Friday, November 23, 2012

DEVELOPING: Department of Energy Facing "Corruption" Lawsuit, Shocking DOE Emails, and the $8.4 Billion ATVM Program's "Favored Five"

The latest in the "Green Corruption Scandal" arrived last week ––  the Department of Energy (DOE) is facing a lawsuit, a story that the Heritage Foundation broke on November 16, 2012, and was picked up by the Drudge Report, Lawsuit Alleges “Corruption and Negligence” at Department of Energy.


Yet it was breaking news that I had already been alerted to days before, and just after Marita and I had broke the DOE "Halloween" scandal –– Emails Catch White House Lie on Green-Energy Loans, where the House Committee on Oversight and Government Reform released a new report of “over 150 emails that contradict statements by the President, Secretary Chu, the White House and DOE officials,” revealing a series of questionable practices, including coercion, cronyism and, cover ups. 

Still, we only covered the memorandum and few tidbits from the incriminating 10/31/21 email dump, where we find that "the Committee obtained documents from current and former DOE employees and contractors, many of which have been withheld by the Department of Energy for more than a year." 

I have since completed reading both Appendix I and the 350+ page Appendix II, which are the "smoking gun (s)" I've been searching for since 2010. In July I sounded the alarm about the "shady email practices" used by some of the DOE officials, specifically former DOE Loan Advisor Jonathan Silver, where he and others inside the DOE have been using their g-mail account to conduct DOE business (a direct violation the Federal Records Act of 1950). However, now we find email interactions that not only show the inter-fighting between the DOE, OMB and Treasury, but that DOE Officials were trying to change the loan application policies in the middle of the process. 

Let's not forget that just prior to the 2012 election when a Colorado reporter pointing to "critics who see Abound Solar as Colorado's Solyndra" caught President Obama off guard. Obama proclaimed, "...And these are decisions, by the way, that are made by the Department of Energy, they have nothing to do with politics."

These shocking emails prove that President Obama and the White House were actively involved in pressuring and approving these loans, totaling over $34.7 billion to date. Throughout these email interactions we find plenty of references to the president, POTUS, the "7th floor," and "the Hill." There were even high-level meetings with Valerie Jarret, "rahm," and Carol Browner –– just to name a few. On four projects: Abengoa, Abound, First Wind, and Beacon, email dated June 25, 2010, states, "DOE is moving with 'the fierce urgency of now,'" and references to "WH intervention" and "significant WH support."  

Worse, contrary to House Oversight testimonies, DOE Officials were rushing (a fast track process imposed at the POTUS level), and we find more email evidence:


September 9, 2010 email:  "As you all know, the pressure to make decisions on this transaction [Shepherds Flat] are high so speed of the essence."  And Email #4 from Appendix I dated that same day: “Pressure is on real heavy on SF [Shepherds Flat] due to interest from VP.” NOTE: Shepherds Flat is a General Electric project that I uncovered this past summer. 
September 21, 2010 email: "Jonathon came back from a high level WH meeting late this afternoon. There is pressure to get a lot more deals through the shop." 

June 20, 2010 email about Abound Solar: "Things are simply moving too fast due to timetables being set by the 7th floor and higher. The entire package has already been sent to OMB. I just got pinged by Dep. Sec. to see if we had a Treasury response which we do not. Things are being driven by forces above the agencies."
And if you'll remember I reported on the July 18, 2012, Oversight Hearing, where Silver had emphatically informed the Committee, “This loan [referencing bankrupt Abound Solar] ––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.”


September 30, 2010 email [subject line: Talking points]: Silver writes, "The two project partners are Caithness, a developer, and GE, which is both an investor and the manufacturer of the turbines." 

May 17, 2010 email [subject line: Designation Notice]: James McCrea, LPO Credit Advisor, writes, "To fill Brian in, we have a pretty good mess on First Wind and it is looking like it is going to get a lot worse and quickly at that. Someone is pressing Jonathan who is now pressing hard on the everyone as the sponsor has an IPO in the works..." In this email McCrea (who sounds like one of the good guys throughout) does go on to write his concerns, "the deal has huge issues and that the sponsor's overdriving is not helping at all and that further, the sponsor's IPO is irrelevant." 


