- The Washington Times - Friday, July 10, 2009

ANALYSIS/OPINION:

Your article, “U.S. tax dollars may aid Russian” (Page 1, Sunday), did a disservice to a company trying to build a new American industry and to those public officials who support it.

Its premise is that there should be official concerns about a fully compliant NASDAQ-listed company, Ener1, applying for federal funding to expand production capacity for batteries to power hybrid and electric vehicles. The reason you give is that Boris Zingarevich — an entrepreneur who happens to hail from Russia and already is in a 50-50 joint venture with an iconic American company, International Paper — sits among Ener1’s primary investors. Our company already has passed extensive due diligence reviews for federal government grants under which we have been working successfully for several years.

The article seemed to recycle unsubstantiated claims from Russian media postings on the Internet about purported current connections between the Russian entrepreneur and his country’s president. It repeats a dubious concern that high technology could leak to the Russians, while, in fact, lithium-ion batteries manufactured by our industry have not yet been put in mass-produced electric cars, let alone tanks. Moreover, future military applications certainly will be strictly controlled by well-established export regimes. The article’s assertions about our Indiana company are particularly ironic given that Ener1 is the only company in our sector with commercial-scale production facilities in the United States, making it the most “American” company in our industry.

The article made several incorrect statements, such as: “According to federal records, Mr. Zingarevich is the ‘provider of substantially all of the funding’ for Ener1.” In fact, $150 million in equity capital has been raised from outside sources, including leading international investment houses, equity mutual funds and hedge funds in the United States, which exceeds Mr. Zingarevich’s total investment to date. There are other problems with basic facts in the article, such as mixing and mismatching both the names of the U.S. Energy Department support programs in question and their respective appropriations levels.

The facts are these: There are effective laws and regulations that strictly govern publicly listed U.S. companies, federally funded loan and grant programs, and international technology transfer. Our company always has been, is now and will always remain in full compliance with all of them. Not much of a story there.

CHARLES GASSENHEIMER

Chairman and CEO

Ener1 Inc.

New York

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