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Obama energy officials funded solar firms despite ‘junk bond’ ratings from S&P, Fitch

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With oil pump jacks as a backdrop, President Barack Obama speaks at an oil and gas field on federal lands Wednesday, March 21, 2012, in Maljamar, N.M. (AP Photo/Ross D. Franklin)By Gene J. Koprowski

The U.S. Department of Energy backed hundreds of millions of dollars in loans for discredited solar power start-ups whose corporate debt was already sullied with “junk” ratings by Standard & Poor’s and Fitch Ratings, two of the world’s leading credit agencies, a federal government investigation has shown.

Despite the finding, Energy Secretary Steven Chu vigorously defended the ethics of his agency in a hearing last week held by House Oversight Committee Chairman Rep. Darrell Issa.

Details are emerging this week about the Energy Department’s practices that indicate the agency spent a disproportionate amount of funding on these tainted solar power projects.

Congressional aides interviewed personnel at Fitch and S&P, and officials inside Obama’s Energy Department, as part of their investigation.

A company called Solopower was cited in a “dire” warning by S&P, which accurately forecast that the firm would “fail to meet its debt obligations.” Nonetheless, it received $170 million in federal funding guarantees, investigators told The Daily Caller.

Another company, Abound Solar, was approved for a $400 million loan guarantee by Obama officials, investigators said. Fitch Ratings, however, had earlier assigned a “junk credit” rating to Abound. Fitch deemed the firm “highly speculative” and “lagging in technology” behind its competitors.

It was also rated less creditworthy than Solyndra, another infamous administration solar power investment, which caused scandal for the White House last year when it declared bankruptcy.

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