CBS news
written by AP staff
Wednesday April 24, 2013
WASHINGTON - The Energy Department did not realize for four months that troubled automaker Fisker Automotive Inc. had missed a crucial production target that was required as part of a half-billion dollar government loan, documents released Wednesday show. The mistake allowed Fisker to obtain an additional $32 million in government funding before the loan was suspended in June 2011.
The Obama administration did not make the suspension of the $529 million loan public until early last year, nearly eight months after it stopped making payments to Fisker and long after the Energy Department first warned that Fisker was not meeting milestones to protect taxpayers.
The administration's actions - or failure to act - came under sharp criticism from Republicans Wednesday at a hearing before the House Oversight and Government Reform Committee. GOP lawmakers accused the Obama administration of negligence and worse while Democrats dismissed the hearing as a "show trial" intended to embarrass the president.
"The committee's efforts to stoke false controversy by selectively leaking a few out-of-context documents just do not stand up to scrutiny," White House spokesman Jay Carney told reporters Wednesday.
But Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it was hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money.
"The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face," said Jordan, R-Ohio.
Jordan called the loan program "one of the most disastrously mismanaged and corrupt programs in U.S. history," a claim committee Democrats scoffed at.
Rep. Matt Cartwright, D-Pa., said the $192 million received by Fisker before the loan was suspended represents just 2 percent of an $8 billion loan program to boost electric cars and other advanced vehicles.
Even if Fisker goes bankrupt, as many expect, the loan program is on track to recoup 98 percent of its investment, Cartwright said.
"In the world outside the Beltway, anybody who exceeds expectations 98 percent of the time gets an A-plus, Cartwright said.
"Only in Washington would a $200 million loss be viewed as a success," Jordan shot back.
The oversight panel is looking into the federal loan to the troubled carmaker, which has laid off three-fourths of its workers amid continuing financial and production problems. Fisker has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.
Despite those losses and widespread reports that bankruptcy is imminent, the company's founder and namesake said Wednesday he is proud of its achievements.
Henrik Fisker told the House panel that "cutting edge technology" developed by the Anaheim, Calif.-based company could "pave the way for a new generation of American car manufacturing." Fisker said he is especially proud of the $100,000 Karma hybrid, which Time Magazine called one of the 50 best inventions of 2011.
Fisker has sold fewer than 2,000 Karmas, despite early projections of 11,000 sales per year.
Fisker, who resigned as board chairman in March, disputed claims by some critics that the company needed the federal loan to survive. He said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.
"At that time, we already had significant financial backing from private investors," Fisker said. In all, the company received more than $1 billion in private financing, he said.
Fisker denied that any political influence was used to obtain the loan or in negotiations over its terms. "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," Fisker said.
Republicans called the claim dubious and noted that Fisker investors include the actor Leonardo DiCaprio and John Doerr, a partner at the venture capital firm Kleiner Perkins who has served on an economic advisory board appointed by President Barack Obama.
Republicans also questioned why the company agreed to reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.
Vice President Joe Biden touted the plant in 2009 as a boon to his home state and predicted it would create billions of dollars in jobs.
Fisker told the panel that he chose the Delaware site because the GM plant was in good shape and had access to skilled workers and East Coast ports. As many as 60 percent of the cars the plant was to produce were targeted for export, Fisker said. The choice of Delaware "had nothing to do with the loan" or Biden, Fisker said.
Earlier, the committee released a document showing that the administration was warned as early as 2010 that Fisker was not meeting milestones set up by the government.
An Energy Department official said in a June 2010 email that Fisker's bid to draw on the federal loan may be jeopardized for failure to meet the goals.
Despite that warning, Fisker continued to receive money until June 2011, when the Energy Department halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones - including launch of the Karma hybrid - had been achieved, according to a credit report prepared by the Energy Department.
The December 2011 credit report said "DOE staff asked questions about the delays" in the Karma's launch "and received varied and incomplete explanations," leading to the suspension of the loan.
Aoife McCarthy, a spokeswoman for the Energy Department, said the June 2010 email was taken out of context.
"The document shows that one person at a meeting discussed the possibility that Fisker might not meet a financial commitment" required by the Energy Department, McCarthy said in an email. The department received the needed certification five days later and subsequently made the loan payment, she said.
