Energy Secretary Jennifer Granholm told a Senate committee the Department of Energy is still considering giving a $200 million grant to Microvast, a China-based lithium battery company, despite months of pushback from Congress.
"That particular award is still under negotiation," said Granholm during a Senate Energy and Natural Resources committee hearing on Thursday, adding that the DOE is "very vigilant about making sure that no taxpayer dollars goes to any state owned enterprise or Chinese influenced company."
It was the first time Granholm has faced in-person questions from Congress over the proposed award. Lawmakers have urged the DOE to drop the grant, noting that the infrastructure law funding is intended to bolster American energy production and prevent federal dollars from going to Chinese entities.
The hearing also comes days after DOE’s top watchdog, Inspector General Teri Donaldson, warned Congress that her office is "woefully underfunded" and doesn’t have the resources to properly investigate the department’s spending, including "those big fraud cases that we all know are coming just because this is a lot of money moving fast."
The DOE has defended the proposed grant, saying that Microvast is headquartered in Texas and the money would be used to build a battery separator facility in Tennessee. According to Microvast’s financial records, the company's operations are primarily based in China and the Chinese government "exerts substantial influence" over its business activities, the Washington Free Beacon first reported last year.
During the hearing, Sen. John Barrasso (R., Wyo.) noted that the majority of Microvast’s revenue comes from China and just 1 percent from the United States.
Barrasso also cited a statement from a Chinese government entity that said it "successfully recruited Microvast’s CEO to return from the United States to China under their talent program." China’s talent recruitment programs are often a cover for trade secret theft and economic espionage, according to the FBI.
"The CEO is a participant in the Chinese Communist Party talent program," said Barrasso. "Can you assure us today that you will not go forward with the $200 million award to Microvast or any other company under such significant Chinese influence?"
Granholm declined to rule it out, saying the DOE is still conducting due diligence on the grant and "we'll get back to you on the final conclusions on that."