January 27, 2010 email at 9:38 AM [subject line: Correction regarding BrightSource Story]: Stephen Dolezalek (Managing Director/CleanTech Group Head for VantagePoint Partners) writes an email to Steve Spinner (former “chief strategic operations officer” in the Department of Energy) and the CEO of BrightSource, John Woolard about a story that came from "merger market," whereas he corrects the record stating that Bobby Kennedy was misquoted, "it [VantagePoint] is about to exit its investment in BrightSource."


Woolard then responds at 5:42 PM, "Separate calls with Silver and Spinner –– emails from Stephen to both of them –– both Silver and Spinner think we are fine –– JW" 

So much for Silver's claim that nobody inside the DOE knew who the investors were, and this is just snapshot.


It turns out that most of the DOE loans were rushed and approved for political reasons –– visits, speeches, announcements, photo ops, and talking points for the president as well as to help those connected to the companies seeking the loans –– CEO's, investors, and Democrat politicians, which goes beyond subsidizing Nevada companies in order to help Senate Majority Leader Harry Reid, D-Nev. win his 2010 reelection campaign. NOTE: Reid was part of our Green-Energy Crony-Corruption summer Special Seven Series. We even find a May 2011 meeting that Jonathan Silver had with John Doerr about NextAuto Works, which is relevant (although indirectly) to the ATVM green car crony-corruption story, which I will get to soon...

These bombshell emails also expose the cozy relationships DOE Officials had during the loan review process with loan applicants CEO's, lobbyists, and investors, etc. It's no surprise that they had meetings and calls with DOE Officials and Energy Secretary Chu, but there are documented meetings and calls with the president, VP, and WH as well as plenty of "green fraternizing" going on –– bike riding, coffee meetings, sleepovers, "beer summits," Al Gore parties, dinners, Democrat fundraisers, and so on. 


And for the life of me I can't quite figure out why the heck OH Rep Democrat Dennis Kucinich, who happens to be on the House Oversight Committee (and as I reported in July, he seemed to adore Jonathan Silver and was adamant that there was NO "clean-energy scandal" in at least one of the hearings I views many times) was heavily involved in getting the Vogtle project funded.   


In February 2010, the DOE offered Georgia Power Company, OPC, and MEAG conditional commitments to for a total of $8.33 billion in loan guarantees for the construction and operation of two new nuclear reactors at a plant in Waynesboro, Georgia. This was a project that was also pushed by the White House –– Email dated December 2, 2009 [subject line: Vogtle: Deadline set by Secretary]: "The time pressure is coming from the WH..."

But I'll get to the bottom of that as I prepare a series to expose all the green corruption evidence from these recent "bag of DOE tricks," which points to lies, perjury, and much more; the Department of Energy Den of Deception continues....




Meanwhile back to the DOE lawsuit... 



Last week I was contacted by Gary Gastelu of FoxNews.com, who on November 20, 2012 published this article –– Startup electric car company accuses Energy Department of corruption. Then the morning of November 21, 2012 John Fund, from National Review Online, appeared on Fox News discussing this recent DOE Corruption lawsuit.
 
In the past few days, Marita Noon and I were given an exclusive interview with a senior official at XP Technology on the condition of anonymity, and we will be publishing our results this Sunday at Townhall.com. But in the meantime, I'd like to refresh my readers about the DOE Loan Guarantee Program (LGP), of which Marita and I have been exposing many green-energy crony-corruption stories since April of this year. However, let's specifically take a look at the ATVM.
 
I've reported several times that the DOE LGP consist of three separate programs, Section 1703, Section 1705, and Advanced Technology Vehicles Manufacturing (ATVM)In fact since 2009, DOE has guaranteed $34.7 billion of taxpayer money30% through the 1703 ($10.3 billion—AREVA and Georgia Power, which both are suspect); 46% through the 1705 ($16 billion of which over 90 percent are politically connected); and 14% through the ATVM ($8.4 billion, which three of the five loans are directly tied to President Obama). Meanwhile, as you'll see,  "both Ford Motor Co. and Nissan were heavily engaged in negotiations with the Administration over fuel economy standards for model years 2012- 2016 at the time DOE was considering their applications.

