ampaign Desk — December 9, 2008 03:59 PM
Don’t Leave the Energy Department Out of It
Tell readers where the auto bailout money will come from
By Jane Kim
Have you heard about the Advanced Technology Vehicles Manufacturing Loan Program? It’s a recently created Department of Energy loan program that provides funds to companies for the development of fuel-efficient vehicles. It’s also the pot of money from which the automakers, should the rescue bill for the auto industry pass a congressional vote, will receive their $15 billion in emergency bridge loans.
You wouldn’t know it from reading today’s NYT article about the auto bailout, which doesn’t say where the funds, should they be made available, will originate from:
The president’s designee would disburse the short-term emergency loans to General Motors and Chrysler, which are at risk of financial collapse, and would directly supervise the reorganization plans that the auto manufacturers have agreed to carry out in exchange for government aid.After a long weekend of drafting the auto bailout plan, Congressional Democrats on Monday afternoon delivered their draft bill to the White House, where senior officials quickly raised a number of concerns. The White House press secretary, Dana M. Perino, said Mr. Bush would insist on aiding only those automakers that can survive long term.
What the Times article doesn’t mention is that, in order to sell the White House on the plan, the Democrats agreed to pull the funds from the pre-existing DOE loan program (authorized in November under the Energy Independence and Security Act of 2007), and not from the $700 billion designated for the Troubled Assets Relief Program (TARP), the Democrats’ preferred funding source.
It’s information that has been reported throughout these negotiations. (This earlier NYT article, for one, both addresses the decision to take the money from the DOE loan program (a compromise that sought to “end a weeks-long stalemate” between Bush and Pelosi) and notes the lingering concern of how the program’s funds will be restored. But this is information that should be included in any story about the auto bailout, and today’s story is no different. (And it’s ultimately irresponsible to assume that readers of today’s newspapers also read Saturday’s paper, which reported the compromise.)
The Washington Post, for one, succinctly works in the information: “Democrats bent to the will of the president on several key demands, most notably in agreeing that the emergency funding would be drawn from an existing loan program aimed at promoting fuel-efficient technologies.” It’s a single line, but it provides context, and brings the reader up to speed.
Stephen M. Davidoff at the NYT’s Dealbook blog comes out and says it perhaps most clearly:
The first auto bailout bill – introduced mid-November and which drew on TARP funding – has been abandoned.As the New York Times reported Monday, there is a new compromise bill circulating, this version drawing financing from the Energy Independence and Security Act of 2007. Congress recently appropriated $25 billion to be loaned under that bill to the automakers to build more energy efficient and environmentally sound automobiles.
The latest bill is entitled the Auto Industry Financing and Restructuring Act and it takes that $25 billion funding and simply loans it to the automakers without the environmental or energy efficiency conditions.
That’s clear language, some of which the straight news report could have adopted. Along the same lines, Ed O’Keefe at The Washington Post provides more details on the program, which is run through the Energy Department’s Office of the Chief Financial Officer:
The loan program already has received nine loan applications, DOE press secretary Healy Baumgardner said in an e-mail statement Monday night. Energy continues to carry out the program, Baumgardner says “unless and until Congress takes action which revises the DOE program in such a way as to require DOE to revisit the current regulatory scheme and/or the way it is being implemented.”
O’Keefe cites Speaker Nancy Pelosi, who yesterday spouted reassurances that this redirection of funds wouldn’t affect other applicants to the DOE loan program just because some of that money is being used for emergency loans, and that the program’s funding would be replenished. Still, he ends his post with questions: “Will DOE get its money back and when? How much money will other loan applicants receive?”
Those are questions for the future, but they also represent the other side of today’s top auto bailout story, which makes them important to keep in mind—even if talk of who will be the new “car czar” is more titillating as speculative news.
When the head attorney at DOE came under investigation, they had to get a new one, want a job? Apply here:
Job Title:Attorney-Adviser (General)
Department:Department Of Energy
Job Announcement Number:GC-12-0003
SALARY RANGE: $123,758.00 to $155,500.00 / Per Year
OPEN PERIOD: Friday, June 22, 2012 to Friday, July 13, 2012
SERIES & GRADE: GS-0905-15
POSITION INFORMATION: Full-Time – Permanent
DUTY LOCATIONS: 1 vacancy(s) in the following locations:
Washington DC Metro Area, DC, US
WHO MAY BE CONSIDERED: OPEN TO ALL U.S. CITIZENS
DOE’s overarching mission is to advance the national, economic, and energy security of the U.S. through scientific and technological innovation and the environmental clean up of the national nuclear weapons complex. With DOE you’ll have the flexibility and freedom to explore a world of possibilities through a wealth of exciting and challenging career opportunities. By joining DOE, you can hone your career skills while helping to secure the U.S. future and make a real difference in the lives of Americans and people around the world. To learn more about the DOE, please visit our website at the following link DOE
The Department of Energy (DOE) Loan Programs Office (LPO) is recruiting for a finance attorney(s) with experience in project and/or corporate finance, as well as workout, restructuring and bankruptcy experience to provide legal support, advice, and counsel for its innovative energy technology loan guarantee program and the advanced technology vehicle manufacturing direct loan program.
The attorney will provide advice and assistance on matters related to the monitoring of its loan and loan guarantee portfolio, particularly in connection with workouts and restructurings. The attorney may also provide legal advice in the negotiation and closing of federal loans and loan guarantees for large-scale, highly complex technology projects. In many cases, these innovative projects will be funded using project finance or other sophisticated finance techniques.
The DOE loan programs are authorized under Title XVII of the Energy Policy Act of 2005, as amended, to support projects that “avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases” and “employ new or significantly improved technologies,” as well as Section 136 of the Energy Independence and Security Act of 2007, which supports the development of advanced technology vehicles and associated components.
•U.S. Citizenship is required.
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1.As a senior legal advisor, the incumbent will assist project teams in: (i) structuring, due diligence, drafting, negotiation, and closing of complex federal loans and loan guarantees for large-scale, complex energy projects; and (ii) monitoring of energy-related loan and loan-guarantee transactions, including associated work-outs and restructurings, as may be necessary. The incumbent will direct outside counsel and coordinate with them on these transactions.
2.As a senior legal advisor, provide analyses, advice, guidance and assistance on issues and questions of exceptional difficulty that have a crucial influence on LPO activities. Provide interpretations, legal advice, determinations, and opinions on a wide range of extraordinary, novel, controversial, and complex issues and questions involving the application of advanced legal theories, concepts, principles, and processes of law and procedure.
