Department of Energy officials had a rough day on Capitol Hill on Thursday as lawmakers and the department’s own watchdog accused them of lax oversight of billions of dollars in climate spending.
DOE Inspector General Teri Donaldson told the Senate Energy and Natural Resources Committee the agency was at extreme risk of fraud and financial mismanagement because of a mandate to spend Inflation Reduction Act and infrastructure bill money quickly.
“We have massive amounts of money, all of these things happening at once create a level of risk that may candidly be described as unprecedented,” said Donaldson.
Donaldson said she was “gravely concerned” DOE will dole out significant sums of money to companies controlled by adversaries like China and Russia.
Even some Democrats, usually less inclined to go after the Biden administration over spending mandates they support, were concerned by the stark picture Donaldson painted.
“Some of the testimony we just heard sounds like we’re just throwing caution to the wind,” said Chair Joe Manchin (D-W.Va). “Just gonna throw the money out there.”
David Crane, undersecretary of Energy for infrastructure, and Jigar Shah, head of DOE’s loan office, appeared at the hearing and defended the agency’s work.
“The Department of Energy has an ability to do due diligence on these projects that many private sector banks don’t have, because we have access to the 10,000 engineers, scientists and experts,” Shah said. “The average due diligence process for loan programs office is over 12 months.”
But their efforts did not quell lawmakers concerns and, in some cases, anger. Here are four takeaways:
Shah lambasted on ethics
Republican lawmakers slammed Shah, head of DOE’s $400 billion Loan Program Office, over his interactions with potential loan applicants.
Before the hearing started, ranking member John Barrasso (R-Wyo.) and House Energy and Commerce Chair Cathy McMorris Rodgers (R-Wash.) sent a letter highlighting ethics concerns regarding Shah’s relationship with the Cleantech Leaders Roundtable, a trade association Shah founded.
Rodgers and Barrasso say the group participates in a “pay-to-play” scheme for clean energy companies because their access to Shah could influence DOE decisions.
Barrasso mentioned a $3 billion loan to Sunnova Energy, a solar company led by a member of Cleantech Leaders’ board of directors.
“Mr. Shah has reportedly been a guest speaker at at least 10 Cleantech-sponsored events, and at these events, if you’re member of the group that he founded, you get special access to him,” said the Wyoming Republican.
“My concern is this could be the next Solyndra, which was $500 million, and this is $3 billion,” Barrasso said during the hearing, referencing the failed solar company that received a DOE loan during the Obama administration.
Sen. Josh Hawley (R-Mo.) said Shah should not attend events where people pay to get access to him or to hear him speak.
“You’re the director of one of the loan programs office,” Hawley said. “People who want to get loans from the government are paying to see you, and you think that that’s fine.”
Shah said it’s his job to convince clean energy companies to apply for loans and that a board of DOE career staff ultimately makes the decision on who gets loans, not him.
“I’m trying to figure out what access they’re paying for, since I don’t make any decisions on which loans we actually underwrite or approve,” Shah said. “I’m more accessible than a ham sandwich.”
Donaldson concerns
Donaldson’s fiery testimony was, in part, a plea to senators for more funding to help her office better oversee the unprecedented funding from climate legislation.
“As we sit here today, I am the poorest inspector general in the…
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