coming from the private sector, I 
never had the luxury of having the Government underwrite loans 
for me; I have always had to provide my own capital, had to 
provide my own character, had to provide everything from the 
private sector comes from yourself.
    And that is what concerns me, Mr. Ahearn, I have to tell 
you. Your SEC filings, and maybe we can put up a slide. Can we 
put up a slide that shows--I think it is slide 17, maybe.
    [Slide.]
    Mr. Kelly. Because Dr. DesJarlais asked you about the 
performance of your company. You are saying you have such great 
confidence in your company and how well your company is doing, 
and I look at it and it goes from $303 a share, I believe. You 
know what it traded at yesterday? It was $15 a share. So I 
don't know. I am not questioning your investments; I am just 
questioning when you say you think it is doing quite well and 
you have great confidence in the company. Why would you sell so 
much of your own stock in it? Why would you cash in on it?
    Mr. Ahearn. Well, let me give you the reasons why I think 
it is so fundamentally strong.
    Mr. Kelly. No, no, don't give me that. Really, I look at 
the chart, I don't think you are fundamentally strong at all. I 
think your shareholders are the ones that tell you in the 
marketplace you are doing a terrible job. But whenever you sell 
your own shares of stock, and the people that are on your 
executive board sell your shares of stock, August 7th, 8th, and 
9th you sold almost 700,000 shares of stock in a three-day 
period.
    Now, you are voting with your feet. You are getting the 
heck out of a situation, saying I have to get out of this. But 
what I would really like to do, I would like these hardworking 
American taxpayers to put money into my company. I am the CEO, 
I know what is going on, I have been there from its birth. I am 
watching this thing grow and I have so much confidence in that 
company that I am going to cash out. I am going to take my 
money and run and I am going to ask these hardworking American 
taxpayers just keep funneling money in, because someday, 
somewhere out there this dream is going to come true.
    The hopes and dreams of a company that someday, this is the 
hockey stick, it is flat and someday it is just going to go off 
the charts. Now, we don't know when that day is coming, but 
some day it is going to be there. Now, I have to tell you I am 
not going to be there to watch it, I am going to cash out now. 
I am taking my money and I am running. But I want you folks out 
there that go to work everyday, get up everyday, go to work, 
pay your taxes, clothe your kids, put food on the table, I want 
you to continue to fund this project because, you know what, 
some day this is going to be great.
    I can't believe we sit here and we listen to this, and the 
question that comes up is who in the world is funding these 
projects. It is not the DOE. This is not the DOE's money. This 
is hardworking American taxpayers' money. And I am so sick and 
tired of hearing about disrespect. We don't have respect for 
green energy, we don't have respect for these folks that put 
everything on the line. When you are getting out of something 
as quick as you can and asking taxpayers to go in deeper and 
deeper and deeper, what message does that send?
    Mr. Ahearn. I started this company in 1999 and spent over 
10 years of blood, sweat, and tears----
    Mr. Kelly. And we started our company in 1953.
    Mr. Ahearn.--and investment----
    Mr. Kelly. Yes, I understand. But I didn't have taxpayers 
bail me out. I have to tell you, this is disappointing. You 
tell me it is okay for you to sell $450 million in--$450 
million you pulled out, is that right?
    Mr. Ahearn. If I may----
    Mr. Kucinich. Would my friend yield?
    Mr. Kelly. This is just a yes or no question.
    No, not right now, Mr. Kucinich.
    Mr. Ahearn. I don't have the numbers, so I don't know.
    Mr. Kelly. SEC filing. I do have the numbers. I do have the 
numbers. And to sit here and listen to this week after week, 
month after month, and then go back out and listen. When I go 
back home, when I see people paying as much for a gallon as gas 
as they pay for a gallon of milk, when I see people working two 
jobs to put food on the table and clothes on their kids' back, 
when I see people that worry about whether they are going to 
have a job next year, and then we are telling them, don't worry 
about it, we are looking out for you.
    No, the respect, the respect comes to the American 
taxpayer. That is who the respect comes from. I have no respect 
for a situation where the chief executives take their money and 
run, and ask the American taxpayers to continue to fund a 
project--$300 a share to $15 a share and you guys are doing 
well? I don't know where in the heck you define well, what 
dictionary you look it up in, but this is absolutely abysmal 
and this is why the American people have a great deal of 
wonderment now and the lack of trust in the people they send to 
represent them. The DOE made a horrible, horrible decision, and 
continues to do that.
    Mr. Kucinich, I apologize for not yielding back to you, but 
it hard to yield back when I have to go back home and walk in 
Western Pennsylvania and watch people who can't make their 
house payments, can't make their car payments, can't put food 
on the table, can't educate their kids, and we find out that we 
are pouring money down an open hole and the chief executive 
officers bailed out and asked the taxpayers to put more money 
in.
    Mr. Kucinich. I ask unanimous consent for the gentleman to 
have another three minutes, and I would ask the gentleman just 
to yield briefly to me.
    Mr. Kelly. My time is up, so----
    Mr. Kucinich. Unanimous consent so you can have three more 
minutes.
    I share your passion for what happens with taxpayers' 
dollars that are involved in investments, but I think what 
would be helpful is if we could have the witness respond for a 
couple minutes and explain your position on this and address 
the concerns that Congressman Kelly has raised.
    Mr. Ahearn. Thank you. Thank you very much.
    Mr. Jordan. The gentleman may respond.
    Mr. Ahearn. The first point I would make is that the DOE 
loans that we are talking about in this case were not made to 
First Solar. This was not First Solar's private capital, 
corporate capital funding. These loans were made to three 
projects that First Solar is supplying product to that are 
owned by sophisticated utility investors with utility off-
takes. So these are projects not funding First Solar. This is 
not the same kind of situation that Solyndra or Abound or these 
manufacturing loans.
    First Solar's corporate funding is provided by equity 
funding, which initially came through our venture capital 
company starting back in 1999. We took the risk that you are 
talking about should be taken by venture capital and not 
taxpayers, we took that risk. We were successful and able to 
bring the company public.
    As a public company, there is typically a replacement of 
venture capital money for institutional money. It is a very 
normal thing for venture capitalists, once they take a company 
public, to sell stock over time, get the proceeds so that they 
can go recycle that back into early stage companies. That is 
what happened here. The sales by me and other people on the 
team have absolutely no reflection on our conviction and belief 
in the company and its fundamentals.
    And if I could just, on the fundamentals of the company, 
look, we have guided to $3.5 billion of revenue this year, net 
income on a gap basis of around $315 million, operating cash 
flow of around $1 billion this year. We have pointed out that 
we have multi-year visibility into demand that will continue to 
drive strong profits and cash flow, and we are now expanding 
into emerging markets without the need for subsidies, taking 
what we have demonstrated with the benefit of the DOE Loan 
Guarantee Program and deploying that through exports into other 
markets.
    What happens to the stock price day-to-day is subject to 
all kinds of things beyond our control, not the least of which 
are short interest investors. So I can't control that; I can't 
speak to it. I can control the fundamentals and I am telling 
you they are very sound.
    Mr. Jordan. The gentleman from Pennsylvania wish to 
respond?
    Mr. Kelly. No. And I understand everything you are saying, 
but I am talking about your personal money. When you are 
pulling money out, you are selling 700,000 shares, and I get 
it, I get it, believe me. I get it. Venture capitalists will 
always take a risk that is underwritten. The lower the risk, 
the more money they put in; the higher the risk, the more 
interest they want. These are loans that there really is no 
payback. This is a loan from a DOE that really is kind of, it 
is a gift, it is free money. It really is, it is free money. 
You don't have to qualify the same way I have to do.
    Listen, believe me, I have been every day of my life. I 
have had to actually go out and borrow money, put up my own 
collateral, have my own skin in the game. So I don't want to 
get with this stuff. I just came from Disney World, by the way. 
There is a fantasy land down there too. It is not like this 
one; you actually have to pay your own way there, you don't get 
it for nothing.
    But I have to tell you when you tell me that, as a CEO, if 
Steve Jobs had done that, if Bill Gates had done that, what do 
you think these people would think of that? Jobs is getting out 
of it, must be a good investment; I would like to get back in. 
Gates is getting out of it. These guys aren't pulling out. So I 
just wonder what was the reason for you selling 700,000 shares 
in a three-day period. Why? And the other thing is, why don't 
you buy it back now at $15 a share? It has to be a real 
bargain.
    Mr. Ahearn. I think I----
    Mr. Kelly. Just think what you could buy with the $450 
million that you got.
    Mr. Jordan. If the Ranking Member of the full Committee is 
ready, I will go to him. If he wants to wait, I can go to Mr. 
Mulvaney and come back to Mr. Cummings.
    Mr. Cummings. I am ready. Thank you very much.
    Mr. Jordan. Go right ahead.
    Mr. Cummings. First of all, this question is for our loan 
guarantee recipients on the panel. Each of your companies 
received loan guarantees for projects you are currently 
advancing. I believe it is legitimate and appropriate for 
members of Congress and the taxpayers to ask what you are doing 
with the money, and I am sure you would agree with me. Can each 
of you articulate, or a few of you, for this Committee why you 
believe that a loan guarantee provided by the Government to 
your projects is a good bet? In other words, what are the 
taxpayers getting in return for their investment? Because I 
don't want people to look at this on CSPAN and think they are 
not getting something out of it, that is, the taxpayers. Would 
one of you or two of you try to answer that as best you can? 
Yes, sir.