3.As a senior legal advisor, provide analyses and assistance on legal, policy, and factual issues involving direct loan programs and loan guarantee programs. Interpret and advise on Title XVII of the Energy Policy Act of 2005, Section 136 of the Energy Independence and Security Act of 2007, other relevant loan and loan guarantee programs, and statutory and regulatory requirements of general applicability to federal credit programs.
4.Prepare reports on basic laws of broad scope and impact, recommend amendments to existing laws, draft proposed legislation, and review and comment on legislation proposed by Members of Congress and other agencies.
5.Represent the LPO in meetings with applicants and borrowers, officials of other Federal, state and local government agencies, industry groups, and Members and committees of Congress.
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You must have at least seven years of specialized experience that has given you the particular knowledge, skills, and abilities required to successfully perform the duties of this job. Typically, DOE would find this experience in work within this field or a field that is closely related at a top-tier full service law firm.
You must be a U.S. citizen to qualify for this position.
You must be a graduate of a law school accredited by the American Bar Association and be a member in good standing of a state, territory of the United States, District of Columbia, or Commonwealth of Puerto Rico bar.
CONDITIONS OF EMPLOYMENT FOR THIS VACANCY: A preliminary background investigation must be completed before a new employee can begin work. Current Federal employees or other individuals with an existing completed background investigation may not be required to undergo another background investigation. If selected for this vacancy, you will be required to file the OGE Form 450 (Confidential Financial Disclosure Statement).
HOW YOU WILL BE EVALUATED:
You will be evaluated to determine if you meet the minimum qualifications required; and on the extent to which your application shows that you possess the knowledge, skills, and abilities associated with this position as defined below.
1. The LPO is looking for a senior attorney(s) with at least seven years of finance experience on large, complex projects at a top-tier full service law firm. Experience with energy related projects and federal government loan and loan guarantees is a strong plus, but is not mandatory. In particular, responding applicants should have experience negotiating and drafting documents necessary to implement complex loan and loan guarantee transactions (including restructurings).
2. General experience in the preparation of legal memoranda, opinions, and other legal documents providing legal advice on the legal form and effect of regulations, rules, orders, briefs, and other legal documents, and participation in the final preparation of such documents.
To preview questions please click here.
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The Department of Energy has a broad range of benefits and work life programs that you may be eligible for depending on your type of appointment. For more information on benefits DOE has to offer please visit: DOE BENEFITS
Relocation expenses will not be provided.
This is an excepted service position where appointees must serve a one year trial period. Male applicants born after 12/31/1959, who are required to register with the Selective Service under section 3 of the Military Selective Service Act, must be registered (or must have registered at the time they were required to do so) in order to be eligible for appointment. For more information, visit the SELECTIVE SERVICE SYSTEM web site.
The U.S. Department of Energy is an EQUAL OPPORTUNITY EMPLOYER.
HOW TO APPLY:
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YOU MUST APPLY VIA E-MAIL – DO NOT CLICK THE APPLY NOW BUTTON!
Please submit your application to Deborah Dawson at GCemail@example.com
A complete application should include a cover letter and a current resume with references. Please submit a narrative response to each knowledge, skill and ability listed.
Required Documents: You must have a bar membership and professional law degree. You do not need to provide official documentation at the time of application; official proof of bar membership and law degree will be requested if selected.
RESUME and all required supplemental documents in order to be considered.
•Veterans: There is no formal rating system for applying veterans’ preference to attorney appointments in the excepted service; however, the Department of Energy considers veterans’ preference eligibility as a positive factor in attorney hiring. Applicants eligible for veterans’ preference must include that information in their resume and attach supporting documentation (e.g., the DD 214, Certificate of Release or Discharge from Active Duty and other supporting documentation) to their online application. If applicant is eligible to claim a 10-point preference, the applicant must also submit an SF-15 and any other proof that the applicant is eligible for a 10-point preference. If you are currently on active duty, you must submit an official statement of service from your command or other official documentation that proves your military service was performed under honorable conditions. You can find additional information on veteran’s preference at VET GUIDE
•EDUCATION: YOU MUST SUBMIT A COPY OF YOUR LAW DEGREE TRANSCRIPT(S), a separate course listing showing the type of information that appears on transcript(s)such as course title, department, hours earned (semester or quarter), and grade.
AGENCY CONTACT INFO:
Department of Energy
Department of Energy Loan Programs Office
1000 Independence Avenue, SW
WHAT TO EXPECT NEXT:
Once completed applications are received an evaluation will be performed and the most qualified candidates will be referred to the selecting official for further consideration and possible interview. A selection is expected to be made within 60 days. Notification to non-selected candidates is optional, but not expected.
Report: DOE not following its own standards in
By Gregory Korte, USA TODAY
WASHINGTON – The
Department of Energy’s standards for loan guarantees — like the
$535 million it put up to back the now-bankrupt Solyndra LLC — are as high or higher
than any in the private sector, a government watchdog reported Monday. The problem, the Government Accountability Office said,
is that the DOE may not be following its own standards.
And missing or incomplete steps in the review process
could lead the department to make riskier loans than it
The non-partisan congressional investigative agency said
Energy Department “skipped applicable review steps”
and that poor documentation leaves DOE “open to
criticism that it exposed taxpayers to unacceptable
USA TODAY review uncovers support for energy
“This report underscores the principle that you can’t
manage what you can’t measure,” said Sen.
R-Okla., in a statement. “It will be difficult for the
administration and Congress to tell taxpayers they have
gotten a good deal when DOE can’t document how loans
Coburn and Sen.
John McCain, R-Ariz., introduced a bill
last year that would prohibit loan guarantees that don’t
give the government first position in financing.
“While we appreciate the GAO’s report,” Energy
Department spokesman Damien LaVera said in an e-mail,
the report did not address “the merits and
creditworthiness” of any specific loan guarantee. He said the department is deploying an
improved management system.
The loan guarantee program, first established by Congress in 2005, has come under fire
from Republicans after solar panel maker Solyndra ran into financial trouble.
White House documents turned over to congressional investigators show the
announcement of the loan guarantee was rushed to coincide with Vice President Biden’s
appearance at a company groundbreaking.
But GOP members of Congress, too, have urged the department to approve loan
guarantees for projects in their districts — notably a $2 billion loan guarantee, still
pending, for USEC Inc.’s American Centrifuge Project. In all, GAO says, the Energy Department has guaranteed $15.1 billion in loans and has
committed to another $15 billion.
In a letter to the GAO, a DOE official said its findings might have been valid in 2009 or
2010, but that it’s wrong to say that “oversight was in any way ineffective.”
