DOE Loan Program Patronage Comes Under Attack
It’s been a bad week for the Department of Energy’s Advanced Technology Vehicle Manufacturing Loan program. First, the GAO slammed the program for weak oversight and a lack of performance metrics and professional expertise, and now the Center for Public Integrity and ABC News are unwinding a web of patronage that appears to be taking advantage of the program’s many shortcomings.
The investigation centers around Steve Westly, a fundraiser who “bundled” half a million dollars in donations to the Obama campaign, only to be given a spot on the DOE’s Energy Advisory Committee. From there, the CPI report alleges, Westly was instrumental in acquiring ATVM access for Tesla, a company that Westly sat on the board of from March 2007 until December 2009. Loans were given to Tesla when Westly was still serving on the board, and his firm, The Westly Group, has made millions on the sale of Tesla stock since the firm’s IPO. And it seems that most of the DOE loan recipients have some kind of connection to one Obama fundraiser or another, like John Doerr, who backs Fisker, another ATVM loan recipient. Meanwhile, smaller firms allege that their requests for loans were simply ignored, and with the GAO knocking the program for treating applicants “inconsistently,” it seems that some kind of favoritism is afoot. But then, isn’t that how Washington works?
More by Edward Niedermeyer
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I honestly think those that got the loans have the best chance of succeeding, and yet they are still risky. Those smaller companies that didn't get loans really had no chance anyhow and would be a loss to the tax payer.
Early in the Obama administration the vetting process for appointees was so much more burdensome than it needed to be. The goal seemed to be to clearly distinguish the new administration from Bush's, which was dominated by a revolving door of industry lobbyists cycling in and out of regulatory positions. So what happened to Obama? I suppose you could brush it off as "Washington ethics" and move on. However, I suspect that there are more nuances to this situation. Based on your summary of the article, Westly sounds like he should have been steered clear of. However, the correlation between campaign donations and receiving a loan sounds weak. Any advocate of "green" technologies wasn't going to be putting their money on McCain. One way we could start cleaning up the culture of corruption in Washington is by passing stricter campaign financing laws with strong public financing mechanisms. All too often elections in the US are bought by the highest bidder.