Obama Administration Agrees to Romney's Request of "Green" Auto Loan Review
October 31, 2011 3:30 PM
All DOE loans, including Fisker and Tesla loans will be reviewed
Republican 2012 U.S. Presidential hopeful Mitt Romney wrote a scathing opinion piece alleging that Tesla Motor Comp. (
) and Fisker Automotive, Inc.
obtained their loans through corrupt backdoor dealings
between the Obama administration and campaign donors like
Al Gore, a Fisker investor
. Mr. Romney called the loans high risk and called them an inappropriate use of government resources.
In response to that and other allegations regarding the Tesla and Fisker loans [
], the Obama administration has
a complete review by a third-party of all
Department of Energy
Aside from the various "green" automotive loans, the review will also encompass solar loans, including the
half billion dollars loaned
to failed solar startup Solyndra. President Obama expressed
no regrets about spending taxpayer money on that loan
in recent interviews.
The review will also encompass
nuclear energy loans
. These loans have received less scrutiny, as there's mutual support from both the Obama administration and Republicans for nuclear energy.
The review will last 60 days. For those hoping for a non-Washington face on the review process, they will be severely disappointed. The review will be conducted by Herb Allison, a former
Department of Treasury
employee who was the brains behind the Bush and Obama administrations' $700B Troubled Asset Relief Program (TARP) — a program that included the $85B USD auto industry bailout [
The "independent" review with will be headed by past Treasury official Herb Allison, who was the brains behind the TARP government bailout. [Source: PressTV]
During that time, the loan process will continue as normal according to DOE press secretary Damien LaVera. He comments, "The department will continue to perform due diligence on existing loan applications while this 60-day review is being conducted."
Chrysler Group LLC is currently waiting for word on whether its $3.5B USD loan request was approved as part of the $25B USD Advanced Technology Vehicle Manufacturing Program.
Chrysler is currently awaiting the verdict on its request $3.9B USD in "green" loans, which will be partially applied to building battery-free hydraulic hybrids.
[Image Source: Chrysler via Engadget]
Potentially on the chopping block is a $730M USD loan approved in July to the Dearborn-based North American arm of Russian steelmaker Severstal OAO (
), which is largely owned by a Russian billionaire.
House Oversight and Government Reform Committee
Rep. Darrell Issa
(R-Calif.) attacked the loan in
to DOE Secretary Steven Chu. In that letter, he points out that Severstal released statements indicating it had enough money to pay for the project itself.
Eight other projects are also in their final stages of approval, but have received less scrutiny.
So far, the DOE has allocated $9.2B of the $25B USD in auto industry loans. Of that, the most money went to Ford Motor Comp. (
received $5.9B USD in funding
to help finance
its Ford Focus Electric
and other hybrid/EV efforts. Next biggest was the $1.9B for Nissan Motor Comp., Ltd.'s (
), followed by the $1B USD for Tesla and Fisker.
Of course when debating the merits of loans three things must be kept in mind:
These are loans so they must be repaid with interest.
If the recipient goes out of business the government isn't guaranteed getting fully repaid.
If the recipient goes out of business, the government can attempt to recoup part of the funds in the bankruptcy/liquidation proceedings.
Congress will grill DOE Secretary Steven Chu about the loans on November 17.
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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