The Biden administration is giving $6.6 billion to a semiconductor project run by the former CEO of Solyndra, the failed solar energy company at the center of an Obama-era scandal over government misspending.
Taiwanese chipmaker TSMC’s Arizona subsidiary, whose president is former Solyndra head Brian Harrison, will receive $6.6 billion to build a factory in Phoenix, Secretary of Commerce Gina Raimondo announced Monday.
Harrison was CEO of Solyndra when it declared bankruptcy in 2011 after receiving over $500 million in loans from the Obama administration.
The funding could fuel criticism from Republicans over the Biden administration’s energy spending. The Department of Energy’s loan office has poured billions into companies with an array of financial and legal problems, leading to investigations by GOP lawmakers.
President Joe Biden touted the funding to TSMC in a press statement on Monday. The company said it will invest an additional $65 million into its manufacturing compound in Arizona, where it already has two factories and is building a third.
"Thanks to this investment, TSMC will also build a third chip factory in Phoenix, increasing its total investment in Arizona to $65 million and creating over 25,000 direct construction and manufacturing jobs, along with thousands of indirect jobs," Biden said.
The funding comes from the CHIPS and Science Act, which was signed by Biden in 2022 and is intended to boost U.S. chip manufacturing and counter China’s dominance of the semiconductor industry.
Harrison, who is overseeing TSMC’s projects in Arizona, said he was involved in securing the federal financing in a media interview last August.
"We’re in the process of applications for the CHIPS Act funding," he told CNBC.
Harrison joined TSMC Arizona in 2021 and has served as president since last April, according to his LinkedIn profile. He was CEO of Solyndra from 2010 to 2011.
Solyndra received over $500 million in loans from the Obama administration under a 2009 stimulus program. During Harrison’s tenure, the company declared bankruptcy and defaulted on the loans. Federal investigators also reportedly seized Solyndra records from Harrison in 2011, but no charges were ever brought against him or other executives at the company.
An inspector general investigation found that Solyndra executives provided misleading information to Department of Energy officials during the loan negotiations in 2009 and later "while drawing down loan proceeds." The IG report said the "actions of certain Solyndra officials were, at best, reckless and irresponsible or, at worst, an orchestrated effort to knowingly and intentionally deceive and mislead the Department."
Republicans held up Solyndra as an example of reckless government spending. In 2012, GOP presidential candidate Mitt Romney held a press conference outside the company’s headquarters, calling it a "symbol" of "failure."
In the wake of the scandal, the Obama administration scaled down the operations of the Department of Energy’s loan programs office, which had issued the funding.
But now the Biden administration has revived and expanded the office—giving it a massive $400 billion budget for green energy loans.
The spending has come under fire from Republicans, who have noted that the loan office’s director, Jigar Shah, appears to have conflicts of interest with some of the loan recipients.
"Solyndra is going to look like chump change compared to the amount of money that’s been wasted by this administration," Sen. John Barrasso (R., Wyo.) warned in December.
The Department of Commerce did not respond to a request for comment.