The office responsible for green technology loans and supercharged by the Biden administration could be prone to waste and abuse of taxpayer dollars, according to a new report from the Department of Energy’s (DOE) Officer of the Inspector General (OIG).
The DOE’s Loan Programs Office (LPO), which uses taxpayer funds to subsidize emerging green companies that may otherwise struggle to attract private sector investment, is of particular concern for the OIG given that its budget exploded to more than $400 billion under the Biden administration and for its possibly hastened due diligence process, the OIG wrote in its report. The OIG further identified a risk that the LPO may fund foreign adversaries, citing two since-cancelled loans worth a combined $400 million to entities with suspected links to foreign entities of concern.
“Most of the loan authority will expire from 2026 through 2030, meaning the LPO must build its portfolio with deals collectively worth hundreds of billions of dollars on accelerated timeframes,” the OIG wrote in its report.
“The pressure to beat these deadlines introduces the risk that the LPO will enter into loans it otherwise would not, absent the looming deadlines, because of insufficient time to conduct rigorous due diligence, to negotiate terms that could effectively mitigate the risks identified during the due diligence, and to consider alternative projects that might offer a more favorable risk profile,” the report cautioned.
DOE OIG Report on LPO by Nick Pope
“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 OIG stated about LPO. “With more than $400 billion of possible loans and guarantees, this is one of the largest financial risks facing the Department today.”
President Joe Biden’s legislative agenda — including the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, the Inflation Reduction Act and the Puerto Rico Energy Resilience Fund — juiced LPO’s war chest with large sums of cash to deploy to fledgling green companies. Those laws, as well as Congressional appropriations bills, cumulatively provided LPO at least $400 billion to dish out, according to the OIG report.
The Daily Caller News Foundation has covered LPO and its loan recipients in the past, including its conditional commitment to loan more than $1 billion to Entek, a company that makes electric vehicle components. Entek has supported the Cleantech Leaders Climate Forum, the “sister nonprofit” of a trade association that LPO chief Jigar Shah established before joining the Biden administration and a co-host of a 2023 conference organized with LPO.
The DOE did not respond immediately to a request for comment.
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