    Mr. Ahearn. I would be happy to, yes. In the case of First 
Solar, there are three loans that have been made to projects, 
large power plant projects in California that are owned by 
sophisticated energy companies. These loans have been 
investment-grade rated, so the taxpayers, first of all, will 
receive a return of all of that money, $3 billion; they will 
make a profit in addition to that that totals roughly $1 
billion. The funding is allowing for roughly 1200 construction 
jobs over the life of the projects; it is further enabling the 
industry, the renewable energy industry in the U.S. to continue 
to grow and become profitable and export-oriented, which will 
in turn create more jobs So this will prove to be a very 
prudent and timely----
    Mr. Cummings. So it really does have a multiple higher 
effect, does it not?
    Mr. Ahearn. Yes, it does.
    Mr. Cummings. Mr. Fairbank, could you answer that same 
question?
    Mr. Fairbank. Yes, sir. We received $98.5 million loan from 
John Hancock, backed by the DOE loan guarantee and the 1705 
criteria. There was a job criteria. We did create a significant 
amount of new jobs. And another part of the criteria was to 
allow companies to obtain senior debt financing. We had 
borrowed money to construct the plant in a mezzanine level and 
we used a good part of the money to put in place senior debt 
financing and replaced some of the mezzanine debt.
    Mr. Cummings. Let me just ask this. If DOE followed a 
mandate from Congress when it created the Loan Guarantee 
Program, then each of the products under your stewardship has 
some risk associated with it.
    Mr. Woolard, can you explain why it is so difficult to find 
financing in the private sector when bringing innovative 
technology to scale?
    Mr. Woolard. Sure. We received our early backing as a 
company from venture capital, who financed the company. We then 
brought corporate investors in, including Chevron, British 
Petroleum, and others. And as we looked at scaling up, the 
first thing we did was de-risk everything with a demonstration 
facility and grew that from a 6 megawatt facility that we did 
in Israel to a 30 megawatt facility for Chevron. And then to go 
to the large-scale power plants that had been proven. There was 
not technology risk, but to do it at the size and scale that 
was needed, the loan guarantee enabled that transition.
    I would like to answer your first question as well----
    Mr. Cummings. Please do.
    Mr. Woolard.--on what the project is doing well for the 
taxpayer. We have a $1.6 billion loan guarantee that enabled a 
$2 billion project. There are 1700 jobs onsite today. But, more 
importantly, behind this there are 10 more projects that we 
have contractual commitments or power purchase agreements to 
build. That will be $10 billion that will be commercially 
financed. So this enables the transition from a loan guarantee 
program to commercial financing, and I think that is very 
important.
    Mr. Cummings. Would you have been able to do all of what 
you just said without the guarantee?
    Mr. Woolard. No. We would have likely done a smaller. We 
wouldn't have been able to do it at the scale that allowed us 
to commercialize.
    Mr. Cummings. You know, the reason why I am asking these 
questions is because I think it is very easy to demonize 
programs, and then a lot of times we don't hear of the other 
side of it, and that is the benefits that the taxpayer gets, 
the benefits that, it is a situation where the government is 
working with private industry. We always talk about creating 
jobs, and all three of you have talked about jobs being 
created. But you also are talking about innovation, am I right?
    Mr. Woolard. Yes, sir, there is quite a bit of innovation 
enabled.
    Mr. Cummings. In what sense? How so? Could you just talk 
about that for my last 10 seconds?
    Mr. Woolard. Well, we built solar thermal projects in the 
1980s that used an older technology called parabolic trough. We 
were then able to move to a higher efficiency, higher 
performance technology because of this program; it enabled that 
technology shift.
    Mr. Cummings. Thank you very much.
    One other thing, Mr. Chairman. I ask that my opening 
statement be submitted into the record, please.
    Mr. Jordan. Without objection.
    Mr. Cummings. Thank you.
    Mr. Jordan. Thank you.
    Mr. Jordan. We now turn to Mr. Mulvaney, who has been 
patiently waiting. The gentleman from South Carolina is 
recognized.
    Mr. Mulvaney. Thank you, Mr. Chairman. Thank you for the 
opportunity to be here today. And thank you also to the Ranking 
Member, Mr. Kucinich, for allowing me to participate.
    Gentlemen, I will be honest with you. On several levels 
this hearing has been very difficult for me to sit and watch. 
As somebody who comes from the private sector, it is not easy 
for me to sit here and watch you have to defend things that 
ordinarily wouldn't be any of our business.
    Mr. Ahearn, what you do with your investment capital and 
the company you have built for the last 13 years, and what you 
might want to do to take care of your family and reward 
yourself for the work that you have put in should be none of 
our business. And I desperately want it to be none of our 
business.
    But recognize the fact that you are not here today because 
of what you do. You are not here today because of stock that 
you sold or any of you here because of what industry you 
participate in. You are here because you have asked us to be 
here. You have brought this on yourselves. And I hate to tell 
you that, but it goes beyond the loan program. I mean, we would 
be silly, we would be foolish to think that representatives of 
your industry, even if not yourselves as individuals, have 
spent time walking up and down the halls of these buildings in 
Washington for the last decade asking us to make people buy 
what you sell.
    We have requirements, Mr. Chairman, that we have to 
purchase a certain amount now of our energy from renewable 
resources. It is a Federal mandate.
    You have asked us to do that. I wish that you hadn't. I 
wouldn't have supported it, but you asked us to come in and 
say, look, to the American people, you have to buy what these 
people are selling. I am completely sympathetic to Mr. Kelly, 
who would like very much for the Federal Government to go and 
tell people they have to buy X number of cars and have to buy 
it from him. But he didn't get to do that. When I was building 
houses I didn't get that. When I was rolling burritos at a 
restaurant, there was nothing that said people had to come to 
my restaurant and buy my product.
    Beyond that, the loan program is simply on top of that. Not 
only is the 1703 program, the government guarantee program, and 
remember, I think this is lost on a lot of people who are 
participating or watching this, 1705 program is different in 
that ordinarily, under the old program, you all would have to 
pay the credit subsidy cost.
    But under the stimulus program, under the 1705, you didn't 
even have to pay that; the taxpayers had to pay that. So a 
little skin in the game that you all would have under the 1703 
program isn't even there under the 1705 program; it is 
effectively a free program to you folks. And that is why we are 
here.
    We are not here because we don't like you as private 
businessmen. We are not here because we don't want you to be 
successful. To the contrary. I want you gentlemen to be 
successful. I want you to grow your companies. I want the stock 
to go back up to $300, Mr. Ahearn, because I know it not only 
benefits you, but it benefits every one of your employees who 
probably has a retirement program that buys that stock. But you 
have to be here today when you ask us to get involved in your 
business, and you have to be here today when you ask us to make 
people buy what you sell. And I encourage you to consider that 
the next time you come walking up and down the hallways and 
say, I think it would be great if we took that renewable 
component from 10 or 15 to 20 or 25 or 35 percent. Wouldn't it 
be great if we had to have more electric vehicles? That would 
be great because we make some of that stuff too.
    I am tired of people coming to the government as part of 
their business plan and saying, look, if we can figure out a 
way to make the government buy our stuff, that will really help 
us. And, conversely, if we can make the government make what 
our competitors sell illegal, that would be even better. We see 
that every single day and, quite frankly, gentlemen, as 
somebody who came from the private sector, I am sick of it. I 
wish you would compete on your own merits and that we would 
compete on our merits in my business.
    Mr. Ahearn, I hear what you are saying, you are saying low-
cost producer, you are down to $0.73 of kilowatt hours, a 
tremendous success for your company. Please stop asking us to 
help you do that. As bad as I feel for what you have had to go 
through here today, Mr. Ahearn, explaining your stock 
purchases, you have brought every single bit of it on yourself.
    We know it; we have to do it. Mr. Kucinich does. Everybody 
up here knows we just filled out our financial disclosures. 
What we have to tell everybody in the Country every single 
investment that we make that is worth more than $1,000. We have 
to do that every single year. We choose to do that to ourselves 
when we run for these offices. And what you gentlemen have 
endured today, and will endure, because it is not going to get 
easier, it is going to get worse. What you have brought upon 
yourselves today you have brought upon yourselves by coming 
here and asking us to help you.
    Mr. Chairman, I know that was not going to be my line of 
reasoning, but it took my five minutes, and I appreciate the 
opportunity.
    Mr. Jordan. I thank the gentleman. And, to the gentleman's 
point, we have with us Mr. Nelson, who did exactly what the 
gentleman described. He didn't come ask for help and his 
company is succeeding and we applaud that.
    We will turn now to the gentleman from the full Committee, 
the gentleman from California, Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman.
    Mr. Woolard, on September 2nd, 2010, your name appears as 
the CEO of BrightSource, along with Peter Darby as the Chairman 
of PG&E, holding at BrightSource Energy in Oakland, California, 
a fund-raiser for friends for Harry Reid. Do you remember that?
    Mr. Woolard. Yes, sir, I do.
    Mr. Issa. So the Senate Majority leader was pretty 
important to you, important enough for you to hold it in your 
corporate offices?
    Mr. Woolard. With PG&E we have been asked to do this. We 
also have some projects in Nevada as well.
    Mr. Issa. Yes, I know. Let me ask a question. First of all, 
did you speak to, when was the last time you spoke to the 
Secretary of Commerce, Bryson?
    Mr. Woolard. It would have been before he was appointed 
Secretary of Commerce. I have not spoken to him since.
    Mr. Issa. So it was during the time, though, that he was 
the chairman?
