Calls Grow To Suspend Biden’s Energy Loan Program Amid Fraud Concerns
The Department of Energy’s inspector general has called for an emergency halt to the Biden administration’s $400 billion energy loan fund, citing a “significant risk of fraud” and lapses in oversight. The Loan Programs Office (LPO), which has been rushing to approve billions in green energy loans, faces criticism for failing to enforce conflict-of-interest rules.
Inspector General Teri Donaldson’s memo warns that the LPO has not identified or tracked relationships between loan applicants and federal contractors. “The LPO does not track the information necessary to identify conflicts of interest,” Donaldson wrote, raising alarms about $22 billion in pending loans set to close before Biden leaves office.
NEW: The Department of Energy's inspector general is calling on the Biden admin to halt its rapid-fire green energy loan program.
The IG says the program "poses a significant risk of fraud, waste, and abuse" and notes that the DOE has failed to *track conflicts of interest.* pic.twitter.com/UDISwmZ15S
— Thomas Catenacci (@ThomasCatenacci) December 17, 2024
Republicans in Congress, including Sen. John Barrasso (R-WY), have demanded Energy Secretary Jennifer Granholm suspend the program immediately. Barrasso slammed the administration for “shoveling taxpayer money out the door” without adequate safeguards.
The LPO has faced accusations of awarding high-risk loans to companies with ties to its director, Jigar Shah. The inspector general noted recent approvals, including an $861 million loan to AES Marahu, a subsidiary of a company Shah previously worked with, and a pending $1.5 billion loan to Plug Power, where Shah was a major investor.
Despite these concerns, Shah has resisted pausing the program, arguing that no specific conflicts of interest have been identified. Donaldson countered that the absence of reported conflicts is due to the LPO’s failure to track such information.
The LPO, which has expanded significantly under Biden, now oversees a lending portfolio comparable to that of major commercial banks. Donaldson’s office is finalizing a detailed report expected to shed further light on the program’s vulnerabilities.