The program “succeeded in making an unprecedented level of clean energy investments
while maintaining standards that are as high or higher than major financial institutions,”
wrote David Frantz, the acting director of the program.
But the author of the GAO report, Frank Rusco, noted that the DOE didn’t update its
manual until last October — the month after Solyndra declared bankruptcy — and that
some applications were still missing documentation as late as February.
Opinion: The problems with the DOE green car
Katie Fehrenbacher Mar. 8, 2012, 12:26pm PT
Over the past year I’ve seen a recurring scenario with
the Department of Energy’s green car loans, and it’s not a pretty sight. Here’s the picture: a young, sometimes promising — sometimes not promising — electric car or alternative vehicle startup moves to
the late stages of the DOE’s green car loan award process. The startup seems to be so sure they will get
the loan that they manage their business around it, and then the DOE either places the company in
award purgatory — a permanent holding pattern — or ends up denying the loan. A lot of times, the
result of this situation has been that a company closes shop or desperately struggles to look for other
sources of funding.
Over the past couple of years, this type of scenario has happened for electric car maker Think
Automotive’s U.S. arm (which went bankrupt), electric car company Coda Automotive, Aptera (
shut down), plug-in hybrid van maker Bright Automotive (which shut down) and energy-efficient
plastic car company Next Autoworks (formerly V-Vehicle, which shuttered its planned factory).
Electric vehicle maker Fisker Automotive was awarded a loan, but was only able to draw down part of
the loan after its first car was delayed significantly The latest example of this situation is when diesel car
Carbon Motors was denied a $310 million DOE loan this week. Carbon Motors was
more vocal in its unhappiness with the process than most of the other companies. Carbon Motors CEO
William Santana Li said in a statement:
We are outraged by the actions of the DOE and it is clear that this was a political decision
in a highly-charged, election year environment.
Santana writes that the companies that engaged in the DOE green car loan process have “been caught
for several years in a costly and extensive DOE due diligence process. Carbon Motors simply appears
to be the last victim of this political gamesmanship.” Santana points to GM, Chrysler, Next Auto,
Aptera, Bright Automotive and Carbon Motors as examples of companies that have “suffered through
the horrendous DOE process.”
Bright Automotive was also pretty vocal about its unhappiness with the DOE loan process. Bright,
which was developing its business around getting a $450 million loan from the DOE,
sent a letter to the
media last month slamming the DOE for leading it down a road where it spent three years and $15
million on pursuing a loan that was never delivered.
Why is this happening?
Created under Section 136 of the Energy Independence
and Security Act of 2007, the DOE’s Advanced Technology Vehicles Manufacturing program, or
ATVM (which I’m calling the green car loans), holds authority to award up to $25 billion in direct
loans. Projects can include re-equipping or expanding existing manufacturing facilities, establishing
new plants in the U.S. or dealing with the engineering integration associated with these types of
projects. Under the program rules, ATVM-funded vehicle projects from new companies have to deliver
fuel economy improvements of at least 25 percent compared to the average for that vehicle class in
By 2010 the ATVM program had finalized more than $2 billion in loan agreements for three car
companies and awarded a nearly $50 million conditional loan commitment to one more. The DOE
awarded loans to electric car startup Tesla Motors, Ford and Nissan North America in its first round of
awards (on a conditional basis), back in June 2009. Plug-in hybrid vehicle developer Fisker Automotive
scored a $528.7 million conditional commitment in September 2009. But in the follow year and a half,
while the program had much more money to allocate, the DOE has mostly held off on awarding the rest
of the ATVM loans save for a few small loans to companies.
By 2011 it became clear that the DOE had to be
cautious about offering loans to risky green car and clean energy companies. The infamous bankruptcy
of Solyndra, one of the DOE’s first loans from another green program, was a major political firestorm
for the Obama administration and is still being mentioned in campaign ads in this election year. Battery
company Ener1 received a $118 million grant from a different DOE battery program in the
2009 and declared bankruptcy this year. Flywheel maker Beacon Power also received a loan guarantee
and declared bankruptcy (though it was able to pay off its loan and was bought by a private equity firm
recently). Directly out of the ATVM program, the DOE decided to halt the allocation of the bulk of
Fisker Automotive’s loan after its first car was delayed.
As a result of some of these companies’ struggles, it seems clear that the DOE pulled back from
awarding and finalizing the result of the loans from the ATVM program. But about a dozen of these
companies still got caught up in the mix.
So there are a few problems, as I see it, with this program and the events over the past couple of years:
1. Miscommunications: The DOE doesn’t seem to have communicated clearly with the green car
startups about their realistic chances of actually getting a loan from the program. Particularly for the
companies that made it to the end stages of receiving the awards. The former loan chief Jonathan Silver
said (before he resigned) several times that there were more companies that received DOE conditional
loan commitments than there were companies that would receive the finalized loan. But still there have
been almost a half dozen companies that seem utterly shocked when the loan doesn’t actually go
through, and end up closing shop and laying people off.
2. #WhatdoyoumeanIdontgetaloan!: The startups needed to be more realistic when working with the
DOE and knowing how the DOE works. Of course the DOE makes moves based on politics in the
run-up to an election year. Companies need a plan B on funding, and should also pay to work with
execs experienced with working with public-private partnerships. Some of the companies do have plan
B’s — such as Coda and Fisker — and are still around today.
3. Early due diligence could have been better: It seems as though the DOE made some awards at the
beginning of the ATVM loan process that weren’t really that great. Electric car maker Fisker
Automotive is a really interesting company with a gorgeous car, but I don’t think they were in a good
position to receive that sizable loan so far in advance of their first car being produced (almost two
years). The DOE seems to have learned to be more cautious a while later, but by then it already had a
bunch of loans for eager startups in its queue.
4. The whole premise of the program?: Should green car startups be in the position to receive such
sizable loans from the DOE? Well, look at the sole green car startup that seems to be doing well with its
loan: Tesla Motors. Does Tesla’s success justify including startups in the program? Yeah, maybe. What
do you think?
DOWN BRIGHTS CONDEMNATION ON DOE LIES:
February 28, 2012
Secretary Steven Chu
U.S. Department of Energy
Dear Secretary Chu,
Today Bright Automotive, Inc will withdraw its application for a loan under the ATVM program
administered by your department. Bright has not been explicitly rejected by the DOE; rather,
we have been forced to say “uncle”. As a result, we are winding down our operations.