    Mr. Woolard. He was chairman of our company----
    Mr. Issa. Right.
    Mr. Woolard.--until he was nominated to Commerce, which 
would have been the middle of last year.
    Mr. Issa. Okay, now, my understanding is it takes a while 
to get vetted, it takes a while to get nominated; it doesn't 
happen overnight. So my question is when he was the chairman, 
you were the president, and he wrote his email to Mr. Daley, 
that was two months before he got the job. Weren't they already 
in discussions? Wasn't he essentially lobbying for your 
organization as the heir apparent, the person they were looking 
at to be Secretary of Commerce and, at the same time, lobbying 
for you?
    Mr. Woolard. No, sir, I don't believe he actually sent that 
email. We basically decided that was not appropriate to send 
and ultimately that email was never sent.
    Mr. Issa. So were there other emails that were sent during 
that period of time to the White House or others at the White 
House?
    Mr. Woolard. No, sir, there was nothing, to my knowledge, 
that was sent.
    Mr. Issa. So this is just a draft that still was hanging 
around?
    Mr. Woolard. Exactly. We decided that it was not 
appropriate and did not send it.
    In addition, we were very careful with every organization 
that John worked with; he was very, very careful from that 
perspective.
    Mr. Issa. Well, it is interesting. The Secretary is the 
founder of the Natural Resource Defense Council, right? And 
that group, while he was heading a public utility, that group 
actually produces and participates in lawsuits that drive up 
the cost of energy, don't they?
    Mr. Woolard. They are an intervener in a lot of siting 
issues with renewables.
    Mr. Issa. So it is sort of amazing. They drive up the cost 
of energy, particularly conventional energy, through a series 
of lawsuits and incumbent utilities get paid a markup on 
whatever their costs are, even if those costs are driven up by 
an organization that is founded or participates with people who 
are insiders. So I do find it interesting that he now is 
supposed to be in charge of making America competitive, but in 
fact has driven up the cost.
    Mr. Woolard and, for that matter, each of you on the panel, 
your company would not exist today if not for the loans and the 
mandates, is that correct? At least as we know it.
    Mr. Woolard. No, sir, I think it would be fair to say that 
we would not be doing as much business in the United States. We 
would be working in other countries, other jurisdictions more 
heavily without the loans or the mandates.
    Mr. Issa. Mr. Ahearn, would you say the same thing, that 
your Malaysia factory would still be selling in Europe and you 
would still be in business and you would still be an S&P 500 
listed company if not for domestic mandates and guarantees?
    Mr. Ahearn. We would still be a successful company, but we 
would not be in the financial condition, sound financial 
condition we are in, and we would not have successfully entered 
the U.S. utility market. We would be a smaller company without 
this.
    Mr. Issa. Isn't it true that if not for a waiver as to the 
carcinogens that are in your PVs, that in fact you wouldn't 
even in the European Union at all? The Union did a waiver for 
your technology to be fielded.
    Mr. Ahearn. No, that is not true. The product isn't 
carcinogenic. There is a elemental material, cadmium, that is a 
stable compound.
    Mr. Issa. But it needed a waiver in the European Union for 
you to field it, didn't you?
    Mr. Ahearn. It didn't, no.
    Mr. Issa. It didn't? And you didn't rely on a single study 
that you paid for in order to convince people of that?
    Mr. Ahearn. No, we didn't.
    Mr. Issa. You didn't pay for it or it wasn't heavily relied 
on?
    Mr. Ahearn. I don't remember paying for one, nor that a 
single study would have been relied on. But I think what that 
is referring to is the European Commission undertaking analysis 
about how to regulate photovoltaics and all the various sub-
technologies, and this question did come into play about what 
do you do with Cadmium-Teluride because there is cadmium in it, 
so forth. Brookhaven National Laboratory and then several 
comparable groups in Europe had done studies. We also funded 
studies and I think there was----
    Mr. Issa. Studies or a study?
    Mr. Ahearn. Multiple.
    Mr. Issa. Multiple studies. If you could give our Committee 
copies of those studies, because we were unable to find the 
quantity that you are referring to.
    Mr. Ahearn. Yes. I would be happy to.
    Mr. Issa. Okay, Mr. Chairman. Thank you. I hope there will 
be a second round.
    Mr. Jordan. Yes, there will. Thank you, Mr. Chairman.
    The gentleman from New Hampshire, if he is ready to go, we 
can go to him. The gentleman is recognized for five minutes.
    Mr. Guinta. Thank you very much, Mr. Chairman.
    Thank you all for being here today. I want to talk to Mr. 
Fairbank about your loan guarantee. My understanding is your 
loan guarantee was about $98.5 million, is that accurate?
    Mr. Fairbank. That is correct.
    Mr. Guinta. Okay. Can you tell me what it means when a 
generation facility is placed in service and online?
    Mr. Fairbank. That means the power plant is up and running 
and operating at at least 20 percent of its capacity.
    Mr. Guinta. Okay. Can you tell me when the Blue Mountain 
project was placed in service?
    Mr. Fairbank. It was placed in service in October 2009.
    Mr. Guinta. And when did Nevada Geothermal receive its loan 
guarantee?
    Mr. Fairbank. We received our loan guarantee on September 
3rd, 2010.
    Mr. Guinta. So a full year after you were online and 
operational?
    Mr. Fairbank. That is correct. And I guess the process from 
when we submitted our application until we got the guarantee, 
that was a 10-or 11-month process.
    Mr. Guinta. Okay. What was the reason that you wanted the 
loan guarantee when you first started the process?
    Mr. Fairbank. We were wanting to have permanent financing. 
We actually had worked with John Hancock to work on a loan from 
John Hancock, and they made the application to DOE.
    Mr. Guinta. So you had an existing either line of credit or 
loan from John Hancock?
    Mr. Fairbank. No, sir.
    Mr. Guinta. What money did you use to get this online?
    Mr. Fairbank. We actually had a facility on commercial 
terms with a senior investment bank in New York to construct 
the project. They withdrew that commitment through the summer 
of 2008 and we needed to scramble to obtain a mezzanine debt 
loan from TCW, which was a $180 million facility. At the time 
we thought of that as a bridge loan and we wold be borrowing, 
we thought, $70 million, and then we thought we would go back 
to the banks for the remainder of the money that we needed to 
build the plant.
    As it happened, several months after that, as you know, the 
banking crisis was--none of these banks were operating, so we 
ended up borrowing $180 million from TCW to build the plant. 
That is how we built the plant.
    And then that wasn't in any way any permanent financing, it 
was, originally we thought of it as a bridge loan. It was a 
very expensive interest rate and we used it for construction. 
So we used a John Hancock loan that was used by the DOE loan 
guarantee to pay back a portion of that loan.
    We also hadn't finished our work. We had built the plant, 
as I think you were pointing out, and that is only a portion of 
the project. We had not finished our work on the well field. So 
a portion of the funds were also to be used to finish the well 
field.
    Mr. Guinta. Okay, so you did you have financing, albeit not 
permanent and at a high interest rate.
    Mr. Fairbank. That is correct.
    Mr. Guinta. You then could not get, through normal 
channels, a bank loan.
    Mr. Fairbank. We may or may not have been able to get 
through normal channels a bank loan----
    Mr. Guinta. But you mentioned that was around the time of 
the banking crisis, so I am inferring from that that your 
position would be that you couldn't get access to----
    Mr. Fairbank. Oh, when we were wanting to build the plant?
    Mr. Guinta. Yes.
    Mr. Fairbank. We actually were forced into that loan 
because we had started with our EPC contract and they were 
given a limited notice to proceed, and if we hadn't acquired 
the rest of the money that we needed to finish the plant, we 
wouldn't have been able to hold schedule relative to the PPA 
and we wouldn't have been able to hold the cost, so that the 
EPC contractor had guaranteed a delivery time and a cost.
    Mr. Guinta. Okay, but you did have that financing in place 
and you did actually get the plant up and running because the 
plant was operational back in October of 2009. So I guess my 
point is why would you then get a loan in September 2010, a 
year later? To me it sounds not like a loan, it sounds like a 
bailout of your business plan.
    Mr. Fairbank. It wasn't a bailout of the business plan, it 
was putting in place senior debt financing, which is one of the 
primary goals of the 1705 program.
    Mr. Guinta. Could you get that financing anywhere else?
    Mr. Fairbank. We utilized the program that was there. The 
banks were----
    Mr. Guinta. Could you get the financing from the private 
sector?
    Mr. Fairbank. It is possible we might have been able to; it 
is a bit speculative whether we would have or not. I am sure 
that we would have found a way.
    Mr. Guinta. Did you try?
    Mr. Fairbank. We----
    Mr. Guinta. Or did you just choose to go solely into the 
1705 program?
    Mr. Fairbank. Well, we went to the market----
    Mr. Guinta. Yes.
    Mr. Fairbank.--and we had, my recollection was, four 
commercial bankers, investment houses make proposals. John 
Hancock made the best proposal, so we basically went with John 
Hancock to see if we couldn't put together a commercial loan, 
and John Hancock made the application to DOE because that 
program was available and it was a great assistance for them to 
be able to do that. I don't know if Hancock would have done it 
without the loan guarantee; they said they might. But obviously 
the DOE loan guarantee helped them make their decisions.
    Mr. Guinta. Well----
    Mr. Fairbank. And we weren't involved with that; we weren't 
the applicant for the DOE loan guarantee, that was John 
Hancock. We were involved peripherally.
    Mr. Guinta. But you were the recipient of the money.
