Did Obama Administration Play Favorites With Energy Loans?


Top Energy officials told ABC News the loan program took time to get rolling, but is now overseen by 175 professionals who rigorously scrutinize applicants, and attempt to get behind companies with the best hope of creating sustainable jobs.

But efforts to analyze the criteria the Energy Department has used to select the companies that have received federal loans or loan guarantees have proved challenging, even for government auditors. Last summer, the Government Accountability Office issued an unusually blunt assessment of the Energy Department's loan program. The report concluded that the department had "treated applicants inconsistently, favoring some and disadvantaging others."

The author of the GAO report, Franklin Rusco, told ABC News that Energy Department officials used an opaque process to select loan recipients. He said the agency could not, or would not, explain why some companies were given a quick green light for approval, while others waited years for a response.

"I think it's problematic for [the Department of Energy]," Rusco said. "I think they need to have a systematic, transparent and equitable process. And I think if they're not seen to have that, it's going to create issues, it's going to create perception problems. And there may be real problems underlying this as well that we haven't uncovered yet."

A principal complaint about the loan program has been its failure to distribute the bulk of the money Congress gave to the Energy Department to help stimulate the economy. The $25 billion program to jumpstart the development of electric cars, which was first funded in 2008, has so far loaned about $8 billion to five companies, with applications from more than 100 other companies still pending.

Frustrations have simmered in many quarters, but have been particularly heated among the entrepreneurs who are vying to create the first commercially viable electric car. James Taylor, CEO of Ohio's Amp Electric Vehicles, summed up those feelings in a recent interview with Edmunds.com. "These are companies trying to get off the ground and are just like us, starving for cash, looking for investors. It just seems a shame. All that money is there to be had," Taylor said. "For some reason, [the government money] is not falling through the funnel and getting out to us."

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But one of the major investors in the new technology who is finding success getting the money through the funnel is Steve Westly.

Westly declined repeated requests from ABC News for an interview, on or off camera. When approached to be interviewed while waiting to enter an Obama event in Washington, Westly ignored questions until a Democratic National Committee staff member was able to jump him to the front of the line and shuttle him past a U.S. Secret Service checkpoint.

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