Last week we received the fourth “near final” Conditional Commitment Letter since September
2010. Each new letter arrived with more onerous terms than the last. The first three were
workable for us, but the last was so outlandish that most rational and objective persons would
likely conclude that your team was negotiating in bad faith. We hope that as their Secretary,
this was not at your urging.
The actions – or better said “lack of action” — by your team means hundreds of great
manufacturing and technical jobs, union and non-union alike, and thousands of indirect jobs in
Indiana and Michigan will not see the light of day. It means our product, the Bright IDEA plug-in
hybrid electric commercial vehicle, will not provide the lowest total cost of ownership for our
commercial and government fleet customers, saving millions of barrels of oil each year. It
means turning your back on a bona fide step forward in our national goal to wean America
away from our addiction to foreign oil and its implications on national security and our
In good faith we entered the ATVM process, approved under President Bush with bi-partisan
Congressional approval, in December of 2008. At that time, our application was deemed
“substantially complete.” As of today, we have been in the “due diligence” process for more
than 1175 days. That is a record for which no one can be proud.
We were told by the DOE in August of 2010 that Bright would get the ATVM loan “within
weeks, not months” after we formed a strategic partnership with General Motors as the DOE
had urged us to do. We lined up and agreed to private capital commitments exceeding $200M
– a far greater percentage than previous DOE loan applicants. Finally, we signed definitive
agreements with state-of-the-art manufacturer AM General that would have employed more
than 400 union workers in Indiana in a facility that recently laid-off 350 workers. Each time
your team asked for another new requirement, we delivered with speed and excellence.
Then, we waited and waited; staying in this process for as long as we could after repeated, yet
unmet promises by government bureaucrats. We continued to play by the rules, even as you
and your team were changing those rules constantly – seemingly on a whim.
Because of ATVM’s distortion of U.S. private equity markets, the only opportunities for 100
percent private equity markets are abroad. We made it clear we were an American company,
with American workers developing advanced, deliverable and clean American technology. We
unfortunately did not aggressively pursue an alternative funding path in China as early as we
would have liked based on our understanding of where we were in the DOE process. I guess we
have only ourselves to blame for having faith in the words and promises of our government
The Chairman of a Fortune 10 company told your former deputy, Jonathan Silver, that this
program “lacked integrity”; that is, it did not have a consistent process and rules against which
private enterprises could rationally evaluate their chances and intelligently allocate time and
resources against that process. There can be no greater failing of government than to not have
integrity when dealing with its taxpaying citizens.
It does not give us any solace that we are not alone in the debacle of the ATVM process. ATVM
has executed under $50 million of transactions since October of 2009. Going back to the
creation of the program, only about $8 billion of the approved $25 billion has been invested. In
the meantime, countless hours, efforts and millions of dollars have been put forth by a
multitude of strong entrepreneurial teams and some of the largest players in the industry to
advance your articulated goal of advancing the technical strength and clean energy
breakthroughs of the American automotive industry. These collective efforts have been in vain
as the program failed to finance both large existing companies and younger emerging ones
Our vehicle would have been critical to meet President Obama’s stated goal of one million plugin
For us, this is a particularly sad day for our employees and their families, as well as the
employees and families of our partners. We asked our team members on countless occasions
to work literally around the clock whenever yet another new DOE requirement came down the
pike, so that we could respond swiftly and accurately. And, we always did.
Reuben Munger Mike Donoughe
Grassley, Thune: Energy Department’s electric car loan caters to the 1 percent
Two Republican senators are bashing the Energy Department for using taxpayer funds to support production of a luxury electric car that costs six figures.
Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) are the latest GOP lawmakers to raise questions about federal support for Fisker Automotive.
The company in 2010 won approval for up to $529 million in Energy Department (DOE) loans for two projects.
The smaller portion, $169 million, supported U.S. engineering and design work for the roughly $100,000 Fisker Karma, which is manufactured in Finland.
In a letter to Energy Secretary Steven Chu released Monday, the senators question whether a 2007 energy law that created the loan program for advanced vehicle manufacturing should support such a pricey ride.“The statute which created the [Advanced Technology Vehicles Manufacturing (ATVM)] program did not specify a retail price range for vehicles that are financed by federal dollars, but it would seem questionable how financing $100,000 luxury class automobiles would be the best use of taxpayer money,” the senators write in the letter, which is available here.
The second, larger portion of the funding was to support a project to build a separate and less costly plug-in vehicle, now called the Atlantic, at a former GM plant in Delaware, a plan slated to employ 2,500 people.
That car will retail for around $50,000, but the Delaware project has been delayed and faces uncertainties, and the company has not drawn all of the funding.
The company must meet more “milestones” to draw more of the money, according to DOE. The company has drawn $193 million of the DOE loan funding thus far, according to press reports.
The Grassley-Thune letter to Chu questions the portion of the funding that supported the overseas manufacture of the Karma model, even though the money was used for U.S.-based work.
It also asks a series of other questions about the funding for the two Fisker projects, such as what “technical expertise” the Energy Department brought to bear in evaluating, granting and monitoring the loan to Fisker.
A DOE spokesman did not provide immediate comment on the GOP senators’ April 20 letter.
But the department’s public affairs chief, in a blog post last October, defended the Fisker financing despite delays in the Delaware project, as well as the $465 million loan for Tesla Motors, a California-based manufacturer of high-performance and costly electric vehicles.
Dan Leistikow, the DOE official, struck back. “Critics have complained that the first vehicles introduced by Fisker and Tesla are more expensive, high-end vehicles.”
“This complaint misses the mark in several respects. First, both manufacturers plan to start with high end vehicles and then quickly move to more affordable product lines,” Leistikow wrote in October.
“These are start-up companies that intend to grow over time, so they are following a common pattern for emerging companies: starting with a premium product for a smaller customer base, and eventually moving to lower cost, mass marketed products as they gradually scale up operations,” he added.
Leistikow also noted that other loans under the ATVM program have supported less expensive vehicles. Ford and Nissan have received the largest loans under the ATVM program.
But Grassley, in a statement, questioned the DOE support for Fisker.
“It’s important to know what went into the Energy Department’s decision to fund the production of expensive luxury vehicles. The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny. The taxpayers can’t and shouldn’t have to subsidize these decisions,” he said in a statement Monday.
Busting Open Energy’s Den of Deception
Benghazi isn’t the only White House cover up being exposed through leaked emails. State Department staffers aren’t the only career officials being blamed for President Obama’s inexperience, questionable judgment, and obvious cover up. A similar saga has just been exposed in the latest chapter of the green-energy crony-corruption scandal.
