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Repeating History: Obama Administration Ignored Warning Signs On Another Green Energy Company

- November 8, 2013

The Department Of Energy Failed To Disclose Concerns That ECOtality, A Green Tech Company Awarded $135 Federal Funding, Was Headed Toward Bankruptcy. "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." (Josh Hicks, "Energy Dept. Failed To Report Concerns As Green-Tech Firm Was Heading For Bankruptcy," Washington Post , 11/7/13)

ECOtality Is Still Due To Receive $26 Million In Funding. "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 the agency has suspended 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." (Josh Hicks, "Energy Dept. Failed To Report Concerns As Green-Tech Firm Was Heading For Bankruptcy," Washington Post , 11/7/13)

The Administration Knew As Early May That ECOtality Was Not On Schedule To Meet An Important Milestone. "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." (Josh Hicks, "Energy Dept. Failed To Report Concerns As Green-Tech Firm Was Heading For Bankruptcy," Washington Post , 11/7/13)

Inspector General Gregory Friedman: "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." "'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." (Josh Hicks, "Energy Dept. Failed To Report Concerns As Green-Tech Firm Was Heading For Bankruptcy," Washington Post , 11/7/13)

ECOTALITY, WHICH RECEIVED OVER $100 MILLION IN STIMULUS FUNDS, FILED FOR BANKRUPTCY IN SEPTEMBER

In September 2013, ECOtality, Inc. Filed For Bankruptcy. "On September 16, 2013, ECOtality, Inc. (the 'Company') and its U.S. subsidiaries (collectively with the Company, the "Debtors") each filed a voluntary petition for relief (the 'Bankruptcy Filing') under chapter 11 of title 11 of the United States Code (the 'Bankruptcy Code') in the United States Bankruptcy Court for the District of Arizona (the 'Bankruptcy Court'). The Debtors have proposed to jointly administer their chapter 11 cases under the caption In re Electric Transportation Engineering Corporation, dba ECOtality North America , Case No. 2:13-bk-16126-RJH (the 'Chapter 11 Case')." (ECOtality, Inc., Form 8-K, Filed 9/16/13)

  • In 2010, ECOtality Was Subpoenaed By The S.E.C. For Charges Of Insider Trading. "A company awarded $126.2 million in stimulus taxpayer funds from the U. S. Department of Energy is under investigation for insider trading according to a federal subpoena obtained by CBS News. The company, San Francisco-based Ecotality, makes and installs chargers for electric cars. The company received a subpoena from the Securities and Exchange Commission in October of 2010." (Laura Strickler, "Stimulus Receipient Under Investigation For Insider Trading," CBS News, 3/22/13)

THIS IS NOT THE FIRST TIME THE OBAMA ADMINISTRATION HAS IGNORED WARNING SIGNS OF A TROUBLED GREEN ENERGY COMPANY

The Obama Administration Turned A Blind Eye To The Warning Signs Surrounding Now-Defunct Solyndra

According To Kelly Colyar Of The OMB, Then-White House Chief Of Staff Bill Daley Had Been Briefed About OMB's "Reservations About The Prospects Of The Company And DOE's Proposal" To Restructure The Solyndra Loan. "You may recall that DOE announced in March that they had restructured the Solyndra loan. Prior to this restructuring, OMB staff expressed reservations about the prospects of the company and DOE's proposal. The issue was discussed with the NEC and the Chief of Staff." (Kelly T. Colyar, E-mail To Richard A. Mertens Et. Al, f. 732, 8/11/11)

Then Chief Of Staff Rahm Emanuel Pressured The OMB To Speed Up The Approval Of Solyndra's Loan, A Staffer Responded "I Would Prefer That This Announcement Be Postponed. . . . This Is The First Loan Guarantee And We Should Have Full Review With All Hands On Deck To Make Sure We Get It Right." "In one e-mail, an assistant to Rahm Emanuel, then White House chief of staff, wrote on Aug. 31, 2009, to OMB about the upcoming Biden announcement on Solyndra and asked whether 'there is anything we can help speed along on OMB side.' An OMB staff member responded: 'I would prefer that this announcement be postponed. . . . This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right.'" (Joe Stephens and Carol D. Leonnig, "White House Pressed On $500 Million Loan To Solar Company Now Under Investigation," The Washington Post, 9/13/11)