DOE loan winners (all green-government subsidies for that matter) are part of the "pay to play" scheme and/or those that "get on board" with the Obama agenda, even when 22 of the 26 1705 projects were rated with a "junk bond status." All other applicants –– even those that are worthy and viable clean-energy projects –– are rejected! 

Created under Section 136 of the Energy Independence and Security Act of 2007, the ATVM program holds authority to award up to $25 billion in direct loans, and here's how it went down thus far under the Obama administration. 

From what I gather it was over 100 applicants and only the "FAVORED FIVE" were granted loans...



$529 million
2,000
Apr 2010
2
Closed
$5.907 billion
33,000
Sep 2009
13
Closed
$1.448 billion
1,300
Jan 2010
2
Closed
$465 million
1,500
Jan 2010
2
Closed
$50 million
900
Mar 2011
1
Closed


In the summer of 2010, right after I began to follow the "green" stimulus money, I covered two of them, and they are at the beginning of this report. Eventually others took notice like iWatch in late 2011, "Energy's risky $1 billion bet on two politically-connected electric car builders." Fisker Automotive and Telsa Motors that I've addressed previous columns and blogs, and then in March 2011, the Vehicle Production Group (VPG Holdings LLC), "a Miami start-up that is manufacturing wheelchair-accessible cars and taxis” received a $50 million ATVM loan from the DOE. And who is VPG? The answer lies in my August 15th post, Beacon Bust Tied to Obama Bundler and VP Hunter, the Infamous Washington Fixture, James A. Johnson.




Cruising Down the Green Cronyism Road

#1) Fisker Automotive for $529 million to build cars in Finland (haven't a few gone up in flames and what about those layoffs?), which is a Kleiner Perkins investment where John Doerr and Al Gore are partners.

In September 2009, Fisker received the ATVM loan to build the $87,900 flashy plug-in Karma sports car. Reports at the time stated: “Fisker plans to use $169.3 million of its loan to work with U.S. suppliers to produce the more expensive Fisker Karma, which will be developed at its Michigan and California offices, but then will be assembled “overseas.” The other $359.36 million will go toward producing "Fisker’s Project Nina, which will be entirely manufactured in the United States.” Fisker expected to “Become profitable by 2011.” ABC reported: “Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright, new path to thousands of American manufacturing jobs.” 

 
However, those jobs didn’t materialize — at least not in America. The Karma was produced in Finland. Two years after the loan was awarded, the Washington Post stated that Fisker “has missed early manufacturing goals and has gradually pushed back plans for U.S. production and the creation of thousands of jobs” and announced that the Karma “failed to meet a promised energy-efficiency standard.” Now, in 2012, Fisker Automotive is laying off staff in order to qualify for more government loans. So, President Obama’s “green” energy stimulus was supposed to create jobs; now it's destroying jobs so that companies can get more stimulus? Of course, news of defective battery packs and subsequent fires haven’t help sell the Karma. Fisker has faced “multiple 2012 sales prediction downgrades for its first car release, delivery and cash flow troubles.” Though the company has balked at Solyndra comparisons, Fisker may well be on “death’s door.”

*Fisker Connections 
Kleiner Perkins, where Al Gore and his "climate buddy" and partner, billionaire John Doerr, considered "a very big-ticket Obama donor" by New York Magazine, who in February 2011 hosted a star-studded billionaire Silicon Valley dinner for the president. Doerr also sits on the President Obama’s Job Council, and early on ultimately shaped what went into the energy section of the 2009 Obama stimulus package. A VC firm, by the way that I began to unravel in 2010, stressing that over fifty percent of their Greentech Portfolio secured all kinds of loans, grants, and special tax breaks –– billions of tax dollars. 

Since my research was divulged in 2010, Kleiner Perkins –– Billions of stimulus money going to Al Gore and John Doerr “green” companies –– multiple federal investigations are underway, they have since tripled their portfolio and worth another look. But here is what we know so far...