On October 30, The Daily Caller ran a feature titled: As many as fifty Obama backed green energy companies bankrupt or troubled. The piece cited the work Christine Lakatos and I did in our three-part “green-energy failures” series released in October. Immensely popular, the DC article was picked up by numerous sites, including Fox Nation and GOPUSA. That night, Newt Gingrich was on Fox News’ On the Record with Greta Van Sustren. After discussing the incriminating Benghazi emails, he pointed to another possible “October surprise.”
Gingrich teased: “The other big story, I think, that is going to break, is on corruption and extraordinary waste in the solar-power grants and direct involvement by the Obama White House, including the President, in the solar-panel grants involving billions of dollars, and I suspect that’s going to break Wednesday and Thursday of this week.”
His sources were dead on. The next day, Wednesday, October 31, at 1:30PM ET, we received a tip regarding the House Committee on Oversight and Government Reform’s release of more than 150 mails, equaling hundreds of pages of convicting evidence, accompanied by a five-page “Memorandum” with the following subject line: “Update on Committee’s Oversight of the DOE Loan Guarantee Program: New Emails Show President Obama, Senior Administration Officials Misled American People about Role of President and White House in Program.”
Through the research and writing we’ve done, Lakatos and I were confident that there was direct involvement, after all, of the 26 loans (of which the majority of the companies that received them were junk-rated) issued through just the 1705 Loan Guarantee Program to 21 firms, virtually all of them had meaningful political ties (bundlers, donors, supporters, etc.,) to the White House and other high-ranking Democrats. Despite the obvious connection, President Obama has repeatedly denied any involvement. As it has done with Benghazi-gate, the White House, this time through Senior Advisor David Plouffe, while on Meet the Press (October 30, 2011), shuns responsibility for something politically uncomfortable: “decisions about the loan program were made by career officials in the Department of Energy on the merits.”
Likewise, Secretary of Energy Steven Chu, while testifying before the House Energy and Commerce Committee in November of 2011, stuck to the talking points when, referencing the Solyndra debacle, under oath, he said: “I am aware of no communication from the White House to the Department of Energy saying to make the loan or to restructure.” More recently, March 2012, before the House Oversight Committee, Chu claimed: “we looked at the loans on their own merits.” At that same hearing, Rep. Jim Jordan (R-OH), pressed Secretary Chu on nine of the firms that received loans, revealing their political connections. Chu countered that the loans were based on “merit.” Yet Jordan was perplexed, “so if you weren’t helping your buddies, and you were basing your decisions on the merits of the loan, how do you explain the fact that 23 of 27 recipients of the loan guarantees were rated as junk status investments?” Jordan concluded, “If it wasn’t your political buddies, it had to be incompetence.”
Also under oath, in the July 18, 2012, Oversight Hearing specifically addressing Abound Solar (now bankrupt and under investigation for securities fraud, consumer fraud and financial misrepresentation), former Executive Director of the Loan Program Office (LPO), Jonathan Silver stated, “Because I am no longer at the department, I do not have access to the analysis done for the Abound project. As a result, I cannot comment in detail about the transaction, but what I can do however, is give you a flavor for what we try to do on this, and every project…The loan would have gone through multiple reviews independent of the loan program’s office, including detailed reviews by career credit professionals at DOE, and career staff at OMB, Treasury, and the National Economic Council.”
Silver then emphatically informed the Committee, “This loan––like all the loans underwritten by career professionals, supported by outside specialists –– it was reviewed by career professionals from multiple executive branch offices.” “It was not rushed, the review took place over several years.” “It was not given to friends –– indeed no one in the Loan Program had any idea what individuals were involved in this [Abound] or any other transaction, nor did we care.” The questioning continued. Silver was asked if he saw any evidence of pay-to-play during his tenure. Silver’s response: “None whatsoever, sir—as I say, almost nobody that I am aware of in the Loan Program even knew who the individuals were who had invested, either directly or indirectly, into these companies.”
During the October 11 Vice Presidential debate, when Paul Ryan challenged him on the oversight of the “$90 billion in green pork to campaign contributors,” Vice President Biden sang the same tune: “His colleague runs an investigative committee, spent months and months and months going into this. Months and months. They found no evidence of cronyism.”
Just last week, October 26, 2012, President Obama continued the ruse, when he told a Denver, Colorado news anchor that decisions made in the loan program office are “decisions, by the way, that are made by the Department of Energy, they have nothing to do with politics.”
Clearly the stories were coordinated, and were contrary to the obvious conclusions a thinking person would draw—which prompted the Oversight Committee to probe further. However, until the leaked emails were made public on Thursday, we had no proof. We needed the smoking gun.
The tale-tellers, at the least, “misled the American people,” behaved unethically, and may well be guilty of perjury.
Steven Chu, Secretary of Energy
The emails revealed that Secretary Chu may well have perjured himself—though as Jordan implied, he may just be incompetent. We’ve written extensively on the interaction of decision-makers in the Administration and its “buddies.” In the March 2012 hearing, Jordan asked specifically: “Did the White House call you about, talk to you about any of these…did someone from the White House talk to you, the Chief of Staff, someone from the White House, talk to you about these respective companies, involving these individuals?”
Our research shows involvement of then-White House Chief of Staff Bill Daley in the BrightSource loan—one of the projects Jordan was asking about.
The new emails show Chu personally issued orders to prioritize a project favored by House Majority Leader Steny Hoyer—Unistar.
Email #13 shows that Silver wrote to Chu’s Chief of Staff in a December 10, 2010, email: “since Aldy [White House staff Joe Aldy] personally promised the edf management group [one of the sponsors of the Unistar loan guarantee project] that he would lead an interagency review of this topic, we should tell him that he should be the one to call and deliver the news.”
#14: “there has been a commitment from S1 [Secretary Chu] to Steny Hoyer on this.”
#15: “Just came down from the Secretary’s office. He is adamant that this transaction is going to OMB by the end of the day.”
LPO Credit Advisor Jim McCrea (possibly the source of this massive email leak, as his name is one of the most consistent in the email text), had hesitation about the project, stating in #16: “Ordinarily, over an issue like this, I would refuse to sign the credit paper and refuse to send it to OMB tomorrow but given the direct order I was personally given by S1[Secretary Chu]…”
Didn’t someone say the loans were not politically motivated and were based solely on merit? Oh, yes, it was the President who said: “they have nothing to do with politics.”
Jonathan Silver, Former Executive Director of the Loan Program Office
Silver (reported to be an Obama bundler and Democratic donor) resigned in early October 2011, amidst the Solyndra scandal. His claim that loan reviews took place over “several years” and that loans were not “given to friends” is perjurious.
