Bankrupt energy firms get millions in tax dollars, execs receive large payouts
But according to the Center for Public Integrity (CPI) and ABC News, top executives at many DOE-loaned companies received huge bonuses and payouts while their firms dealt with dire financial situations.
When CPI and ABC confronted the Department of Energy about this practice, the agency responded, saying it was troubled by the practice and would convey this to loan recipients.
Jen Stutsman, an Energy Department spokeswoman, said, “We don’t begrudge companies or their executives for their success, but it is irresponsible for executives to be awarded bonus compensation when their workers are losing their jobs.”
While the DOE doesn’t set the salaries and the benefits of the companies it funds, the Obama administration argues that the green energy movement is a way to stimulate the economy and aid the environment.
The administration does, however, admit that some investments in new “game-changing” technologies don’t work out.
This is a more optimistic outlook than one from the watchdog group Citizens Against Government Waste.
“Giving a bonus to the executives under these circumstances is rewarding failure with our money with no chance of getting it back,” said the group’s spokeswoman, Leslie Paige.
“Taxpayers need some representation here. They didn’t really get it.”
The failed green energy firms have also drawn the ire of some members of Congress, who are troubled that they would pay bonuses at all, especially after laying off workers.
“The purpose of our grants for energy or almost any other grant of government is for the purpose of innovation. It’s not for the purpose of feathering the nest of a private company executive,” said Republican Iowa Sen. Chuck Grassley.
Companies like Beacon Power and EnerDel, an Ener1 subsidiary, gave their top executives large bonuses, courtesy of U.S. taxpayers, even while they were seeing trouble on the horizon.
Securities and Exchange Commission records show that in March 2010, the energy storage company Beacon Power Corp., which received an Energy Department loan in 2009, paid cash bonuses of $259,285 to three executives — partly due to progress made acquiring the $43 million energy loan in the first place.
In October, Beacon Power filed for Chapter 11 bankruptcy.
In 2009, Vice President Joe Biden hailed the lithium-ion battery system maker EnerDel’s government-funded expansion as one of the “100 Recovery Act Projects That Are Changing America.”
EnerDel received a $118.5 million energy grant in August 2009. Two months after a visit from Biden, EnerDel parent company Ener1 paid $725,000 in bonuses to three executives, including $450,000 to then-CEO Charles Gassenheimer. Ener1 filed for Chapter 11 bankruptcy protection in January 2012, citing $73.9 million in assets and $90.5 million in debt.
At least six Energy Department loan and grant recipients, including electric car maker Fisker Automotive, electric-car battery maker A123 Systems, and Colorado-based Abound Solar have laid off workers or suffered financially.
A123 Systems also increased its top executives’ compensation after a layoff of 125 employees losses of $172 million during the first three quarters of 2011.
Obama administration officials continue to support green energy subsidies. “There were going to be some companies that did not work out,” the president said.
“All I can say is the Department of Energy made these decisions based on their best judgments.”
Still, Citizens Against Government Waste reports that a total of 20 DOE-backed energy firms have run into financial trouble, including layoffs, financial losses and bankruptcies.
Even the Chevy Volt, an electric car that Obama himself expressed interest in buying, ceased production for weeks due to lack of demand for the trumped up “green” car. The National Journal described the announcement as a “huge embarrassment for a president who in part rescued GM in order to make what the president claims is the Car of the Future.”
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