The U.S. Department of Energy’s (DOE) lax information requirements for recipients of the Biden-Harris administration’s home energy rebates have left the initiative prone to fraud and abuse, according to a report released Monday.
President Joe Biden’s 2022 Inflation Reduction Act appropriated roughly $4.3 billion in grants for states to implement tax rebate programs with the aim of encouraging consumers to buy electric appliances. Now, a report by the DOE’s Office of the Inspector General (OIG) has found the department’s State and Community Energy Program (SCEP) Office responsible for distributing the grants to U.S. states and territories failed to require states to independently confirm applicant income levels or even collect basic data such as social security numbers, leaving the program exposed to criminal exploitation.
“Most assuredly, the nearly $4.3 billion SCEP is granting to States under the Home Rebates Program will be a high-value target for individuals and criminal groups to exploit,” DOE OIG Teri Donaldson wrote in the report. “SCEP was not using Pandemic Response Accountability Committee (PRAC) best practices to implement an effective fraud prevention program.”
The OIG report found that SCEP’s failure to require states to validate applicants’ social security information could result in “double dipping,” in which applicants claim a rebate multiple times. It also found that SCEP allowing applicants to “self-certify” their income level left ample room for abuse since rebate amounts are partially tied to household income.
The DOE updated its guidance on income reporting in March 2024 after the OIG flagged its concerns with SCEP internally, telling states to cancel access to only allow self-certification for a limited set of applicants, such as those residing in disadvantaged communities or low-income census tracts, according to the report.
“DOE maintains that requiring collection of Social Security numbers is inappropriate in the context of this program. The Program employs numerous other data collection requirements that provide more robust fraud prevention without the risks presented by collecting SSNs,” a DOE spokesperson told the Daily Caller News Foundation. “DOE is committed to fraud prevention efforts as a fundamental component of grant management and proper stewardship of taxpayer dollars.”
An analysis of Internal Revenue Service data performed by the DCNF in August found people earning six figures were over three times more likely to claim the Biden-Harris administration’s residential energy tax credits. A separate January 2024 DCNF analysis found elite locales such as Nantucket and Martha’s Vineyard qualified as eligible for “low-income” electric vehicle (EV) subsidies under White House rules.
“It is clear that the tax credits in the Inflation Reduction Act primarily benefit wealthier Americans,” Ben Lieberman, senior fellow at the Competitive Enterprise Institute, previously told the DCNF regarding Biden’s residential home energy tax credits. “The regressive nature of these provisions flies in the face of the [Biden administration’s] environmental justice rhetoric.”
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