The Energy Department is defending its decision to award nearly $100 million to a major green energy company that has been investigated by two federal agencies and says it may be forced to declare bankruptcy.
ECOtality announced the company’s potential bankruptcy in a filing with the Securities and Exchange Commission (SEC) last week. It also revealed that it is under investigation by the Labor Department. The company was previously subject to an SEC investigation into alleged insider trading.
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DOE spokesman Bill Gibbons defended the agency’s decision to award ECOtality $99.8 million to build electric-vehicle charging stations around the country.
"The Energy Department’s grant to ECOtality was used for the installation and data collection of charging stations in cities across America where sales of plug-in electric cars are on the rise," Gibbons said in an email.
"Meant to establish the seeds of infrastructure needed to support a growing market for advanced vehicles, the company installed more than 12,500 charging stations in 18 U.S. cities — or approximately 97 percent of their goal," he noted.
Critics of the Obama administration’s federal subsidies for green energy projects claimed vindication.
"Today’s announcement is another failing grade on the Department of Energy’s long list of irresponsible decisions to subsidize green energy companies," said Rep. Lamar Smith (R., Texas), chairman of the House Science, Space, and Technology Committee, in an emailed statement.
"Taxpayers are tired of hearing about the administration wasting their hard-earned money on pet projects, and DOE must be held more accountable," Smith added.
The ECOtality award was integral to the Obama administration’s effort to put one million electric vehicles on the road by 2015.
By January of this year, DOE had retreated from that goal. "Whether we meet that goal in 2015 or 2016, that's less important than that we're on the right path to get many millions of these vehicles on the road," said then-Energy Secretary Steven Chu.
Chu’s chief of staff recently joined ECOtality’s board of directors. He cited the administration’s push for electric vehicles in his decision to join the company.
That push factored into ECOtality’s business decisions as early as 2008, when the company said in an SEC filing that Obama’s affinity for electric cars "will provide strong funding opportunities for us and our core technologies."