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Money-back guarantee eyed on Energy Department loans
Question of the Day
A House Republican announced plans Tuesday to introduce a bill to make sure that companies backed by federal Energy Department loans or grants pay the money back if they're going to be taken over by a "non-allied foreign nation."
The legislation, introduced by Rep. Marsha Blackburn, Tennessee Republican, comes as a Treasury Department committee weighs whether to approve the sale of a federally backed bankrupt U.S. battery maker to a Chinese competitor.
"This legislation would protect U.S. taxpayers from repeatedly funding companies whose technology and intellectual property are ultimately sold to a non-allied nation," Ms. Blackburn said in a statement announcing the legislation.
The lawmaker's statement also referenced U.S.-based A123 Systems, which received about half of a nearly quarter-billion-dollar federal loan guarantee awarded by the Department of Energy only to file later for bankruptcy protection.
Most of the company's assets would be sold off to China-based Wanxiang America Corp. in a deal pending approval by the Treasury Department's Committee on Foreign Investment in the United States.
The bill, called Stop Mergers, Acquisitions and Risky Takeovers Supplied by American Labor and Entrepreneurship Act, would also mandate that the Department of Energy report to Congress whether acquisitions represent a threat to the United States.
A123 vowed to create thousands of jobs after it won approval for a $249 million federal loan guarantee through President Obama's economic-stimulus program in 2009.
But a review of federal job-tracking figures by The Washington Times last year found that only a few hundred jobs were ever created, though Energy Department officials have said the job-creation numbers don't include other positions that were created but not reported.
A123 announced in December that the U.S. Bankruptcy Court had approved an asset-purchase agreement with Wanxiang America, through which the Chinese company would acquire nearly all of A123's assets for $256.6 million. The court also approved an asset-purchase agreement with Navitas Systems LLC, through which Navitas would acquire A123's government business, including all U.S. military contracts, for $2.25 million.
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About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at firstname.lastname@example.org.
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