The U.S. Department of Energy's inspector general on Tuesday made an unprecedented call for a halt to the Biden administration's $400 billion energy loan program, warning officials were not following conflict-of-interest rules and that the program posed a “significant risk of fraud.” [emphasis, links added]
The news comes as the Department of Energy’s Loan Programs Office (LPO) There is a rush to loan billions of dollars to green energy companies before President Joe Biden leaves office in January.
The inspector general's criticism could halt the financing boom and prompt new congressional scrutiny of the loan program.
The loan office has already been criticized by Congress for handing out billions of dollars in loans to high-risk companies, some of which had previous financial or personal ties to office director Jigar Shah.
Inspector General Teri Donaldson said her office was conducting a months-long review of the loan program. Significant flaws in the department's conflict of interest procedures were discovered.
According to the memo, the LPO has not identified or reported potential conflicts between loan seekers and federal contractors hired by the department to review loans.
Donaldson calls for loan scheme to 'pause all loans and loan guarantee schemes' Until the LPO can ensure that the contracting officer and the contracting officer's representative comply with conflict of interest regulations.
Following the release of Donaldson's memo, Sen. John Barrasso (Wyo.), the top Republican on the Senate Energy and Natural Resources Committee, asked Energy Secretary Jennifer Granholm to immediately suspend the loan program.
“In its final days in office, the Biden administration has been throwing taxpayer dollars out the door with inadequate safeguards against fraud, waste and abuse. Energy Secretary Granholm should immediately halt the entire loan process until the department puts in place strict safeguards to protect American taxpayers. washington free beacon.
Inspector general says she issued emergency memo because she was concerned The LPO plans to finalize at least $22 billion in loans and loan guarantees next month “without ensuring compliance with conflict of interest regulations.”
In response to the Inspector General’s memorandum, Shah declined to put a moratorium on upcoming loans, noting that the memo did not report any direct examples of conflicts of interest.
Donaldson countered that the reason for this was The LPO “does not track information necessary to identify conflicts of interest.”
“Perhaps the most disturbing statement [LPO’s] “The LPO has not experienced any conflicts of interest over the past 15 years,” Donaldson wrote.
“The LPO appears to claim that as long as it does not compile, track, update or coordinate relationships, it can maintain 100% compliance across the LPO.”
Donaldson said her office is working on a larger report on its findings.
Inspector general spent more than a year reviewing loan program office, accused Billions of dollars in government loans were disbursed to politically connected recipients, including companies on the brink of bankruptcy and entities with ties to foreign adversaries.
The formerly small office, which has expanded its budget more than 2,200% under Biden, now has lending authority that rivals the size of the commercial loan portfolios of Wells Fargo and other international banks.
The office has been on a lending spree in recent weeks, scrambling to hand out cash ahead of President-elect Donald Trump's inauguration.
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