Admin Knew Fisker Was Struggling, Continued to Disburse Loan

Fisker's Karma car / AP
• April 24, 2013 8:36 am


The Obama administration knew embattled electric carmaker Fisker Automotive Inc. was struggling but continued to give the company money, according to new documents obtained by the Associated Press.

Fisker, which is thought to be on the precipice of bankruptcy, has not produced a car since last summer. The company was awarded a $529 million loan by the Department of Energy that later frozen in June 2011, but not before Fisker drew down $192 million of the loan.

In 2010, an official in the Department of Energy loan program wrote in an email that Fisker "may be in limbo due to a lack of compliance with financial covenants" as part of the loan, according to the AP:

Newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company's statements.

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 goals established by the department.

Despite that warning, Fisker continued to receive money until June 2011, when the DOE halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including the launch of the company's signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.

A department spokesperson told the AP that the email was taken out of context.

Earlier this week, Fisker missed a $10 million loan payment to the federal government. DOE subsequently disclosed that the government had seized $21 million from a Fisker reserve account earlier this month, and will apply that money to the loan.

Fisker still owes the federal government $171 million.

Executives from Fisker and an official from the DOE loan program will answer questions today in front of Congress about the company.