Democratic and Republican politicians alike hailed the news in 2009 that U.S. battery maker A123 Systems had won a quarter-billion-dollar federal grant, but just three years later, the company finds itself bankrupt and the target of a buyout by a Chinese competitor.
The Massachusetts-based company filed for bankruptcy protection this year, setting the stage for an auction watched closely by Washington lawmakers and the Obama administration alike.
While the Obama administration has contended it should have a say in who takes over the company, the secretive auction held in the offices of a Chicago law firm started Thursday and ended with word that the winner was Chinese-based Wanxiang Group Corp.
Among other concerns, the politicians said that little public information was available about the internal structure, governance and ownership of Wanxiang.
“This proposed transaction raises significant national security and public policy considerations that, if not appropriately addressed, would impair U.S. national security and threaten America’s innovation leadership and job creation,” said Rep. Bill Huizenga, Michigan Republican.
Mr. Huizenga said he was concerned in particular that A123 has multiple U.S. defense contracts worth millions of dollars, and he worried that sensitive military secrets could wind up in the hands of foreign agents.
“These contracts involve military vehicles, unmanned aerial and underwater vehicles, power grids, unmanned ground and portable power systems, high-energy lasers and advanced armor,” he said. “Should any adverse foreign agent working through Wanxiang gain access to these contracts, such access would be extremely detrimental to U.S. military operations.”
But the situation did little to allay the concerns of Republican Sens. Chuck Grassley of Iowa and John Thune of South Dakota, who issued a joint statement Monday calling for a “full review” of the bankruptcy transaction by the Treasury Department, which also must approve the deal.
“In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns,” the lawmakers said.
Still, the auction hasn’t been finalized, and the deal must be approved by the U.S. Bankruptcy Court in Delaware. A hearing has been scheduled for Tuesday. In addition, the federal government insists it should give its consent before any new ownership takes over, according to court papers.
But a creditors committee filed papers late last week arguing otherwise.
“[The Department of Energy] has no better claim to the proceeds of the subject property than any other creditors,” the committee lawyers said.View Entire Story
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Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at email@example.com.
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