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The Daily Mail
written by Don Surber
Sunday January 1, 2012
Crony capitalism not only is a pain in the national wallet, but products from crony capitalists pose a physical danger. Fisker Automotive — fronted by Democratic eco-millionaire Al Gore — received a half-billion federal “loan” 2 years ago to make luxury electric cars.
Not only was this a sweetheart from the Obama administration, but the deal financed the manufacture of unsafe electric lemons.
From the New York Times:
Fisker Automotive is recalling all 239 of its 2012 Karma luxury plug-in hybrid cars because of a fire hazard, according to a report filed with the National Highway Traffic Safety Administration. Prices on the 2012 model start at $103,000, including the destination charge.
In a report filed recently on the agency’s Web site, Fisker said some hose clamps were not properly positioned, which could allow a coolant leak. “If coolant enters the battery compartment an electrical short could possibly occur, causing a thermal event within the battery, including a possible fire in the worse case,” the company told the safety agency.
Fisker said the problem was discovered on Dec. 16, when workers at the Valmet Automotive assembly plant in Finland noticed coolant dripping. Fisker said it was not aware of any consumer complaints, warranty claims or “any other reports related to this condition.” It said fewer than 50 vehicles were in the hands of consumers.
So for $529 million, taxpayers received less than 50 automobiles sold (apparently) to people who can afford the $89,000 sticker price. The New York Times report failed to mention Al Gore’s connection to this dubious enterprise, but a Wall Street Journal on September 25, 2009, did:
WASHINGTON — A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California start-up Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California start-up focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
Add the Chevy Volt — another fire hazard when charging — and you have a nice pipeline from the Treasury to the wallets of the FOO (Friends Of Obama).
I love these liberal imbeciles who buy this global warming crap. They are snotty as they cite “science,” which is based on what is best questionable data (in the case of the Nobel Peace Prize winning 2007 IPCC report: outright lies). They repeat Al Gore’s lines about Big Industry opposing this, when in fact Big Business pockets many an alternative energy tax credit or other subsidy.
The only green jobs are the green that goes from the taxpayer into Democratic operatives such as billionaire George “Solyndra” Kaiser and Democratic hacks like Al Gore.
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Politico
written by Byron Tau
Monday February 6, 2012
In another setback for President Obama's clean energy loan programs, the recipient of more than a half-billion dollars in federal loans is laying off workers at their Delaware and California operations.
Delaware's News Journal reports that Fisker Automotive, a California-based electric car start-up company, is laying off an undisclosed number of staff to try to reserve enough capital in order to qualify for more federal help from the Department of Energy, according to a Delaware state development official.
"They're trying to preserve the cash that they have," said Alan Levin told the News Journal. "And unfortunately, until they meet the milestone that DOE continues to set … they're not able to access the additional capital that they need."
The company also came under fire last year for taking federal loans while producing cars in Finland. Company officials told ABC News at the time that "there was no contract manufacturer in the U.S. that could actually produce our vehicle." The company was working on reopening a shuttered General Motors plant in Wilmington to produce vehicles — an effort that top Obama administration officials lauded.
“While some wanted to write off America’s auto industry, we said no. We knew that we needed to do something different – in Delaware and all across the nation,” Vice President Joe Biden said about Fisker in Delaware in 2009. “We understood a new chapter had to be written, a new chapter in which we strengthen American manufacturing by investing in innovation. Thanks to a real commitment by this Administration, loans from the Department of Energy, the creativity of U.S. companies and the tenacity of great state partners like Delaware – we’re on our way to helping America’s auto industry reclaim its top position in the global market.”
“This is proof positive that our efforts to create new jobs, invest in a clean energy economy and reduce carbon pollution are working,” said Energy Secretary Steven Chu. “We are putting Americans back to work and reigniting a new Industrial Revolution that is paramount for the economic success of this country.”
The company received $529 million in loans to produce two lines of plug-in hybrid cars.
“Our loan guarantees have strict conditions in place to protect taxpayers. The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results. As has been widely reported, Fisker has experienced some delays in its sales and production schedule -- which is common for start-ups. As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America," DOE spokesman Damien LaVera said in a statement.
CORRECTION: An earlier version of this post mistakenly referred to loan guarantees rather than direct loans.
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