    Mr. Fairbank. We were the recipient of the John Hancock 
money, that is right.
    Mr. Guinta. And you knew that they were going for 1705?
    Mr. Fairbank. Yes, sir.
    Mr. Guinta. Okay. So you have the plant in place, you file 
the application. You say that you had an opportunity in the 
private sector, but for whatever reason you opted not to 
utilize those loans, probably because this one was a better 
rate. You then repaid existing dollars. So the point of this is 
that the stimulus, whether you agree or disagree with it, the 
point of it was to create jobs. What jobs did this create? This 
was repaying an existing loan for an existing plant that was 
already in operation.
    Mr. Fairbank. It was operating at 22 megawatts at the time 
that we received loan, so we had placed it in service, but it 
wasn't operating at its full capacity, so we had to finish the 
well field. And I think it has been very transparent in our 
Part 1 application for the loan exactly where the money was to 
be spent. A portion was to pay down the TCW facility and a 
portion was to finish the well field. The jobs that----
    Mr. Guinta. I just don't see how the business practice for 
the Department of Energy----
    Mr. Fairbank. The number of jobs----
    Mr. Guinta. Excuse me. Reclaiming my time, sir. I don't see 
it as a good practice for the Department of Energy to use 
taxpayer subsidized loans to provide to an entity that already 
has an existing facility.
    Mr. Fairbank. Well----
    Mr. Guinta. That is my personal point of view, but I don't 
think taxpayers in this Country want DOE providing taxpayer 
loans to a company to pay back a loan on an existing facility.
    But my time has expired. The Chairman has been very 
gracious. I appreciate it and I yield back.
    Mr. Jordan. I thank the gentleman.
    Mr. Fairbank. I didn't hear a question there, so I will 
just not address that.
    Mr. Jordan. Okay, great.
    Gentleman from California is recognized.
    Mr. Issa. Thank you, Mr. Chairman.
    And just following up on the gentleman's statement, I share 
his situation, which is if DOE had said, look, we will give you 
X amount of additional money, but you can't pay back your own 
associated parent company, you would have still taken the 
money. Bottom line is money flowed to a loan repayment to 
yourself, effectively, as part of it, something that is, as I 
understand it, is prohibited by DOE, but I am not going to ask 
you if it is prohibited for DOE to do it, because they 
obviously did it, as they did so many things that were wrong in 
the case of these loan guarantees.
    Mr. Woolard, I just want to make sure the record is clear. 
When I asked about your strong support for Senator Reid and 
obviously we went over these letters earlier that show that 
there was direct political influence with the chief of staff 
and the President, I wasn't implying there is anything wrong in 
these contributions. I mean, ultimately most of the energy 
companies, including all the public utilities in California, 
have historically supported me; it is not the money. I just 
wanted to make it clear that Senator Reid was very important to 
you, as he obviously was to Mr. Fairbank.
    I want to go back, though, to Mr. Ahearn. I want to make 
sure I get your statement correct, that is why I asked to go 
first this round. You said that you had multiple studies, but 
isn't it true that by your own PowerPoint, which we have, when 
it says risk, we are almost completely relying on the Vasilis 
and his team. That is what that is, is multiple studies done by 
one person, isn't that true?
    Basically, your support for your risk, which is our 
research ultimately proves, if it proves unpersuasive, 
essentially this carcinogen incorporated and you say not a 
risk, you had to convince the commission and his multiple 
studies were a big part of how you convinced them; and a risk 
was you wouldn't be selling in Europe if his studies, which you 
did pay for, hadn't helped bolster your case.
    Now, isn't that a more accurate statement, rather than your 
saying that there were multiple studies and you didn't remember 
if you pay for it? You did pay this organization; you relied 
heavily on it in your own PowerPoint statement, isn't that 
true?
    Mr. Ahearn. I respectfully--I need to break that down.
    Mr. Issa. Okay, did you----
    Mr. Ahearn. I don't think that is true, no.
    Mr. Issa. Did Vasilis receive money from your company for 
any or all of these studies?
    Mr. Ahearn. Not to my knowledge.
    Mr. Issa. Okay. Were you almost completely reliant on his 
studies?
    Mr. Ahearn. I would say no.
    Mr. Issa. Okay, you say no. So the fact that your own 
PowerPoint shows that as a risk?
    Mr. Ahearn. I don't know the context of this slide or where 
it was made. I am happy to----
    Mr. Issa. Well, it was made by you folks and delivered 
under our discovery.
    Mr. Ahearn. I just don't know the period of time or what 
that was prepared----
    Mr. Issa. Oh, I apologize. We got it from a whistleblower, 
you didn't give it to us. But are you saying that you don't 
believe it is yours?
    Mr. Ahearn. No, no, not at all. I am just saying I can't--
that particular quote, without the context, I am not sure what 
it means.
    Mr. Issa. Okay.
    Mr. Ahearn. But I would be happy to give you more----
    Mr. Issa. We would be happy to get more of these in 
discovery, since we had to get this from a whistleblower, who 
basically says, look, you were reliant completely on this 
individual. The whistleblower informs us that you did pay, so 
we look forward to getting that right. And what we are seeing 
is you needed this to work to get into the European Union, and 
you needed the money to be where you are today.
    I am going to ask one question because I have been waiting 
to ask this for a long time, ever since they berated General 
Motors, Ford, and Chrysler when they came in. What kind of jet 
did you fly in on today?
    Mr. Ahearn. I flew in yesterday.
    Mr. Issa. Yesterday.
    Mr. Ahearn. On a Challenger.
    Mr. Issa. A Challenger 604, 605?
    Mr. Ahearn. Three hundred.
    Mr. Issa. A 300. Oh, one of the new superminis. Pretty 
efficient. That was a nonstop flight from, I assume, Tempe?
    Mr. Ahearn. Yes.
    Mr. Issa. Okay. I just think that if you are so concerned 
about--and I know it is more efficient than the big birds, but 
is that really environmentally sensitive?
    Mr. Ahearn. And let me point out that that has nothing--
First Solar did not pay for that; First Solar had nothing to do 
with that.
    Mr. Issa. Okay. Well----
    Mr. Ahearn. That is something I did on my own.
    Mr. Issa. We are not going to ask him if he used the money 
he took out of the company. Staff already has better questions 
that I do; I wouldn't ask that.
    Let me just ask one more question. Your production 
facilities, do they use your solar panels for the energy that 
they produce in order to manufacture?
    Mr. Ahearn. Not for the energy----
    Mr. Issa. Okay. Is it true you looked at California and 
made a decision not to come into California because of two 
major factors, the regulatory environment and the cost of 
energy?
    Mr. Ahearn. I don't know that that is the case. I think we 
looked at a number of places and----
    Mr. Issa. You ruled out California, the very place that has 
the mandates that help many of your companies succeed because 
we mandate that we buy your much higher, much subsidized cost; 
it drives up the rate payer cost dramatically and makes 
manufacturing in California undesirable. So you decided not to 
manufacture in a high-cost area. Basically, I see you are in 
Ohio, which is a low-cost energy area. You are in Tempe, 
Arizona, a low-cost energy area; they even use coal for some of 
their electricity. So is it fair to say that energy costs 
determine somewhat, in addition to labor costs, where you 
manufacture?
    Mr. Ahearn. I would say it would be one of a number of 
factors.
    Mr. Issa. What puts you in Malaysia?
    Mr. Ahearn. We wanted to have a base of manufacturing in 
Asia, as well as Europe and North America, as we were building 
up the company, and at the time, when we assessed the risk 
returns of the various Asian locations, having never done 
business in Asia, we thought Malaysia was a moderate risk, 
reasonable place to be located.
    Mr. Issa. I am going to close, but just noting that if 
these figures are still correct, Germany, 560 jobs; Ohio, 280; 
Malaysia, 1680. It sounds like you are not an American company 
particularly, you simply have a small presence in Ohio and 
another one in Arizona, that, in fact, we put an awful lot of 
money into putting you into manufacturing in other countries 
outside America and that, in fact, the loan program 
dramatically made it possible for you to have overseas jobs, 
not to have American jobs. Is that reasonably correct, that the 
majority of the jobs that you provide are not in America and 
that the loan program facilitated that as much as anything?
    Mr. Ahearn. Well, I would disagree respectfully with the 
overall characterization.
    Mr. Issa. Not the characterization, just the numbers.
    Mr. Ahearn. In sheer numbers, most of our full-time are 
outside of the U.S.
    Mr. Issa. Okay, so jobs created with loan guarantees, 
stimulus and others, basically not American.
    Mr. Ahearn. All those jobs are American, all the jobs 
directly created with the loan guarantee.
    Mr. Issa. Okay, so those jobs wouldn't be there except for 
these loans, but those other jobs would be is your assertion?
    Mr. Ahearn. The manufacturing offshore would be, but the 
R&D, the engineering, the hub of our business is here that is 
supported by those. But sheer numbers I agree with you.
    Mr. Issa. Thank you, Mr. Chairman. I yield back.
    Mr. Jordan. I thank the Chairman.
    The gentleman from Ohio is recognized, Mr. Kucinich.
    Mr. Kucinich. I want to thank my friend from California for 
his defense of American manufacturing. Also, it seems that the 
Majority is raising a new point of view with respect to the use 
of corporate jets, which I find interesting.
    Mr. Issa. Dennis, you have warned me down over the years.
    Mr. Kucinich. I know. We are finally happening.
