The Biden-Harris administration awarded at least $400 million to energy companies with "suspected ties to foreign entities of concern," according to an inspector general report published on Monday.
The security failure is part of a larger vetting problem within the Department of Energy. The agency's grant and loan authority has ballooned to over $400 billion under the Biden administration, the report found.
"There is tremendous risk to the taxpayer from the recent historic expansions of Department of Energy programs," DOE inspector general Teri Donaldson's office states in the report.
"Congress did not intend to benefit our foreign adversaries. Avoiding such benefits, however, will require careful vetting of grant and loan applicants for foreign adversary entanglements, which is something not historically done by the Department."
At least two unnamed companies with foreign adversarial links were approved for a combined $400 million in funding, according to the report. The DOE’s security vetting office, which was created under congressional pressure in 2023 to screen out such national security risks, "failed to prevent applicants with such prohibited foreign adversary connections from being approved," according to the report.
The DOE canceled the funding only after the inspector general informed officials about the companies’ prohibited links, according to the report. The inspector general’s office did not respond to an inquiry about the identities of the two companies.
The news comes after Congress raised concerns about the DOE’s approval of a $200 million grant to Microvast, a battery company that primarily operated out of China, the Washington Free Beacon first reported in December 2022. After months of criticism from lawmakers, the department canceled that grant last year.
In August, the DOE also terminated a $100 million grant to Applied Materials, a company that is under federal criminal investigation for allegedly shipping products to a state-owned Chinese chipmaker in violation of export laws. The DOE said the decision to end the grant was mutual, according to Cardinal News.
The inspector general report also warned that the DOE doesn’t have the resources to properly vet funding applicants, which could lead to officials issuing high-risk federal loans that leave taxpayers on the hook for billions. President Joe Biden's flagship spending bills—including the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act—have increased the DOE’s loans and grants budget by hundreds of billions of dollars since 2021.
"All of these risks compound one another in a manner that, ultimately, creates a heightened risk of loan default with the taxpayer picking up the bill," the inspector general report states. "With more than $400 billion of possible loans and guarantees, this is one of the largest financial risks facing the Department today."
Congress has raised similar concerns about the DOE's loan programs office. The loan office's director, Jigar Shah, faced questions from lawmakers after his office approved funding for companies with which he had prior financial and professional links.
Last month, the loan office finalized an $861 million loan to AES Marahu, a subsidiary of AES Corporation. Before joining the Biden administration, Shah sold his solar company, sPower, to AES for $850 million, the Free Beacon reported.
With President-elect Donald Trump weeks away from taking office, the Biden-Harris administration has rushed to finalize tens of billions of dollars worth of green loans. The quick pace has prompted congressional concern that the spending could lead to "waste and abuse."
"Now that the election is over, the Biden administration wants to triple the amount of money passed out to politically connected firms," Senate Energy and Natural Resources Committee ranking member John Barrasso (R., Wyo.) told the Free Beacon. "Congress and the incoming Trump administration will act to ensure taxpayer dollars aren't wasted on insider payoffs and green pipe dreams."