First, the loans couldn’t have been reviewed over “several years.” Obama wasn’t President until January 2009. The Stimulus funds were made available in February 2009. The first company to go bankrupt was Solyndra, in September 2011, having been granted the loan in September of 2009. Clearly, there was no “several years” in there.
While logic and simple math tell us that the loans were not reviewed over “several years,” the emails prove the rushed process. In the 350+ page Appendix II, the very first email is from McCrea to Silver—subject line: 28 day clock. In it he complains about things being rushed. He opens with “I do not have a good sense of why the DOE and OMB agreed to a 28 day clock…” Though by the end of the page-long email, McCrea seems to concede: “I am not sure that the 28 day process is really as much of a constraint as it might appear at first glance.”
Again, we covered Silver’s involvement with many key players including John Woolard, CEO of BrightSource Energy. Silver is very well connected, having served in the Clinton Administration, he parties with Al Gore, was a frequent White House visitor and participated in meetings with Chief of Staff Bill Daley. Silver used his personal email account to conduct DOE business. But there is no hard proof there.
Also found in Appendix II, is that early on (December 2009), way before the DOE finalized the $1.6 billion loan guarantee for BrightSource Energy, there was a strong push by Silver, and others inside the energy department in getting this loan approved.
“DOE is another story. We are hearing that despite a strong push by Silver, Spinner, Rogers and others internally, the process is getting sideways by any number of bureaucratic hold ups and there is now real potential for consideration of the project to slip until next year.”
Now, as noted under testimony this past July, Silver made this denial: “…as I say, almost nobody that I am aware of in the Loan Program even knew who the individuals were who had invested, either directly or indirectly into these companies.” However, in response to their concern we find this: “Do you all think we should have vantage point insist on mtg with chu or silver or Rodgers? Should John and I try to fly out for something similar? Looking for some game changer but perhaps we’ve done all we could. Is dc shut down by the snow or is there some impact we could make? Joshua”
And we know that Vantage Point Partners is the majority stakeholder in BrightSource, where Sanjay Wagle was a principal, and is currently a “renewable energy grants adviser” at the Department of Energy under Secretary Chu.
While we know that Silver had cozy relationships with quite a few of those seeking green-energy funding, these emails confirm that lobbying the White House and the Vice President’s office achieves results, not only with getting a loan approved, but clearing obstacles with the Department of Interior (DOI) that put their entire billion-dollar project at risk.
Email #5, drafted by Bright Source CEO John Woolard for then-Board Chairman John Bryson to send to then-White House Chief of Staff Bill Daley: “This project is now at significant risk due to delays in permitting at the Department of Interior…”
#6, from Wollard stated: “we are making good progress in DC. Whitehouse [sic] does seem to be very focused on this issue, in fact it is being elevated through the office of political affairs as well as VP Bidens- so we are starting to get them focused on the massive political risk- it helps that Bloomberg called Ivanpah ‘Obama’s energy project’ so it does have their attention.”
#7, two weeks later, BrightSource got what it wanted: “The U.S. Fish and Wildlife Service issued their revised Biological Opinion, prompting the Bureau of Land Management to issue a new notice to proceed allowing continued construction at Ivanpah units 2 and 3.”
The BrightSource case reeks of political connections, yet we are supposed to believe the loans “had nothing to do with politics.”
Joe Biden, Vice President
Biden’s denial comes from his one debate of this campaign season, about which Diana Furchtgott-Roth writes for Real Clear Markets: “In Thursday’s vice presidential debate, Joe Biden denied any ‘cronyism’ in the award of Energy Department grants and loan guarantees to encourage the development of renewable energy. Plus, he asserted that government-assisted green energy projects had a better ‘batting average’ than do projects backed by investment bankers. Just one problem: Neither of Biden’s assertions was true. Plus, the Vice President himself had a role in the cronyism.”
Email #6, proves her point: “…It is being elevated through the office of political affairs as well as VP Bidens…”
Then there is #4: “Pressure is on real heavy on SF [Shepherds Flat] due to interest from VP.”
Additionally, as we addressed, though not revealed in the emails, Bernie Toon, who served then-Senator Biden as his Chief of Staff, became a lobbyist for BrightSource Energy.
The White House and President Barack Obama
President Obama did keep himself somewhat isolated—having made fewer denials and being involved in fewer emails, however, he cannot be omitted from the discussion, as he was clearly party to the loan approvals. Plus, the emails show that DOE officials were pressured by the political interests at stake.
Email #1, from McCrea to Silver: “I am growing increasingly worried about a fast track process imposed on us at the POTUS level based on this chaotic process that we are undergoing…by designing the fast track process and having it approved at the POTUS level (which is an absolute waste of his time!) it legitimizes every element and it becomes embedded like the 55% recovery rate which also was imposed by POTUS.”
#2, from David Schmitzer, DOE LPO Director of Loan Origination to McCrea: “Jonathan just said at our staff meeting that, opposite the message received on Thursday, AREVA is now a ‘go” (seems on Friday POTUS himself approved moving it ahead).”
#3, from Silver to McCrea, encouraging him to remind a Treasury official of White House interest in now bankrupt Abound Solar: “You better let him know that WH wants to move Abound forward. Policy will have to wait unless they have a specific policy problem with abound.”
Despite Obama’s claim that the decisions regarding the loans had “nothing to do with politics,” it is clear that they had everything to do with politics—and not just his own. Loans were used to bolster Senator Reid’s re-election chances in the tight 2010 race.
Email #8, McCrea wrote: “Since this is not going to go into the DOE, and just to be clear, the translation is: Reid may be desperate. WH may want to help. Short term considerations may be more important than longer term considerations and what’s a billion anyhow?”
#9, Silver wrote: “I need some stats on how many projects we have funded or have in DD [due diligence] as a percentage of totals. Reid is constantly hit at home for not bringing in the federal dollars.”
If all of this were a novel, or better yet a dramatic feature film, we’d find it most entertaining. We’d leave the theater shaking our heads at the gall of the movie’s starring actor. Instead, this full-color story (White House, green energy, Silver connections) leads to red ink—money borrowed from China that the US taxpayer will be paying back for generations.
The coercion, corruption, cronyism and, cover up of the President’s pet projects is really a horror flick, after all, the emails were released on Halloween. Each one of us is a victim of an expensive trick.