    I also want to ask unanimous consent--I am glad that my 
friend from California, less recently from Cleveland, pointed 
out that Senator Reid didn't do anything wrong here. Matter of 
fact, I have unanimous consent the record of contributions from 
PG&E to some of the most outstanding members of Congress, some 
of the absolutely best equipped to analyze business members of 
Congress who are included in this list, and I just would ask 
that that be submitted.
    Mr. Jordan. Without objection.
    Mr. Kucinich. And I would also ask any member of the 
Committee wants to join me on H. J. Res. 100, which would end 
all corporate contributions, basically turn Federal elections 
into public financing. H. J. Res. 100. Any of you want to join 
in?
    Mr. Issa. Would the gentleman yield?
    Mr. Kucinich. Of course.
    Mr. Issa. I assume when you say corporate you mean PAC 
money. You don't mean corporate. Because corporate money has 
been banned before you and I were born.
    Mr. Kucinich. Right. All private money. That is what I 
mean.
    Mr. Issa. Thank you.
    Mr. Kucinich. Thank you.
    Okay, now, the question. Mr. Woolard, your January 4th 
email to the DOE official you reference the fact that ``a large 
group at NYC focused on this transaction and DOE ability to 
execute.'' This email continues: ``Things are not good and 
there is a sizeable group of private equity investment banks 
writing a letter to Chu about the status of the program and 
inability to get loans through.''
    I need quick answers. Mr. Woolard, did this investment 
group have their own money invested in the project?
    Mr. Woolard. They did not represent our project; it is a 
group called U.S. PREF----
    Mr. Kucinich. Did they have their own money invested?
    Mr. Woolard. In multiple projects, quite a few.
    Mr. Kucinich. Why were they frustrated?
    Mr. Woolard. It was private sector money that was coming in 
as the highest at-risk layer of money, the equity tranch. But 
the process at DOE was slow and things had died.
    Mr. Kucinich. So the DOE review process was drawn out, is 
that what you are saying?
    Mr. Woolard. It was very--it took a lot longer than 
anybody--than had ever been expected or been represented.
    Mr. Kucinich. So why did these private equity investors, in 
fact, send a letter to the Secretary and, if so, what did it 
say?
    Mr. Woolard. I believe what the result of what this group 
was they came down and talked directly to everybody from 
members, anybody who would listen to them, it was a large 
group, and they said that the program was not executing. They 
had private capital ready to deploy in the riskiest tranch, but 
they needed----
    Mr. Kucinich. So would the private investors, utility 
company purchasers and your all, have reason to be critical of 
DOE's being too thorough in their review of your applications?
    Mr. Woolard. That was basically, the theme was that it had 
taken a very long time. We took four years for a two-year 
process.
    Mr. Kucinich. Well, okay, the email also says this: ``Darby 
at PG&E talked directly to Obama about the program's challenges 
and the bad situation it puts him in. DOE credibility is thin 
and I am currently trying to put off comms with Hill until we 
talk.''
    Now, Mr. Woolard, I assume that Darby refers to Peter 
Darby, former CEO of PG&E, correct?
    Mr. Woolard. Yes, sir.
    Mr. Kucinich. And didn't California recently pass a law 
requiring utilities to begin purchasing renewable energy in 
2014 and that as much as 33 percent of any utility's energy 
needed to be renewable by 2020?
    Mr. Woolard. Yes, sir. The relevant law at the time was 20 
percent, and then it has been increased.
    Mr. Kucinich. Isn't it also the case that securing a 
purchaser of the energy to be produced at your project was 
imperative to DOE's evaluation of BrightSource's loan guarantee 
application?
    Mr. Woolard. Both BrightSource and other loan guarantee 
recipients were critical. PG&E could not meet the RPS 
standards.
    Mr. Kucinich. So what would happen if the DOE continued to 
drag it out, drag out the due diligence?
    Mr. Woolard. PG&E was at significant risk with the 
regulators because they wouldn't have been able to deliver----
    Mr. Kucinich. Well, would they have faced sanctions from 
the State if they didn't meet the renewable energy standards?
    Mr. Woolard. I believe so.
    Mr. Kucinich. So ultimately BrightSource was awarded a 
conditional commitment in February 2010 and a loan guarantee 
more than a year later, in April 2011, correct?
    Mr. Woolard. Correct.
    Mr. Kucinich. So after all the DOE due diligence, do you 
believe that your DOE loan was awarded on its merits or because 
of a conversation PG&E's CEO had with the President?
    Mr. Woolard. No, I believe it was all done on its merits. 
It was a very thorough process and it started back in 2006, 
actually.
    Mr. Kucinich. Okay, Mr. Ahearn, the Majority's recent 
report refers to First Solar's loan guarantee as a scheme 
characterized by failure to prove innovativeness. In March 
2011, however, Arizona Governor Brewer praised First Solar's 
projects, stating the company's ``presence in Arizona has been 
a great engine in driving our renewable energy sector 
forward.'' Senator McCain praised First Solar's decision to 
build in Arizona and a top bundler for the Senator's 
presidential campaign served on First Solar's board of 
directors since 2010.
    Do you believe First Solar's political connection had any 
bearing on the application process?
    Mr. Ahearn. Absolutely not.
    Mr. Kucinich. Do you believe that your DOE loan guarantee 
application was awarded on its merits?
    Mr. Ahearn. Yes, each of them underwent a very rigorous 
detailed process.
    Mr. Kucinich. Now, members of Congress, including members 
of this Committee, have sent nearly 500 letters to Secretary 
Chu in support of green technology projects in their districts, 
both Democrats and Republicans, supported Abound Solar's loan 
guarantee application. Members of Congress also supported 
Nevada Geothermal's loan guarantee projects.
    Mr. Witsoe, Mr. Ahearn, do you believe these members of 
Congress were requesting special treatment of your companies? 
Mr. Ahearn?
    Mr. Ahearn. No, I think they were doing what their 
constituents expect.
    Mr. Kucinich. Mr. Witsoe?
    Mr. Witsoe. No, not to my knowledge.
    Mr. Kucinich. So, Mr. Chairman, I don't really think that--
so you think they were awarded on the merits, Mr. Witsoe?
    Mr. Witsoe. I know we used the loan to build our new 
technology.
    Mr. Kucinich. Awarded on the merits?
    Mr. Witsoe. We doubled efficiency.
    Mr. Kucinich. On the merits?
    Mr. Witsoe. Yes.
    Mr. Kucinich. On the merits?
    Mr. Ahearn. Yes.
    Mr. Kucinich. Okay.
    So, Mr. Chairman, this broad scandal we are talking about, 
I don't know, I don't see it. I think we actually have a system 
here that is trying to work and we should stop beating each 
other up on it. But we should invite, yeah, I think it would be 
good to have the private equity people in here too. Thanks very 
much.
    Mr. Jordan. I thank the gentleman.
    If we could put back up that email that the Ranking Member 
just cited, the January 4th, 2010, email from Mr. Woolard to 
Mr. Rogers.
    [Slide.]
    Mr. Jordan. Mr. Witsoe, do you have any communications with 
the Department of Energy where you reference conversations with 
the President of the United States?
    Mr. Witsoe. No, not that I know of.
    Mr. Jordan. Mr. Fairbank, do you have any communications 
with the Department of Energy concerning your loan guarantee 
program where you reference the President of the United States?
    Mr. Fairbank. None whatsoever.
    Mr. Jordan. Mr. Ahearn, do you have any?
    Mr. Ahearn. Not to my knowledge.
    Mr. Jordan. Mr. Nelson, do you have any?
    Mr. Nelson. No, sir.
    Mr. Jordan. Imagine that, you don't have any.
    Read this paragraph: Also, Darby at PG&E talked directly to 
Obama, not the President, not the President of the United 
States; Obama, about the program's challenges and the bad 
situation it puts him in, the President himself, I assume that 
is referring to, DOE, Department of Energy's credibility is 
thin and I am currently trying to put off communications with 
the Hill until we talk.
    Now, if that is not political influence, I don't know what 
is. Think about this. This was about a $15 billion program, 
right? You all are competing for some of that money. Mr. Nelson 
is not.
    It is amazing to me. Mr. Nelson, how did you do it? We have 
just had, now, two hours of the shenanigans that went on. How 
in the heck did you make it? How are you doing it?
    Mr. Nelson. We have a group of committed private citizens 
who love renewable energy, see the future, and have committed 
the funds to our management team and our technology.
    Mr. Jordan. But you guys are actually, so Mr. Nelson is 
dealing with private investment, he is making it; you guys, 
though, decided to compete for this available dollars. Do you 
think it is an unfair advantage for BrightSource to be able to 
talk directly to the White House?
    Put up the other email. Put up the other email, the one--
yes, this one. Put up the one right here, where----
    [Slide.]
    Mr. Jordan. Now, Mr. Woolard has said under oath today that 
they did not send this. Is that correct, Mr. Woolard?
    Mr. Woolard. That is correct.
    Mr. Jordan. But just the fact, well, let me ask you, Mr. 
Witsoe. Did you ask the people at the Department of Energy if 
they would proofread a letter that your chairman of the board 
was thinking about sending to the White House chief of staff? 
Did you guys do that?
    Mr. Witsoe. No, we did not.
    Mr. Jordan. Mr. Fairbank, did you have a letter that you 
sent to the Department of Energy, the people who were going to 
decide whether you get the loan or not, did you have a letter 
that you asked them to proofread before your chairman sent it 
to the White House chief of staff?
    Mr. Fairbank. We didn't do anything like that.
    Mr. Jordan. Okay.
