Lawmakers continue to investigate the Obama administration's stewardship of clean energy funds, especially those spent on struggling companies. A $1 million payment to the battery make A123 Systems on the day it filed for bankruptcy has rekindled questions.
On the day that A123 Systems filed for bankruptcy earlier this year, the Obama administration sent nearly $1 million in new clean energy assistance to the financially struggling but politically connected battery maker.
Energy Department officials confirmed the payment to the Washington Guardian, insisting the timing was coincidental. They said the payment had been approved a week or more beforehand and simply was sent on the day the company filed for bankruptcy, the latest clean energy company funded by President Obama's clean energy stimulus program to hit hard times.
“The Energy Department takes its responsibility to be good stewards of the taxpayers’ money very seriously," Energy Department spokesman Bill Gibbons said. "Funds are only disbursed to a company for work already completed toward the ultimate goal of the Department’s grant.
"Through its investments, the Energy Department is helping to build an American manufacturing industry for advanced batteries, support American workers and ensure that the U.S. is able to compete in a fiercely competitive global market."
That explanation, however, is unlikely to appease Republicans in the Congress who continue to investigate the administration's stewardship of clean energy funds through the American Recovery and Reinvestment Act. The administration handed out more than $800 million in funds to companies like Solyndra that have since gone bankrupt, and taxpayers are expected to recover less than half of those losses.
A123's financial troubles were well known publicly well before the bankruptcy, and officials had said they had slowed funding to the company before the bankruptcy. The administration also knew the company was negotiating with a Chinese firm who wanted gto buy or invest in the company technology.
Sens. Charles Grassley, R-Iowa, and John Thune, R-S.D., said the payment of $946,830 raised serious questions about the department's judgment and its concern for taxpayers, especially given the concerns raised about potential Chinese involvement in the firm.
"The Department of Energy was aware of A123’s pending transaction with a foreign company, Wanxiang. In fact, the Energy Department was informed on August 3 and still gave the company more federal tax dollars," the senators said. "In addition, A123 confirms it has a federal government contract with a ‘secret’ security classification. All of this paints a disturbing picture.
"One, the Department of Energy is writing checks to a company literally as it is declaring bankruptcy. Two, a private company and federal grant recipient has provided more disclosure about its operations and assurances about intellectual property and national security than our own Department of Energy. The Department of Energy needs to answer for why it appears to put federal grants on auto-pilot to the detriment of U.S. taxpayers. This can’t stand," the lawmakers said.
Since the bankruptcy, A123 continues to operate as they proceed through the bankruptcy process, employing workers and producing batteries at their manufacturing facilities in Michigan.
In a letter to the senators, A123 said the federal money it received from DOE was not based on its financial condition or need but rather was supposed to increase employment and should be judged in that light.
A123's failure and its political connections to the Obama administration remain under scrutiny. The Washington Guardian reported recently the company hired a well connected lobbyist and visited both Presidents Bush and Obama inside the White House as it pursued its federal aid.