(Image source: Politico)

BY ZACH TOOMBS

The Solyndra solar panel company has caused nothing but headaches for the Obama Administration. The Department of Energy loaned the company $535 million in February as an investment. But after Solyndra filed for bankruptcy last month - the scandal could lead to a criminal investigation. CNN reports.

“New emails show that there was a major rift between the Treasury Department and the Department of Energy over the solar panel company. The Department of Energy restructured Solyndra’s $535 million loan earlier this year and, in that deal, it allowed that, in the event of a bankruptcy, the investors, not the taxpayers would be paid first. But officials at the Treasury Department had major concerns that this might be against the law.”

Those emails, released by the White House late Friday, show that the Treasury Department had warned the Energy Department it could be overstepping its authority. Treasury official Gary Burner told Energy officials just that in an email in February. Politico has it.

"Unless DOE has other authorities, these adjustments may require approval of the Department of Justice. Let me know if you need the name of a contact at DOJ.”
An Energy official pushed back in a reply, saying:
““I believe there is a gross misunderstanding of the outcome of the negotiated restructuring of the Solyndra obligation to DOE.”

David Frantz, the director of Energy’s Loan Guarantee Office, also chimed in about the Treasury’s warning, saying he thought it was “just a heads up.” But Treasury official Mary Miller says the warning was purely serious.

In an email obtained by the National Journal that Miller had sent to the Congressional Budget Office in August, she said this: 

“(The DOE regulations state that DOE) shall consult with the Budget Office and Treasury before any ‘deviation’ is granted from the financial terms of the Loan Guarantee Agreement... In February, we requested in writing that DOE seek the Department of Justice’s approval of any proposed restructuring. To our knowledge that has never happened.”

Since the scandal surfaced, Fox News reports the White House has stuck to its argument that the Solyndra loan was merely an investment, meant to spark economic growth.

FOX: "Mr. Obama told reporters in a news conference last week the U.S. must compete with China’s $30 billion is subsidies and some of the companies we back are going to fail."

OBAMA: "We’re going to have to keep on pushing hard to make sure the manufacturing is located here, new businesses are located here and new technologies are developed here."

Still, signs that the Energy Department brushed off those warnings from Treasury has Republican Rep. Tim Murphy of the Energy and Commerce Committee wondering why protocol was ignored.

“But when it’s taxpayers’ money, you can’t bypass the system of checks and balances. What we have to find out from Treasury on Friday is were they sending signals over to Energy and saying there were some serious problems here. Did Energy know it? Did Energy ignore those things? Why did the Department of Energy move forward?”

That subcommittee hearing will come Friday. But, according to Fox News, it won’t feature Energy Secretary Steven Chu, which means we’ll probably see more Solyndra hearings to come.