    Mr. Ahearn, did you guys ask the Department of Energy to 
proofread any correspondence you were thinking about sending to 
the White House chief of staff, pretty important guy?
    Mr. Ahearn. Not to my knowledge, no.
    Mr. Jordan. So do you think that potentially put you at a 
competitive disadvantage when you are trying to secure a loan 
guarantee program and help your company and help your projects?
    Mr. Woolard. You know, my view, going through the process 
we did, it wouldn't have mattered, honestly. I mean, this was a 
rigorous, very objective----
    Mr. Jordan. But at least it raises the concern if a 
potential competitor for a scarce amount of dollars is citing 
conversations with the President of the United States in 
correspondence with the people making the decision, that at 
least raises some whistles and some alarm bells, right?
    Mr. Woolard. I can understand the appearance.
    Mr. Jordan. Mr. Fairbank, do you think that raises some 
concern?
    Mr. Fairbank. We received bipartisan support with----
    Mr. Jordan. No, no, that is not my question. Do you think 
correspondence from a potential competitor for a finite amount 
of money, where they cite conversations with the President of 
the United States, where they send a letter and ask them to 
proofread it and them to edits to it, do you think that maybe 
raises some concern?
    Mr. Fairbank. I don't want to get involved with that.
    Mr. Jordan. Mr. Witsoe? Might potentially, maybe? Do you 
think maybe a taxpayer would say that might put Mr. Witsoe's 
company at a little bit of a disadvantage to Mr. Woolard's 
company? Do you think so?
    Mr. Witsoe. I can only comment that Abound had a fair 
process, and I think that is for you folks to----
    Mr. Jordan. Mr. Nelson, do you think it puts you at a 
little bit of a competitive disadvantage?
    Mr. Nelson. No, I don't. I think ultimately I don't blame 
any----
    Mr. Jordan. That is an even better answer. That is an even 
better--we are back to Mr. Mulvaney's point. We shouldn't have 
had this goofy program going on in the first place. If you 
don't think it puts you--you can make--I didn't expect that 
answer, I will be honest with you, Mr. Kucinich. I didn't 
expect that. But that is even better.
    Mr. Nelson. I don't blame any of these gentlemen, who I 
have a lot of respect for, for working within the rules to get 
every competitive advantage they can, including getting 
government money. The problem is not in their approach; the 
problem is in the rules.
    Mr. Jordan. Exactly right. Exactly right.
    Mr. Woolard, here is what I want to know. So you didn't 
send the correspondence to the White House. What happened in 
the course of applying and going through this process? What 
took place that led you and your company to believe it was okay 
to ask the people who are deciding, hey, can you edit this 
because we want to send this from our chairman, who is going to 
be the next Commerce Secretary, to the White House chief of 
staff?
    Mr. Woolard. Mr. Chairman, I don't, frankly, as I go back 
through the last several years, I don't remember what exactly 
transpired and would have made something okay or not. 
Ultimately, we decided it was not smart to send and it was not 
appropriate to send, and did not. We wanted to make sure 
everything was clearly done on its merits, which I believe it 
was, and that was ultimately the goal, and we wanted to make 
sure it was a very clear and unambiguous process.
    Mr. Jordan. And I want to be quick here because I am over 
time. But I just want to be clear. When an email to the senior 
advisor to the Secretary of Energy uses this kind of language, 
Also, Darby at PG&E--not Mr. Darby, not the CEO--Darby at PG&E 
talked directly to Obama. When you use that kind of language, 
this is not, Mr. Rogers, I know you work for Secretary Chu and 
this is an important thing. The CEO of PG&E has had the ability 
to talk directly to the President of the--this is casual, hey, 
we talked to Obama. This sounds like this was pretty common; 
you had some kind of relationship with folks at the White House 
where you can use this kind of language in correspondence to 
the people who were making the decision about $1.6 billion of 
taxpayer money.
    Mr. Woolard. Actually, I think it is important to read the 
language there, and I think it is important to note that Mr. 
Darby was talking about the program. And at that point in time 
the DOE program was not getting loans out, it was not 
functioning. The program itself, nothing to do with 
BrightSource's loan guarantee, but the program was not getting 
loans done and it was putting not just us, but many of his 
projects at risk.
    Mr. Jordan. Let me ask you this. To the other email, the 
draft that you asked them to proofread, whose decision was it 
not to send that correspondence to Mr. Daley?
    Mr. Woolard. At the end, it was John Bryson and I said that 
is not appropriate and did not do it.
    Mr. Jordan. And do you think, I am just curious for our 
panel, do you see any concern, confusion, misstatements 
possibly when you look at how the Secretary of Education, Mr. 
Chu, responded to my questions two months ago, where I asked 
him directly did the fact that John Bryson at BrightSource, now 
the Commerce Secretary, have any influence on your decisions to 
grant BrightSource a loan guarantee of $1.6 billion, when I 
asked him did he have any correspondence with the White House, 
did any of that influence you, and I specifically mentioned the 
chief of staff, do you guys think that there is any concern or 
confusion there?
    Mr. Nelson? Do you think at least it was worth looking 
into?
    Mr. Nelson. Yes, I think it is, although I have no basis to 
believe that it actually happened. But if there is some 
malfeasance in that regard, I would look into it.
    Mr. Jordan. Mr. Witsoe?
    Mr. Witsoe. I don't have any knowledge of it.
    Mr. Jordan. I figured you guys would take that.
    Anyone else want to comment?
    [No response.]
    Mr. Jordan. I didn't think so. I didn't think so.
    We will turn next to the gentleman from Maryland, the 
Ranking Member of the full Committee, Mr. Cummings.
    Mr. Cummings. I yield a minute to Mr. Kucinich.
    Mr. Kucinich. I thank the gentleman. A couple things here 
very quickly. Going back to the memo from Mr. Woolard to Matt 
Rogers, the paragraph that reads, ``Also, Darby at PG&E talked 
directly to Obama about the program's challenges and the bad 
situation it puts him in.'' Now, is this memo talking about the 
bad situation Darby is put in or the bad situation President 
Obama was put in?
    Mr. Woolard. As I read it, it is clear PG&E was in a bad 
situation.
    Mr. Kucinich. Okay. So this does not say the President was 
in a bad situation, this is about PG&E and Darby?
    Mr. Woolard. Right. In fact, I believe concurrent with this 
there was a public report out starting to discuss their bad 
situation relative to the loan guarantee program disclosure.
    Mr. Kucinich. Okay. This comes up with a new aphorism, that 
familiarity breeds investigation.
    I also want to thank my friends from this side of the aisle 
for exploring the mythologies of free market capitalism.
    Mr. Cummings, thank you.
    Mr. Cummings. Mr. Chairman, you have announced your 
intention to hold a follow-up hearing and you committed to 
inviting Governor Schwarzenegger, and I would invite you to 
consider asking both Wall Street investors who wrote Secretary 
Chu and the former CEO of PG&E and ask them why they believe 
this project was so important. Would you do that, sir?
    Mr. Jordan. I will take that up with, the Chairman of the 
full Committee committed to that. I will take that up with 
Chairman Issa.
    Mr. Cummings. Thank you very much.
    Gentlemen, I have been listening to you very carefully. I 
want to go back to something Mr. Nelson said. I believe that 
all of you are honorable people simply trying to carry out a 
business in a very competitive world. And as I sit here and I 
listen to you, I am convinced that, if I were you, I would feel 
like I was being beaten up on for simply trying to do what was 
best for your businesses.
    And while we are sitting here going through this, there are 
people all through these United States that both parties claim 
they want to see become employed, millions upon millions of 
them hoping and praying that they can get a job. And part of 
the stimulus bill was to try to get folks employed and I, for 
one, believe that it was quite effective in doing that; I don't 
give a damn what anybody says. I wish we had more jobs.
    But one of the things that it also was to do, and I quote 
from the law, was to provide investments needed to increase 
economic efficiency by spurring technological advances in 
science and health, and to invest in transportation, 
environmental protection, and other infrastructure that will 
provide long-term economic benefits.
    The reason why I am getting into this is one of the things 
that we wanted to do was be innovative. I have said from many a 
podium that while we may go through our economic problems, we 
have to be--and the President said this--we have to be 
innovative, create jobs and be innovative. That is what the 
United States is all about. That is why we are the Country that 
we are.
    Mr. Nelson, I applaud you for saying what you said. You 
said you believe these guys; these are great guys basically is 
what you were saying. Maybe there is something wrong with the 
rules, but these are great guys being competitive.
    I want to ask you, Mr. Ahearn, talk about innovation with 
regard to the stimulus and jobs. Can you talk about that with 
regard to your company?
    Mr. Ahearn. Yes, I sure can. Well, one way to think about 
it, these three projects we are talking about are the power 
equivalent of an average size nuclear plant. We have built 
something here that has never been done anywhere in the world. 
In order to build solar plants of that size and magnitude, we 
have had to solve a lot of problems that had never been solved 
before. We now have, even though they are not completely 
constructed, we have people coming from all over the world to 
see what we have done and we have begun negotiations and 
discussions with potential customers in markets all over the 
world.
    As those markets take shape, the innovation and the job 
creation in the U.S. for our business and for our value chain 
will accelerate because the creation of goods and services that 
are exported into these countries to meet their power needs 
will begin to open up and grow massively. And we are really 
keyed by getting solar off the rooftop, into big utility scale 
power plants, and that did require, and still does, the 
solution of a lot of pressing problems, and it can only be 
done, some of this can be done in a laboratory; some of it can 
only be done in the marketplace, at the project, encountering 
and solving problems. So that is the big piece.
