As the Department of Energy seized the last of Fisker Automotive‘s reserves in lieu of an unknown amount that it was due to repay this week, what’s left of the lame electric automaker clings to the slim hope it can survive.
While CEO Tony Posawatz and his team may need an intervention, a hearing before the House Oversight and Government Reform Committee yesterday revealed that DOE and committee Democrats (as well as those in the Obama administration) are hopelessly stuck in an alternate universe, where losing millions of taxpayer dollars is considered a good record. Republicans had called officials from the company – including founder Henrik Fisker, as well as administrators of DOE’s loan program – to explain the logic that went into granting $529 million to a fledgling, unproven car company that targets an ultra-rich clientele.
Democrats attempted to dismiss the hearing as a “show trial” to embarrass the president, but the facts kept getting in the way of their trivialization efforts.
“The committee’s efforts to stoke false controversy by selectively leaking a few out-of-context documents just do not stand up to scrutiny,” said White House spokesman Jay Carney.
A Democrat committee member, Rep. Matt Cartwright of Pennsylvania, downplayed the loss of $192 million in taxpayer money (the amount Fisker received before DOE halted the loan payouts) compared to the overall $8 billion of stimulus money that backed the electric vehicle program.
“In the world outside the Beltway,” Cartwright said, “anybody who exceeds expectations 98 percent of the time gets an A-plus.”
That boast echoed one by DOE two weeks ago, when the hearing was scheduled.
“Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact,” a spokeswoman told the Wall Street Journal.
Those remarks indicate it’s probably impossible to shame the Obama administration and Congressional Democrats about the embarrassing performance of their management of the stimulus, especially when it comes to the green energy sector. Failures such as Solyndra, Abound Solar, A123 Systems, Ener1, Beacon Power, LG Chem and others already mar their record, but the spectacle of Fisker’s failure reaches new levels. While Solyndra accounted for a far greater loss in terms of dollars, the tanking of the Anaheim-based maker of one lousy electric car – the Karma – represents an amazing fusion of futility and cronyism that may never be matched again.
Fisker is one of several molted feathers fallen from Energy Secretary Steven Chu‘s soon-to-be-removed cap. As NLPC has reported ad nauseum, the authorities over DOE’s Loan Guarantee Program saw fit to grant Henrik Fisker a $529 million sum just because he 1.) designed cars for Aston Martin and BMW; 2.) was backed by hundreds of millions in private support from Democrat cronies; and 3.) was going to produce a “green” car, even though he’d never headed such a company in his life and Fisker hadn’t built anything en masse to that point. Add to that the fact that he had celebrities Al Gore and Leonardo DiCaprio on board as early customers, and the powerhouse Silicon Valley investment firm Kleiner, Perkins, Caufield and Byers stroking DC egos with campaign cash and lobbying sway, and the DOE Loan Program Officers (DOELPOs?) couldn’t resist the sizzle.
Then reality set in with mishaps such as recalls, production failures, vehicle fires and bad reviews. Yet despite this stunningly bad record, Obama and the Defender-crats chalked it up to routine losses in an investment firm’s portfolio, rather than the coercively extracted resources that once belonged to taxpayers.
“Only in Washington would a $200 million loss be viewed as a success,” said Republican Rep. Jim Jordan of Ohio, who chairs the Oversight subcommittee on economic growth and regulation.
“The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place,” Jordan said at another point in the hearing yesterday, “and what they are going to do to minimize the loss that taxpayers face.”
But the president’s people don’t think they did anything wrong, and therefore they consider the losses to the taxpayer acceptable. According to the Associated Press, former acting director of the Loan Program Office’s electric vehicle program Nicholas Whitcombe said DOE acted “decisively” to protect taxpayer interests after Fisker Automotive failed to reach goals per its agreement.
Unfortunately the facts again prove the Obama administration wrong, as AP reported. Documents released yesterday showed that four months passed before DOE recognized that Fisker had fallen short of its milestones, which allowed the company to access an additional $32 million in taxpayer support before the loan’s June 2011 suspension.
As for Mr. Fisker, he testified that an Energy Department official in 2008 invited him to apply for the government loan (thus inspiring Democrats to bellow “Bush did it too!”), which he said he didn’t really need because he (and presumably Kleiner Perkins) had already raised millions of dollars in private investment.
“I am not aware and do not believe that any improper political influence was used in connection with the company’s loan application or subsequent negotiations with the Department of Energy,” Mr. Fisker told the committee yesterday.
So he’s saying the taxpayer money was forced on him and his company. I guess that’s why Fisker and Kleiner Perkins together spent nearly $900,000 in 2009 and 2010 to lobby Congress and the administration about the loan program and other renewable funding schemes. Once again, the facts undermine what comes out of the mouths of nearly every enthusiastic backer of President Obama’s green energy “stimulus” program.
Meanwhile DOE on April 11 sucked $21 million out of the already-gasping company to pay back a portion of the $192 million. According to two Reuters sources, the amount due on Monday was $10 million, and Fisker had less than $30 million (a figure that had been reported previously) on hand after it had fired three-quarters of its work force, before DOE confiscated its reserves.
“Given the obvious difficulties the company is facing,” said DOE spokeswoman Aoife McCarthy, “we are taking strong and appropriate action on behalf of taxpayers.”
Failure is success; millions in financial losses are good; heavy lobbying and campaign contributions are disinterest; and weak and late really means “strong and appropriate” action. I’m sure it all makes perfect sense in the alternate world the Obama administration and renewable energy advocates dwell in.
[First published at National Legal and Policy Center]