  
Besides Fisker, Kleiner Perkins was a huge winner of Obama stimulus funds that I exposed in 2010...
SILVER SPRING NETWORKS SCORES OVER $700 MILLION IN SMART-GRID GREEN STIMULUS FUNDS –– RIGGING THE BIDDING PROCESS?

One of the most contentious of Obama Green Stimulus money awards comes out of the ashes of the $4 billion smart-grid grants, with some of the nation’s largest providers of electricity meters “crying foul” over the smart-grid standards in the stimulus bill, according to a report by USA TODAY in February 2009. Additionally, they said that the economic stimulus bill "could put them out of business and wreak havoc in the new market for smart-grid technology by favoring certain computer network standards.”
                                
But the "government bucks" don’t stop at Silver Spring Networks...
 

Ausra Inc. –– a KPCB investment that "develops and deploys utility-scale solar technologies," was acquired by AREVA Inc. in March 2010. Then in July 2010 "AREVA accepted the U.S. Department of Energy’s (DOE) offer of a conditional commitment to issue a $2 billion loan guarantee to support construction of the Eagle Rock Enrichment Facility, AREVA’s $3 billion state-of-the-art gas centrifuge enrichment plant in Bonneville County, Idaho."
 

In 2010, I also reported on Bloom Energy, Harvest Power Inc., MiaSolé, and RecycleBank, however, recent revelations from Peter Schweizer's Throw Them All Out found more, and was revealed in November 2011 by Lachlan Markay entitled "Fisker’s Political Connections." There report state, "Amonix, Proterra, and Fisker are three of at least nine companies financed by Kleiner Perkins that have received taxpayer backing in the form of direct payments, contracts, or preferable tax treatment. The others include EdeniQ, FloDesign, MiaSole, Primus Power, QuantumScape, and TAS Energy. Kleiner Perkins did not respond to a request for comment on this story."


#2) Telsa Motors that received $465 million, and as of late, had some design problems. And according The New York Times (Cash Flows Are Critical for Tesla); Second round of Telsa Cronyism: "The federal government eased terms of its $465 million loan to Tesla to ensure the company didn’t breach key financial hurdles."
 
Telsa Connections:   
First and foremost Steve Westly ("DOE Insider") is the Founder and Managing Partner of The Westly Group, and another Obama crony who made a DNC 2012 cameo. Westly is a two-time Obama bundler, who sat on his campaign’s 2008 National Finance Committee, and was the co-chair of the 2012 Technology for Obama group. He was briefly considered for a cabinet level position in the Obama administration, and in August 2010, Westly secured a top advisory role inside the DOE, close to Energy Secretary Chu. In 2011 was tagged as the "Green bundler with the golden touch." 
While IWatch points to "a trail of [green] loans, grants and tax breaks," I found more –– as of January 2012, over 40% (and counting) of The Westly Group portfolio were winners in the "Obama's Green Spending Spree." That's right; the Obama administration had already approved loans, grants, and special tax breaks for eight out of seventeen of The Westly Group’s green investments.   
Other companies include Amyris Biotechnologies connected to Democrat Senator Dianne Feinstein, as well as Amonix, another Obama endorsement, that received over $20 million in combined stimulus grants, tax credits, and DOE funding; yet it closed its doors in July of this year.  Besides those three are CalStar Products, EdenIQ, Solexel, Soladigm, and RecycleBank. However, what is not widely reported is that The Westly Group's clean-tech portfolio and Kleiner Perkins greentech have some of the same investments that received government subsidies like RecycleBank (see my 2010 investigation on RecycleBank) as well as Amonix and EdenIQ.