    It directly created an average of 1200 construction jobs, 
which is not trivial. It kept our factory and our supply chain 
here in the U.S. running in a stable fashion, and will for 
several years. But the future, I think, is the export and the 
innovation that allows us to break into new markets, and this 
has been instrumental.
    Mr. Cummings. You know, Mr. Ahearn, I often say our 
children are our living messages that we send to a future we 
will never see, and listening to what you just said----
    Mr. Chairman, I just ask that I get two additional minutes 
like Mr. Guinta got.
    Mr. Jordan. Go ahead.
    Mr. Cummings. You know, the things you are talking about 
are things that I take it will have spinoff into a time when we 
are probably dead, in other words, what you are doing now. Is 
that a fair statement?
    Mr. Ahearn. Absolutely. And there are lots of follow-on 
effects to this. One thing, with our success, we have put down 
a marker in the marketplace where Mr. Nelson and others are now 
competing to try to beat us. So you have a whole new wave of 
R&D opening. Silicon Valley is full of startup solar companies 
that were funded to try to beat First Solar. That is literally 
the motto that some of them have. And that is really what I 
think our Country has been all about, is competition and 
innovation spurred by success and by market opportunities. It 
is a global marketplace and the hub of the activity and the 
innovation will always be in the United States.
    Mr. Cummings. Mr. Woolard?
    Mr. Woolard. In terms of innovation?
    Mr. Cummings. Innovation, yes. And the value of innovation. 
See we are talking all this stuff here today, but the big 
picture is innovation and jobs, and how does the United States 
stay competitive. You know, we hear a lot of talk, but we don't 
always walk the walk. And what I am saying to you is you are 
the guys who are like on the front line, like in the trenches, 
like having to make decisions, difficult decisions, putting 
your butts on the line every day.
    So I am just so glad that you are here and that you are the 
innovators. I just want to just get an idea. While we are 
talking all this stuff, the Chinese are running, just moving 
rapidly, and I just want to make sure we stay focused on what 
we need to stay focused on, and that is the United States being 
number one. I don't want to be number two. I don't want to be 
number three. We are better than that. And sometimes I think we 
get mired in stuff that distracts us, and then get mired in a 
culture of mediocrity and failure, and I think we need to be 
very careful with that.
    I think my time is up, unfortunately.
    Mr. Jordan. Mr. Nelson, do you want to be number one? Do 
you want to have the best company you can possibly have?
    Mr. Nelson. Yes, sir.
    Mr. Jordan. Okay, good.
    Mr. Woolard, just real quick. The email, the proofread 
email that you sent and you asked them to take a look at, and 
you said that you did not send that to the White House chief of 
staff, Mr. Daley?
    Mr. Woolard. Yes, sir.
    Mr. Jordan. You know for certain, you clearly remember that 
you did not send that email?
    Mr. Woolard. I would not have sent it; I believe it would 
have been from John, and I don't believe John----
    Mr. Jordan. Well, which is it, he didn't send it or you 
don't believe he sent it?
    Mr. Woolard. To the best of my knowledge, he did not send 
it.
    Mr. Jordan. So you know that you didn't send it, even 
though you are the one who asked for them to proofread it, and, 
to the best of your knowledge, you think Mr. Bryson, now 
Commerce Secretary, didn't send it.
    Mr. Woolard. Yes, sir.
    Mr. Jordan. Okay. Did you communicate with the White House 
in some other fashion? Did you send them another letter? Did 
you call them? Did you go to the White House and meet with them 
about this issue?
    Mr. Woolard. I have never met with Mr. Obama.
    Mr. Jordan. Do you know if Mr. Bryson did while he was 
still CEO? Did he meet with, did he discuss this on a phone 
call? Did he or you discuss this on a phone call with the White 
House chief of staff?
    Mr. Woolard. I certainly never have and----
    Mr. Jordan. You did not?
    Mr. Woolard. I did not.
    Mr. Jordan. And Mr. Bryson, to your knowledge?
    Mr. Woolard. To the best of my knowledge didn't.
    Mr. Jordan. Okay. Just wanted to be clear.
    The gentlelady from New York is recognized.
    Ms. Buerkle. Thank you, Mr. Chairman, and I apologize. 
Quite ironically, I have been chairing a subcommittee hearing 
for veteran affairs, making sure that the heroes of this 
Country who have served our Country in service and sacrifice 
are getting what they need, and our hearing today was on 
prosthetic devices. So I apologize for not being here for most 
of this morning's hearing.
    I want to just talk for a few minutes here. A few weeks 
back, in March, Secretary Chu was here and talked to us about 
the loan guarantee program, and he praised the work that was 
being done by the Department of Energy. And three days after 
his appearance right in this very room the Secretary put out a 
memo, and the memo had to do with scientific integrity. And he 
stated in the memo, he laid out a very commendable framework 
for the Department of Energy and specifically he stated the 
Department's mission relies on objective, reliable, accurate, 
and accessible scientific and technical information. The 
Department of Energy is committed to ensuring a culture of 
scientific integrity. And I think we can all agree that that is 
a very laudable goal.
    In November of 2011 the Department of Energy responded to a 
letter from Chairman Issa, and I believe he referenced that 
earlier while he was here, with an explanation of the 
Department of Energy's awareness of the risks associated with 
Cadmium-Telluride. In that letter, as their source, they cited 
Professor Vasilis Fthenackis. Now, my understanding, and I am a 
nurse and I spent most of my professional career in healthcare, 
both with hospitals and as a nurse, my understanding is that 
cadmium is a highly toxic carcinogen and could pose serious 
public health risks if not handled properly.
    So, Mr. Ahearn, my question is for you, at least this first 
question is. Did you or First Solar, or anyone on First Solar's 
behalf, ever pay Professor Fthenackis, or any organization with 
him or that he was affiliated with, for research related to 
Cadmium-Telluride? And that is just a yes or a no, sir.
    Mr. Ahearn. As you have phrased that question, I think the 
answer would be yes.
    Ms. Buerkle. Thank you. Now, on the screen you are going to 
see a slide here from a First Solar PowerPoint presentation 
related to the company's use of Cadmium-Telluride. The 
highlighted portion of the slide states that a risk for First 
Solar is its reliance solely on the research of Professor 
Fthenackis. So my question again to you, Mr. Ahearn, is did you 
or anyone on First Solar's behalf influence or recommend 
specific lines of research by Professor Fthenackis in any 
fashion? And again that is just a yes or no.
    Mr. Ahearn. Well, the answer is no, but I think it is 
incomplete without further explanation, if you would allow me.
    Ms. Buerkle. Sure. Go ahead.
    Mr. Ahearn. So Professor Fthenackis was employed by 
Brookhaven National Laboratory, which is charged by the 
Department of Energy with assessing the environmental health 
and safety aspects of all photovoltaic technologies. Before we 
invested, and even after, in First Solar, Brookhaven and the 
National Renewable Energy Lab conducted their own independent 
assessment of the use of cadmium.
    At some point after that, Vasilis Fthenackis and Brookhaven 
associated with Columbia University and formed a life cycle 
study center, and we contributed money, I am just not sure the 
entity or how it was done, to the Columbia University Center, 
but not with influence on any of their specific programs or 
research.
    Ms. Buerkle. Thank you. Perhaps you could comment, then, 
the risk here on this first slide: We are almost completely 
reliant on Vasilis, and that is Professor Fthenackis, and his 
team. So--go ahead.
    Mr. Ahearn. I think this might relate to the European 
activities. So in the U.S. the independent assessment and 
validation work around cadmium had been done by Brookhaven and 
NREL. In Europe, at one point, there had not been any 
comparable independent government agencies or work done to 
assess Cadmium-Telluride because it hadn't been introduced to 
the market, so we wanted to broaden the scope of research and 
interest the relevant agencies in Europe in conducting these 
kinds of assessments on Cadmium-Telluride. So I believe that is 
what this is referring to.
    Ms. Buerkle. Did you or anyone on First Solar's behalf at 
any time request that this research undertaken by the professor 
be kept confidential or otherwise not disclosed?
    Mr. Ahearn. Not to my knowledge.
    Ms. Buerkle. On the screen you are going to see another 
slide.
    And I see that I am running out of time here, so I will 
make this quick, Mr. Chairman.
    On the screen you are going to see another slide from the 
First Solar presentation, again related to a risk matrix, 
stating successful future studies establish Cadmium-Telluride 
photovoltaic desired outcomes. It sounds to me like you are 
trying to state goals for your company and you are trying to 
really compromise the objectivity of scientific reports, and 
that, of course, is of grave concern to us. Given this evidence 
and this slide, Mr. Ahearn, the Department of Energy's 
dedication to relying on credible and objective information 
seems to have been compromised by your campaign and I just 
would ask whether you agree or disagree with that.
    Mr. Ahearn. I disagree with that. These look like they are 
dated back in 2006, and if you would permit me to explain, I 
think I can explain this.
    Mr. Jordan. Quickly.
    Mr. Ahearn. Okay. So the issue we faced in Europe was what 
will competitors likely do relative to First Solar, because we 
had the lowest cost technology. And our area of vulnerability 
would have been around the use of cadmium. So I think these 
slides are going to how do you anticipate a competitive attack 
and how do you get the scientific community engaged properly to 
get Cadmium-Telluride recognized as a proper technology in 
Europe. So it was back in that earlier time frame.
    Ms. Buerkle. Thank you.
    And I yield back my time.