Then OMB Director Jack Lew Let The "Refinancing Move Forward Without Intervening," Despite Warning From OMB Analysts That The Solyndra Restructuring Plan "Might Violate The Law." "The House energy committee is expected to release the results of its 18-month investigation into Solyndra this week. Its report, parts of which were obtained by The Washington Post, suggests that then-OMB Director Jack Lew let the refinancing move forward without intervening, even though some OMB analysts thought a refinancing plan that favored private investors might violate the law. Lew is now White House chief of staff." (Joe Stephens and Carol D. Leonnig, "White House Analyst Warned Saving Solyndra Could Cost More Than Letting It Fail," The Washington Post , 8/1/12)

Government Accountability Office: "The Administration Didn't Do Its Due Diligence" On The $535 Million Loan For Solyndra. "It's not his statements the administration will regret; it's the loan guarantees. The President was celebrating $535 million in federal promises from the Department of Energy to the solar startup. The administration didn't do its due diligence, says the Government Accountability Office. ' There's a consequence if you don't follow a rigorous process that's transparent,' Franklin Rusco of GAO told the website iWatch News."(Scott McGrew, "Solyndra Filing A Disaster For Obama," NBC Bay Area News, 8/31/11)

  • DOE's Inspector General Found That The Loan Guarantee Program Couldn't Always Demonstrate That They Resolved The Companies' Risks Before Giving Out The Loans. "Concerns about the program and its risk controls were raised several times by the Energy Department's inspector general, Gregory Friedman. In a March 2011 report, Mr. Friedman said his office 'found that the Loan Guarantee Program could not always readily demonstrate, through systematically organized records, including contemporaneous notes, how it resolved or mitigated relevant risks prior to granting loan guarantees.' A report in 2009 also faulted the loan-guarantee program's controls." (Deborah Solomon, "Solyndra Said To Have Violated Terms Of Its US Loan," The Wall Street Journal, 9/28/11)

"Abundant Red Flags" And "Glaring Warning Signs" Surrounded The Solyndra Loan

"[A]gain And Again, The Obama Administration Pressed Forth In Support Of Solyndra In The Face Of Glaring Warning Signs Sent Up From Even Its Own Staffers." (Ronnie Greene And Matthew Mosk, "Obama Administration Agreed To Solyndra Loan Days After Insiders Foresaw Firm's Failure," iWatch News, 9/14/11)

"[O]bama's Energy Department Pressed Forth In The Face Of Abundant Red Flags In Awarding Its Maiden Green Energy Financing." "An iWatch News dissection of the financing - based on records, interviews and documents obtained under the Freedom of Information Act - shows that Obama's Energy Department pressed forth in the face of abundant red flags in awarding its maiden green energy financing. Money approved - even as outside rating agencies assessed the company as speculative." (Ronnie Greene, "Recurring Red Flags Failed To Slow Obama Administration's Race To Help Solyndra," iWatch News, 9/13/11)

OMB Had "Deep Reservations" About The Solyndra Loan . "The emails also show deep reservations from analysts at the Office of Management and Budget about the decision to loan $535 million to Solyndra -- reservations that have since been justified." (Matthew Mosk And Ronnie Greene, "Obama on Solyndra: 'Hindsight Is Always 20/20,'" ABC News, 10/3/11)

March 10, 2009: WH Budget Analyst Said Solyndra Is "NOT Ready For Prime Time" "'This deal is not ready for prime time,' one White House budget analyst wrote in a March 10, 2009 email, nine days before the administration formally announced the loan." (Matthew Mosk, Brian Ross And Ronnie Greene, "Emails: Obama White House Monitored Huge Loan to 'Connected' Firm," ABC News & iWatch News, 9/13/11)

Obama's Energy Department Knew In August Of 2009 That Solyndra Would Run Out Of Money In September 2011, Leaving Taxpayers On The Hook. "On August 20, 2009, an Energy Department staffer examining a pending loan to a California clean energy start-up came to a startling conclusion: The company would run out of money by September 2011. The government would, in effect, be placing taxpayers on the hook for a business likely to founder." (Ronnie Greene And Matthew Mosk, "Obama Administration Agreed To Solyndra Loan Days After Insiders Foresaw Firm's Failure," iWatch News, 9/14/11)

  • "Still, Things Moved - And Fast." (Ronnie Greene And Matthew Mosk, "Obama Administration Agreed To Solyndra Loan Days After Insiders Foresaw Firm's Failure," iWatch News, 9/14/11)

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