OP/ED | 3/29/2012 @ 12:38PM
House Oversight Committee
Reports $14.5B DOE Green Loan
Program Train Wreck
Nobel Laureate Energy Secretary Steven Chu is bringing home a very bad
report card. It’s a whole lot worse than he expected. When asked by
Chairman Darrell Issa at a March 21 House Oversight and Government
Reform Committee if he would give himself an “A minus” on “controlling the
cost of gasoline at the pump”, he responded: “The tools we have at our
disposal are limited, but I would I say I would give myself a little higher in
that. Since I became Secretary of Energy, I’ve been doing everything I can to
get long-term solutions.”
Judging from a March 20 committee staff report, Secretary Chu’s
self-assessment would seem a bit too lenient. Titled “The Department of
Energy’s Disastrous Management of Loan Guarantee Programs”, it details
many reasons for lowering that grade by several letters. The document cites
“numerous examples of dysfunction, negligence and mismanagement by
DOE officials, raising troubling questions about the leadership at DOE and
how it has administered its loan guarantee programs.”
By the conclusion of DOE’s 1705 program in September 2011, 27 project
loans totaling more than $14.5 billion had been approved. A large number of
these (including Solyndra) “exposed taxpayers to excessive risk” that were
glaringly apparent, yet ignored, from the time of the program’s inception. In
doing so, DOE violated responsible lending standards and eligibility
requirements. It also amassed a highly speculative and undiversified loan
portfolio that may ultimately result in substantial taxpayer losses.
A disproportionate number of these transactions (80% of funds… more than
$13 billion) involved solar projects. As reported, this overemphasis on one
type of technology leaves taxpayers vulnerable to changes in the market for
solar energy. DOE also permitted “double dipping,” where a company
received multiple federal grants and loans to cover the cost of a single project
and reduced its “skin in the game.” In addition, DOE allowed large and
financially sound parent entities to undercapitalize their loan guarantee
EV Hype and Hope
By Michael T. Burr Six months after Solyndra’s bankruptcy, the resulting controversy is affecting other companies that were hoping to secure loans from the Department of Energy. Lawmakers want to know whether the DOE loan program has stalled out — and whether reforms are needed to clarify the mission and the risks for taxpayers.In the past few years, hype over electric vehicles reached a crescendo in the media and in political circles. The good news is that this hype spurred major investments — both private and public — toward R&D and commercialization that’s already starting to show results (See “The Hundred-Dollar Race” – left). The bad news, however, is those results haven’t yet translated into dramatically better or cheaper cars in showrooms, leaving first-generation EVs to compete against mature gas-powered cars with much lower sticker prices.
The difficulty of that competition became clear in March 2012, when Chevrolet suspended production of the plug-in hybrid Volt, because inventory was stacking up. But in addition to slow sales for products already in the market, some new concepts have failed to get out of the garage, providing fodder for skeptics who say batteries can’t against internal combustion, and subsidies are a waste of taxpayer dollars.
Such skepticism isn’t entirely misplaced; many questions about battery technology remain unanswered. And the hype cycle for any new technology tends to raise unrealistic expectations in the early years — expectations that might never be realized. However, potholes and problems don’t indicate the end of the road for electric transportation — far from it. This early-phase shakeout suggests the politically driven DOE loan program needs some restructuring to ensure it achieves the goal of a competitive and financially viable electric transportation industry.
The Valley of Death
In every new industry, companies on the so-called “bleeding edge” of technology frequently find themselves at perilous risk of running out of funding before they can establish a sustainable revenue stream. Another metaphor is the “valley of death” — the place where new technology ideas go to die, because they can’t get enough funding to become fully commercial. That seems to be happening now, as companies struggle to deliver on a promise whose technology foundation hasn’t yet solidified.
The purpose of the Department of Energy’s (DOE) clean energy loan guarantee programs — including the Advanced Technology Vehicles Manufacturing (AVTM) program — is generally to help new technologies cross that valley of death, so they can pursue a viable commercial future. These loans are differentiated from some DOE grant programs, which fund basic research at earlier stages. But as with any government program, DOE’s loan guarantees attract a great deal of political attention, creating substantial political risks for the administration that approves them.
Such political risk turned into a scandal for the Obama administration last year, when solar technology company Solyndra went bankrupt after collecting nearly $530 million in federal loans. The episode sparked a controversy about DOE processes, and prompted allegations of political favoritism in the White House. And since then, DOE seems to have tightened the purse strings for new energy technologies. In fact, DOE hasn’t approved a single AVTM loan since before the Solyndra bankruptcy, and as a consequence, several EV companies have pulled the plug on their efforts:
• Bright Automotive — launched in 2008 with backing from Google Ventures, Alcoa, Johnson Controls, the Turner Foundation, and Rocky Mountain Institute — closed its doors at the end of February 2012. Bright was counting on a $450 million DOE loan that company officials said the agency delayed and loaded up with increasingly onerous conditions until Bright was “forced to say ‘uncle.’”
• Aptera was developing a teardrop-shaped EV — with funding from Google, NRG Energy, and Idea Labs — until December 2011 when it fell short of the expanded $80 million private funding commitment DOE required to advance a $150 million loan.
• Next Autoworks closed its San Diego headquarters in December. The company stated that it withdrew its application for a $320 million loan after it learned DOE would decline it because of “political and credit-risk” concerns. The company had received equity support from Kleiner Perkins, T. Boone Pickens … and Google.
A common thread in their stories — other than the fact that Google was involved in all three — seems to be the assertion that DOE negotiated in bad faith by repeatedly changing terms and conditions, making them more demanding and restrictive, with ever-larger equity requirements, smaller lending commitments, and tighter deadlines to meet development milestones. Some applicants directly accused the Obama administration of stonewalling to avoid making loan commitments that could provide campaign-trail fodder for the president’s opponents. William Santana Li, CEO of Carbon Motors — which is developing a fuel-efficient diesel police car and was denied in its bid for a $310 million loan — wrote a scathing letter to DOE Secretary Stephen Chu, and told the New York Times, “Since Solyndra became politicized last fall, the Department of Energy has failed to make any other loans.” William Donoghue, COO at Bright Automotive, echoed the sentiment. “We got tired of waiting for heaven and earth to move.”1
For its part, DOE says the Solyndra mess had nothing to do with its decisions regarding these particular loans, but rather that the department was focused on protecting taxpayers from unreasonable risks. Chu said as much in his comments before a U.S. Senate panel on March 13.2 “We have to look out for taxpayer money, and as things change you have to look at the original covenant of the law, which says there must be a ‘reasonable prospect of repayment.’ Especially for a new company, we have to independently evaluate whether the company’s market projections make sense. We try our best to do that.”