    Mr. Jordan. I want to thank the gentlelady. I know she has 
to run. I have run too.
    And I promised you guys we would be out by 12 and we are 
actually--I know this is hard to believe--we are going to be 
close. We have two left. Mr. Kelly has agreed to chair for the 
final two questions from our members. Mr. DesJarlais will go 
first, then Mr. Kelly will close out the hearing and get the 
final round.
    I want to thank all our witnesses for being here and for 
making the trip and the sacrifice it takes to come here and 
testify. We appreciate it. I think it has been a very good 
hearing. And as the chairman indicated, we plan to follow up 
with Mr. Chu and get some clarifications to his statements 
under oath back in March. But I want to thank our witnesses.
    With that, I will turn the chair over to Mr. Kelly, and Mr. 
DesJarlais is recognized.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    In the spirit of trying to stay on time, I was listening to 
Mr. Cummings', the Ranking Member's, comments about the 
integrity of the panel sitting here, and really what we are 
here for today is to look into whether or not the taxpayer 
money was spent wisely in this area, in these investments. And 
I guess I might agree that it may not be any of your faults 
that these things didn't go like you wanted, but I would 
question whether or not it is a failure in government, once 
again meddling probably where it doesn't belong, trying to 
invest in the private sector when we have a shining example in 
Mr. Nelson of what the American spirit and free enterprise can 
do if you leave it alone, if the Federal Government would 
simply stay out of the way.
    For all the taxpayers sitting here watching today, I am 
sure that they are not very pleased with the way we, the 
Federal Government, invested their money in this case, and in 
many cases in business. So clearly maybe not shame on you, 
shame on us for not doing our homework better, loaning money in 
areas where clearly the risk was very high. And I guess I would 
wonder, for all you sitting there, if you had to invest all 
that money out of your own pocket, whether you would have taken 
the same path, and that is only a question you can answer.
    But this is the frustration we face here in the Federal 
Government and looking after the taxpayer money, trying to 
reduce this deficit and the spending problem that we have. We 
are asking right now, or a lot of people in Washington are 
asking to take more of the taxpayers' money, and I would 
challenge whether anybody watching this hearing today would 
agree that the Federal Government needs another dime of 
taxpayer money until it can learn to manage it better than what 
we have seen in this hearing today.
    So that is just one man's opinion, but I thank you all for 
joining us today and I yield back.
    Mr. Kelly. [Presiding.] Thank you, doctor.
    Mr. Woolard, some of the questions have been was there any 
political influence that was involved in these loans. Let me go 
to slide number 9.
    [Slide.]
    Mr. Kelly. This is from Manley Shafer from BrightSource to 
Doug Schultz at DOE Loan Program, and it says the team is at 
the White House, in the Vice President's office at 10:00 
tomorrow. So why at the White House and why at the VP meeting 
if it is not politically influenced? Why not just the DOE?
    Mr. Woolard. I believe--I am trying to make sure I have the 
dates accurate--this was in March----
    Mr. Kelly. It is March 8, 2011.
    Mr. Woolard. Yes. So we had--whenever we had correspondence 
on the Hill, we talked to the members of Senate about policy, 
we talked to Carol Browner sometimes, in the Administration, in 
the White House, about broader policy issues.
    Mr. Kelly. Okay. So you can see why--these are your own 
emails, so it comes up as, okay, there is no political 
influence being shown, we are not trying to go that way, but we 
are going to go to the White House, then we are going to meet 
with the Vice President, but this is really just a briefing 
just to keep them abreast of what is going on.
    Mr. Woolard. Well, we met with Lindsay Graham and others as 
well, and we met with----
    Mr. Kelly. Well, I understand that. People come to my 
office everyday too. In fact, Mr. Ahearn's people were in our 
office last week, very nice people, and their concern was the 
respect shown to you folks. And I know this is like getting a 
root canal without Novocaine. I understand that. But it comes 
down to this is taxpayer money, and because of what Mr. 
Mulvaney said--I am a General Motors dealer. General Motors has 
gone through more scrutiny than anybody, and I get told on the 
sales floor all the time I would never buy a guy from you guys 
again because you took the bailout. Well, actually, the 
dealership didn't get it, it went to the corporation; the 
corporation is no longer the corporation; dada dada. But you go 
through all that stuff all the time.
    Mr. Ahearn, I looked at your resume and looked at your 
background. You are pretty astute when it comes to investing, 
there is no question about that. What happened at the end of 
the summer, in August of 2011, that all of a sudden the market 
started to drop, the shares for the company started to just go 
off the cliff?
    Mr. Ahearn. The core issue is that the subsidy programs 
that were creating the market for solar, which are, for the 
most part, in Europe, began to shrink pretty drastically as a 
function of the fiscal problems in Europe and a variety of 
dynamics, and that was coupled with a massive oversupply of 
Chinese panels coming on the market. So basically the market 
space started to dry up, and that really impacted all the 
industry stocks across the board.
    Mr. Kelly. So all of them were tumbling?
    Mr. Ahearn. They are all tumbling, yes.
    Mr. Kelly. And we look at Europe today and we look at--
really, subsidies are driving--they just don't have enough 
money to continue to fund what they have been funding.
    Mr. Ahearn. That is correct.
    Mr. Kelly. Okay. And the same thing really is pretty much 
going to happen here; we are running out of money to do the 
things that we think we should be doing, so you run out of 
capital and there is no infusion.
    Mr. Ahearn. That is right. And that is why I think I agree 
with your overall point that we have to be in markets that are 
not subsidy dependent, and I think we are fortunate we had some 
time and ability to lower our cost, but we need to move, now, 
strongly into markets that do not require these types of 
subsidies, which is what we are doing now.
    Mr. Kelly. Okay. And the energy market--and I know. I am 
from Western Pennsylvania and I know what is going on in 
Western Pennsylvania. Around the rest of the Country, you look 
at all the fossils that are very much abundant and very much 
affordable and very accessible, so we are watching that go 
away. And I know that I probably would have gotten rid of my 
stock then too. Even though you had the loan guarantees coming 
in. You know, usually when you get the loan guarantees, it is 
like, okay, we have the money, we are going to be okay. But if 
you see the market kind of tanking, you say, you know what, it 
is time for me to get the heck out of here; I am going to take 
my marbles and run. So I understand why you did that. That is a 
smart investor.
    Mr. Nelson, one of the Administration's top justifications 
for the 1705 loan program was there just wasn't enough private 
capital. So what do you guys know that nobody else knows? Why 
didn't you go after that low hanging fruit that was out there 
with the government money?
    Mr. Nelson. Well, the bottom line is that I believe in the 
long run it is economics, not government policy, that is going 
to drive widespread adoption of green energy, and our whole 
point of view is to reduce the cost of green energy so it is 
affordable for people, and that is our approach. Ultimately, we 
change the economics and don't rely on government funding.
    Right now we have plenty of private funding to do what we 
need to do and we anticipate that we will come up with a 
product that will actually be competitive and close to grid 
parity so it will be widely demanded, and that people that we 
want to do business with will accept us as a partner.
    Mr. Kelly. Okay. And, again, your background, Mr. Ahearn's 
background, you folks are venture capitalists. You were with 
Bain for a while, so you understand a little bit about 
investing and turning companies around and making them good 
enough.
    Mr. Nelson. My wife would say just a little bit.
    Mr. Kelly. Just a little bit. Well, you know what? I am 
interested in that because, really, there is an old saying out 
there: if it not market ready, no amount of subsidy will affect 
it; and if it is market ready, it doesn't need subsidize at 
all.
    Mr. Nelson. Well, that is the bottom line. We have talked a 
lot about innovation. Mr. Cummings talked articulately about 
innovation. The fact is that funding innovation is a really 
important part of the government's function in this. But that 
is different than the loan guarantee program; that funds 
commercialization. And commercialization should be a private 
function and it should happen with good projects. When you have 
a project that isn't economically viable or which costs 
substantially more than economic alternatives, no amount of 
government subsidy will ever bring that into widespread 
adoption.
    Mr. Kelly. Probably not a good investment.
    Mr. Nelson. That is my feeling.
    Mr. Kelly. Okay. I wonder, because I am looking at JPMorgan 
Chase and I see the DOJ is going to do an investigation because 
they had a $2 billion loss; $20 billion profit. And the people 
that we really come down on them is people who run $16 trillion 
in the red, that make investments everyday, that if the 
shareholders in that company, which is the American taxpayers, 
they should be demanding also a look into what in the world are 
we doing with this money and where are we investing it, and at 
the end of the day what do we come up with.
    So I think we are done for the day.
    I want to thank you sincerely. And I know how difficult it 
is, but Mick made a good point: you can't follow this trend and 
then be upset because people hold you responsible for it. I 
want you to understand I have deep respect for what you do. I 
have done--my own life has been very much through hard work and 
sweat equity and everything else, a lot of skin in the game. So 
I understand. I know it is difficult. But when that money is 
put out there and they dangle that carrot in front of you, 
sometimes it is a Judas goat that you probably shouldn't follow 
because it really does come down hard on you.
    I appreciate your comments, Mr. Nelson. I read your 
background. I know exactly what works, what doesn't work, and I 
do agree. This is science that sometimes is just way ahead of 
the market. It is not economically viable right now. There will 
be a time sometime in the future, but maybe right now is not 
the right time. We haven't had a really positive ROI on it.
    So, with that, this hearing is now adjourned.
    [Whereupon, at 12:01 p.m., the subcommittee was adjourned.]






                                 