But there's more on Telsa...
  • Telsa Founder Elon Musk, a major DNC contributor, and in 2011 donated to the Obama Victory Fund.
  • Steve Spinner ("DOE Insider"), known for his role in Solyndra, a two-time Obama bundler was an advisor to Telsa before he joined the Obama campaign.
  • Telsa's other major investors include Nicholas Pritzker, brother of Penny Pritzker (also from the President Obama’s 2009 Economic Recovery Advisory Board PERAB, and sits on President Obama’s Job Council), whom wears many liberal hats, including a prominent position on Obama’s 2008 National Finance Committee.
  • Google Inc. executives were major investors in Telsa, and they include Sergei Brin and Larry Page, founders of Google. In Peter Schweizer's Throw Them All Out, we find that "Google's CEO at the time, Eric Schmidt, served as an informal advisor to President Obama.” Still, Schmidt, Google Executive Chairman, was an Obama donor in 2008, and since April 2009, is a member of the president's Science and Technology Advisory Council (PCAST). Interestingly, Google’s $814,540 contribution to Obama’s campaign made it the fifth largest donor in 2008. Another Google connection is Dan Reicher, director of climate and energy initiatives at Google, was one of the founders of Cleantech and Green Business Leaders for Obama.  
  • Vantage Point Capital Partners: Sanjay Wagle is a "DOE Insider" and was an Obama fundraiser for the 2008 campaign through his Clean Tech for Obama group. After the 2008 election, Wagle joined the Obama administration as a “renewable energy grants adviser” at the Department of Energy under Secretary Chu. It's interesting to find that Vanatage Point's portfolio has at least nine green firms that have snagged green-government subsidies, and three are in this report: Telsa, BrightSource Energy, and Serious Energy. Meanwhile the other six are 1366 Technologies FloDesign, Genomatica, Mascoma, MiaSole', Solazyme –– also tied to other huge winners, Kleiner Perkins and Steve Westly –– yet there is more to report...
  • Goldman Sachs, another top 2008 Obama donor, with their DNA all over "green," handled the Tesla Motors IPO.


#3) Vehicle Production Group (VPG Holdings LLC), in March 2011, "a Miami start-up that is manufacturing wheelchair-accessible cars and taxis” received a $50 million ATVM, part of the DOE loan program. VPG by the way is an investment of Perseus and is reported to be "backed by oil baron and natural gas vehicle advocate T. Boone Pickens.

However, it was no "surprise" that another Obama bundler benefited from 'green-tech' subsidies. Finally, The Washington Post connected the green corruption dots to the infamous Mr. Johnson, “An investment firm whose vice chairman has been an adviser and fundraiser for President Obama saw one of its portfolio companies win approval this year for $50 million in loans from the administration’s clean-energy loan program.”

However, the other two –– The Beacon Bust and Evergreen Solar Shut Out, were sorely missed by the media, a piece of the green corruption scandal that I exposed in my August 15, 2012 article, Beacon Bust Tied to Obama Bundler and VP Hunter, the Infamous Washington Fixture, James A. Johnson

With seventeen companies listed on the Perseus Energy & Technologies Portfolio, I'm sure if we dug deeper, we'd fine more than three. On the other hand, there is one that struck me –– Clean Energy Fuels Corp., T. Boone Pickens’ alternative energy company. I remember digging up some research about Pelosi and Pickens. But we will stay with the ATVM....


#4 & 5) Ford and Nissan and the Committee on Oversight and Government Reform March 20, 2012 Report –– The Department of Energy’s Disastrous Management of Loan Guarantee Programs
 

Nissan received $1.4 billion loan arrangement under the Department of Energy’s ATVM Program, yet new information has emerged (November 15, 2012). According to The Detroit News, Nissan CEO abandons '12 electric vehicle sales target, which includes the all-electric leaf.
 
Still let's go back in time when both Ford and Nissan snagged their large DOE ATVM loans. Within the pages of the Committee on Oversight and Government Reform report released March 20, 2012 you'll also find well documented “Problems with ATVM Loans," including the obvious cronyism.
 
Breakdown of Problems with ATVM Loans 
 
Each of the “Big Three” auto manufacturers, Ford, General Motors, and Chrysler, along with Nissan, applied for loans under the ATVM Program.  Ford and Nissan are the only major manufacturers that received an ATVM loan.  The companies received $5.9 billion and $1.4 billion respectively. Both General Motors and Chrysler withdrew their applications after waiting over a year for responses from DOE. Initially, financial viability was the primary roadblock that kept GM and Chrysler out of the running for Department of Energy loans. Some speculated that the entire program had been put on hold in order to give these two
manufactures time to prove their financial viability and qualify for loans that would have drained the program of remaining funds.  In the end, both companies withdrew their applications, choosing instead to seek private financing.  The other loan recipients are Fisker, Tesla, and The Vehicle Production Group, receiving $529 million, $465 million, and $50 million, respectively. To date, the ATVM Program has loaned $8.339 billion to five auto manufacturers for the production of ATVs.   


