Energy Dept. failed to report concerns as green-tech firm was heading for bankruptcy

November 7, 2013

The Department of Energy failed to disclose concerns about a green-technology company that won $135 million in federal funding but ended up filing for bankruptcy in September, according to a watchdog report released this week.

DOE Inspector General Gregory Friedman noted that the firm, San Francisco-based Ecotality, is still due to receive $26 million from the agency for testing electric vehicles.

The report said the DOE knew in May that Ecotality was not on track to meet an important milestone for a grant to install charging stations and that agency officials failed to disclose that information for an audit that the inspector general’s office released roughly two months later.

“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,” Friedman said in the latest report.

Energy Department officials told investigators that they did not think the information was relevant to their review, the report said.

A spokeswoman for Ecotality did not immediately respond to a request for comment.

Ecotality completed more than 95 percent of its required work installing charging stations, erecting more than 12,500 of them in 18 U.S. cities, according to Energy spokesman William Gibbons.

The Energy Department awarded the firm $100 million in 2009 Recovery Act funding for that initiative, in addition to a combined $35 million from a separate program to help pay for testing vehicles.

The agency has suspended the firm’s Recovery Act money, but not a $26 million award for vehicle testing. The Energy Department is not required to pay for the latter unless the work is done.

“To date, approximately $2.6 million has been paid out on the Advanced Vehicle Testing and Evaluation grant,” Gibbons said. “Work under this grant is only done upon request by the Department.”

The inspector general said the DOE should determine whether Ecotality’s financial woes will prevent the company from meeting its award obligations and document any agency decisions about continued funding for the vehicle-testing program.

The department concurred with the recommendations and said it had already initiated some of the actions, according to the report.

Ecotality is among a number of failed firms that received stimulus funding through an Obama administration initiative to support green-technology companies during the recession.

Solyndra, a Silicon Valley-based solar-panel maker, stands as perhaps the most high-profile example. The business collapsed after receiving more than a half-billion dollars in Recovery Act money.

Other examples include Beacon Power, a Massachusetts-based company that received at least $39 million from the federal government, along with Michigan-based battery manufacturers LG Chem and A123, which landed grants worth $150 million and $249 million, respectively.

Critics charge that the administration was doling out cash to political supporters. They noted, for instance, that oil magnate George Kaiser raised up to $100,000 for the president’s 2008 campaign and that his family’s foundation owned more than one-third of Solyndra’s stock.

Kaiser did not sit on the board of the foundation, but a manager for the organization’s investment fund sought his counsel and asked for “authority” to make a major move, according to e-mails revealed in a Washington Post report.

White House officials have insisted that politics never played a role in the decision to support Solyndra or other green-technology companies.

The federal funding for Ecotality came at a time when production and sales of plug-in electric vehicles were on the rise.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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