Failing to heed the lessons of the Solyndra debacle, Energy Department officials kept quiet about their knowledge that a government-backed electric car charger company was sliding toward bankruptcy and putting taxpayer money at risk, the agency’s chief watchdog has found.
Inspector General Greg Friedman admonished department officials for failing to disclose during an audit this summer what they knew about San Francisco-based Ecotality’s financial troubles and the possibility that the firm might not meet the terms of its taxpayer funding. The company received $100 million in aid from the 2009 stimulus.
“We are deeply concerned because the information directly related to the objective of our audit, to determine whether the Department had effectively awarded and managed funding to Ecotality,” the watchdog wrote in a report with eerie overtures from the Solyndra solar failure.
Tuesday’s report marked the latest black eye for President Obama’s much-ballyhooed strategy to use the 2009 stimulus to fund clean-energy projects, many of which have failed.
One such example is the Solyndra solar company, which fell into bankruptcy after receiving government money. In September 2011, Solyndra filed for bankruptcy, despite receiving $535 million from the Energy Department. Much of that money will be lost to taxpayers, officials have acknowledged, and the administration promised after that high-visibility failure to do a better job tracking grant recipients that are in financial trouble.
Ecotality received $135 million in total funding from the federal government over the past eight years, including $35 million for two projects that were approved in 2005 and 2011, and a $100 million grant from the Obama administration’s Recovery Act, known as the American Recovery and Reinvestment Act of 2009, which gave a boost to energy-efficient companies.
Ecotality filed for Chapter 11 bankruptcy protection Sept. 16, but officials at the Energy Department failed to give the inspector general notice in the months leading up to the bankruptcy.
The Energy Department became of aware of Ecotality’s problems May 21, when the company reported that it was not on track to meet its September milestones, which included installing charging stations and collecting electric vehicle usage data.
On June 14, officials from the Energy Department notified Ecotality that it would have to submit a corrective action plan to address the problems that were preventing the company from installing the electric vehicle charging stations on schedule.
The Energy Department also cut off Ecotality’s Recovery Act funding but continued to make payments on the $26 million project it was awarded in 2011.
But on July 9, Energy Department officials ignored these problems in comments they provided for a report that the inspector general was writing, which the watchdog indicated was negligent on its part.
“In fact, in its comments, the Department asserted that previous award modifications, discussed in our July 2013 audit report, made Ecotality’s production and installations goals achievable,” the watchdog wrote.
Energy Department officials later said they didn’t think the information about Ecotality’s struggles was relevant to the inspector general’s audit, but eventually agreed to the watchdog’s suggested measures to improve transparency.
“The Office of Energy Efficiency and Renewable Energy appreciates the opportunity to work with the Office of the Inspector General to improve financial assistance award administration and review and comment on the draft report,” wrote Kathleen B. Hogan, deputy assistant secretary for energy efficiency at the Energy Department.
“[The Energy Department] is committed to transparently and accurately responding to the [inspector general’s] information and data requests with reliable, useful and timely information.”