It is unclear whether DOE has a set of objective standards by which it judges the relative merit of applicants.  Based on materials obtained by the Committee, it appears that DOE applies inconsistent standards to each applicant, leaving innovative car companies in a state of perpetual uncertainty over how they will be treated under the process.  These concerns are apparently shared by Senator Diane Feinstein, who wrote DOE complaining that, “On multiple occasions,
the department has missed internal deadlines for initial decisions, term negotiations, final decisions and loan closure.” This haphazard administration of the ATVM Program creates confusion in the advanced technology vehicle market and may have actually hurt President Obama’s goal of fostering a new generation of vehicles.
 
Despite an apparent lack of discernible objective criteria to judge the relative merit of loan applicants, it does appear that ties to the Obama Administration were important for those companies securing an ATVM loan early on in the process.  Both Ford Motor Co. and Nissan were heavily engaged in negotiations with the Administration over fuel economy standards for model years 2012- 2016 at the time DOE was considering their applications. Both companies eventually expressed publically their support for these standards, which the Administration
described as the “Historic Agreement.”  In addition to this curious timing associated with the approval of Ford and Nissan’s loan, the other recipients each enjoyed close ties to the Administration.  For example, Fisker was backed by Kleiner, Perkins, Caufield & Byers, which has significant ties to the Administration. One of the senior partners at Kleiner Perkins is former Vice President Al Gore.  Another partner, John Doerr, serves on Obama’s Council on
Jobs and Competitiveness. In the case of Tesla, board member Steve Westly was a major Obama campaign bundler and a frontrunner for the position of Secretary of Energy.
 

 Department of Energy ATVM Collateral Damage

Case Studies:
There has been very little activity in the ATVM loan program over the last three years, as DOE has only approved one loan since April 2010.  Moreover, the Committee has yet to receive a response from DOE to its February 10, 2012, letter asking for additional information about the loan application process.  Even so, the Committee has gleaned some information about the companies that DOE has considered for ATVM loans.  These stories reveal the haphazard manner in which DOE is administering the program and how ever-changing goal posts and broken promises have promoted the misallocation of scarce resources and pushed some innovative companies into bankruptcy. 

Aptera  

Aptera first applied for an ATVM loan in December 2008, looking for money to fund the production of the Aptera 2e, a three-wheeled vehicle capable of nearly 200 miles per gallon.  Although DOE rejected Aptera’s original application for a loan because a three-wheeled vehicle did not meet the criteria of a Section 136 loan, Congress amended the program in October 2009, and Aptera resubmitted its application in January 2010 for both the 2e and a four-wheeled vehicle. By late 2010, DOE determined that the 2e would not be able to pay back capital costs. Accordingly, Aptera shifted its focus to the 4e, a four door electric sedan, that DOE believed would be more suited to an ATVM loan program. After numerous negotiations with DOE, in September 2011, Aptera received a letter from DOE offering them a conditional loan commitment of $150 million if the company was able to raise $80 million privately.  

Aptera shut down on December 2, 2011, citing the inability to raise additional private capital, having exhausted a bridge loan that was supposed to last through the time DOE made a final decision on the loan. At this point, Aptera’s investors had funneled $40 million of their own money into the project.  Former Aptera CEO Paul Wilbur and former marketing Vice President Marques McCammon have publically asserted that the prolonged timeframe spent engaging with DOE to secure a loan ultimately consumed their cash reserves. Wilber stated that a “bright shiny object disease” characterized the ATVM Program and suggested in retrospect, “We should have raised the money ourselves rather than relying on DOE.” However, the loans given to Fisker and Tesla gave Aptera hope that DOE would eventually act on their application. More importantly, since the DOE continued to engage with the company throughout the time period, management was convinced that DOE was interested and willing to provide financing for the company.


Bright Automotive
Bright Automotive was an Indiana company that developed a plug-in hybrid delivery vehicle that it planned to market to fleet customers. On February 28, 2012, Bright sent DOE a scathing letter announcing that they “have been forced to say uncle” and that it would withdraw from the ATVM application process.  