Indeed, doing that allowed DOE to dodge the worst of what might become another costly crackup. Specifically, Fisker Automotive encountered problems in February, when the company delayed releasing its $102,000 Karma luxury EV. As a result, DOE withheld the latest tranche in a conditional loan commitment totaling nearly $530 million. When Fisker finally unveiled the car in March, it was plagued with technical issues; one unit inexplicably conked out during a Consumer Reports test drive, and the company recalled 200 units to implement software fixes. Then, adding insult to injury in the same month, the brokers who’d arranged private funding for Fisker learned that the Securities & Exchange Commission might bring them up on charges related to the company’s 2009 private equity offering.
The Fisker case provides ammunition for EV critics who suggest tax dollars shouldn’t be used to finance exotic toys for millionaires. But beyond that, DOE’s decision to distance itself from Fisker seems to have happened just in time for the administration to avoid the brunt of the scandal.
Survival of the Smartest
Any new technology goes through a hype cycle. It begins with excessive excitement and inflated expectations, followed by disillusionment when those expectations aren’t immediately met. Finally, years later, the technology reaches a plateau of productivity, and often it will exceed even the most optimistic predictions.
EV technology is going through this hype cycle now, and the recent spate of bad news suggests it’s entering the disillusionment phase. Arguably this is a good thing, as it will bring a healthy shakeout among EV companies before too much money is spent on ventures that won’t succeed. And irrespective of whether DOE has allowed the loan process to become unduly politicized, the EV industry that survives the shakeout likely will be more stable for it. In principle at least, the best technology options will continue development, and the companies that pursue them will be less dependent on government funding — which is notoriously fickle and inevitably political.
In the short term, increased attention to DOE’s slow processes might spur action for some borrowers. But overall, DOE seems likely to keep its purse strings tight, rather than take the risk of loosening them in an election year. And indeed, the main focus of the March 13 Senate hearing involved protecting taxpayer interests and ensuring DOE doesn’t repeat a Solyndra situation. Chu assured senators the agency already is implementing changes — recommended by independent auditor Herbert Allison — to strengthen oversight and establish “early warning” mechanisms to detect changing risk factors on a more real-time basis.
At the same time, the complaints of loan applicants suggest the federal loan program needs some basic restructuring. That’s one apparent conclusion from the March 13 hearing, where Chu said the agency frequently struggles to interpret its requirement under the Energy Policy Act of 2005 to approve only those loans that have a ‘reasonable prospect of repayment’—the word “reasonable” being a vague term whose subjective definition often puts the secretary in a no-win position. Sen. Ron Wyden (D-Ore.) proposed that Congress should consider clarifying the law to establish different categories of risk that might merit different loan treatments. By contrast, under the law today, DOE pursues what seems to be a “one-size-fits-all” approach, evaluating “utility-tied projects” — i.e., those with off-take agreements — on the same basis that it evaluates more speculative R&D-type ventures.
“Not all loan guarantees are created equal,” Wyden said. “Would it make sense to restructure the loan guarantee statute along the lines of recognizing fundamentally different risks?”
Auditor Allison lent his support to the idea.
“The controversy about the program is that there are differing expectations about what it’s supposed to be doing,” he said. “I don’t think there’s anything wrong with making loans that are admittedly risky, as long as we’re acknowledging the risk in the loans. There needs to be great clarity about the purposes of programs and what they’re designed to achieve.”
ABOUT THE AUTHOR Michael T. Burr is editor-in-chief of Public Utilities Fortnightly.
1 “Solyndra is Blamed as Clean-Energy Loan Program Stalls,” New York Times, March 12, 2012.
2 Full Committee Hearing, “Allison Report on DOE Loan Guarantee Program,” Senate Energy & Natural Resources Committee, March 13, 2012. Webcast and some submitted testimony available at senate.gov. Also see “Senators say Energy loan programs need restructuring,” Detroit News, March 13, 2012.
MARCH 26, 2012 AT 7:17 PM
House panel seeks answers on Obama’s electric vehicle strategy
BY DAVID SHEPARDSON DETROIT NEWS WASHINGTON BUREAU
Washington -A House panel investigating the Obama administration’s
support for electric vehicles wants to know if the administration still thinks
the U.S. will have 1 million plug-ins on the roads by 2015.
In a letter to Energy Secretary Steven Chu, Rep. Andy Harris, R-Md., who
chairs the House Science Committee’s panel on energy and environment,
wants information about the Obama administration’s proposal to boost
electric vehicle spending by more than $1 billion through a National
Community Deployment Challenge.
The letter criticized the Obama administration’s proposal to boost the electric
vehicle tax credit to $10,000 — up from $7,500 — noting that General
Motors Co. has said the average income of a Chevrolet Volt owner is
“Weak demand and reliability problems have plagued their introduction,”
Harris said, noting that GM has suspended production of the Volt for five
weeks and that the Fisker Karma purchased by Consumer Reports was
deemed undriveable after a few days.
The Energy Department didn’t respond to Harris’ criticism directly.
“As part of President Obama’s sustained and comprehensive approach to
lowering energy costs for American consumers, the Obama Administration is
pursuing an all-of-the-above energy strategy,” said Energy Department
spokeswoman Jen Stutsman. “This includes expanding domestic oil and gas
production, improving the fuel efficiency of our vehicles, developing next
generation biofuels, and investing in cutting-edge electric vehicle
technologies that will insulate American drivers from high prices at the pump
over the long-term.
The letter also notes that Ecotality, the recipient of a $114.8 million Energy
Department grant, is being investigated by the Securities and Exchange
Commission for insider trading. The letter said that Ecotality had installed
just half the charging stations it was supposed to.
Then-candidate Obama in 2008 pledged in a campaign document to “get 1
million plug-in hybrid
cars on the road by 2015.”
Harris wants to know “what is the status of and outlook for President
Obama’s goal of putting 1 million EVs on the road by 2015.” He also asks
when EVs will be cost-competitive without government subsidies, and how
many government-paid charging stations have been installed. He also asks
how much the Obama administration has spent on electric vehicle tax
The letter says the Obama administration has committed more than $13
billion in federal loans and grants to boost electric vehicles, and “has
generated great concern regarding the potential for waste, duplication and
cronyism and the potential of picking ‘winners and losers’ among
companies and technologies.”
President George W. Bush first signed into law the $7,500 tax credit for
electric vehicles in 2008.
This month, the White House said it wants to spend $1 billion to help up to
15 communities speed the deployment of advanced-technology vehicles.
Another $3.7 billion would go to new tax credits for electric vehicles,
commercial trucks and other advanced-technology vehicles.
But in a major policy shift, Obama wants to broaden a government tax credit
that was created to support electric vehicles.