Bright applied for an ATVM Loan in December 2008 and its application was deemed “substantially complete” at that time. DOE continued to review the application for an additional 1,175 days. According to the company, Bright secured letters of support sent to Secretary Chu from large fleet vehicle users such as Cox, Comcast, and Bust Buy, and had order letters from Duke, Vectren, and Snap On.
 

According to documents obtained by the Committee, on March 2, 2012, Lachlan Seward, then the Director of the ATVM Program, indicated to Bright that a loan for less than $300 million would be quickly approved. In DOE’s next communication, DOE suggested that Bright partner with a large OEM in order to speed up the loan process, intimating that conditional approval would occur in “weeks, not months.” Pursuant to this advice, Bright entered into a strategic partnership with GM in July 2010. At that time, DOE officials informed Bright that they would receive a conditional loan agreement within two months. Two months later, DOE came back to Bright and directed the company to satisfy six additional loan pre-conditions. By January 2011, Bright received a “near final” conditional agreement for a $314 million loan. It was reviewed by the DOE credit team for five months when on May 18, 2011, DOE determined that it would not consider Bright’s loan based on a volume consideration report generated by DOE, one that Bright had asked DOE to reassess. DOE contractors, A.T. Kierney, conducted a new volume study, which led to Bright’s reconsideration for a loan by DOE in June 2011. DOE once again assured Bright that just as soon as the company’s credit package went through the interagency process, it would receive an offer of conditional agreement no later than October 2011.  However, instead of an agreement, in October 2011, DOE told Bright to raise additional equity and perform other financial changes to bolster its balance sheet and credit. This last demand caused Bright to withdrawal from the ATVM loan process. In February 2012, the company closed down.  
 

In their letter to the DOE, Bright’s CEO Rueben Munger and COO Mike Donoughe flatly stated that the ATVM process distorted the U.S. private equity markets, effectively making DOE the only way for ATV companies to receive funding.  According to Munger and Donoughe, DOE then used this position to submit the applicants to the control and “whim” of government bureaucrats. As the letter points out, the ATVM program, as DOE is administering it, contravenes the purpose of the program because it stymies rather than advances technology within the automotive market.  After spending millions of dollars to comply with DOE’s endless finish line and consuming nearly three years of time, Bright withdrew its application from the ATVM Program, closing the company and its idea.

  
ATVM Conclusion
DOE mismanagement of the ATVM Loan Program has put potentially viable companies out of business and caused major setbacks within the ATV market.  DOE has only succeeded in giving billions of dollars to two large auto manufacturers and to companies with strong political connections to the Obama Administration.  However, hundreds of other companies wait in DOE’s loan queue.  At least two of these companies have declared bankruptcy after engaging with DOE for a number of years, believing, based on representations from the Department, that they would eventually receive a government loan.  Meanwhile, DOE conditionally approved a loan for a company that did not meet threshold requirement to be in the program.  DOE’s haphazard and inconsistent administration of the loan program has created significant uncertainty within the advanced vehicle manufacturing community and has potentially retarded progress on the next generation of automotive technologies.  


Stay tuned...

...for our exclusive interview with a senior official at XP Technology to be published this Sunday, November 25th at Townhall.com. Prepare for the rest of the "smoking gun (s)" to be released –– our future series exposing all the green corruption evidence from these recent "bag of DOE tricks," which points to lies, perjury, and much more.  

Busting Open Obama Energy Department's Den of Deception continues...

And check back with Green Corruption as we blow the lid off this scandal. Maybe we'll directly make Drudge next time. 


UPDATE November 27, 2012: Exclusive: DOE corruption—appointed and elected officials should face prison time By Marita Noon (Nov 25, 2012)

An exhaustive review of 350+ pages of leaked emails regarding the Obama administration’s handling of the various green-energy loan and grant programs makes several things very clear: they lied, engaged in favoritism, and rushed application approvals to suit the political agenda of the White House. At the same time, worthy projects that went through a complete due diligence process were denied or ultimately withdrawn...(more)

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