Taxpayers lose $139 million on Fisker Automotive loan
Happy Thanksgiving from the Obama administration. The Energy Department has sold off its $192 million loan guarantee to Fisker Automotive to Chinese billionaire Richard Li for $25 million — the biggest taxpayer loss on a green loan since the failure of Solyndra.
The Energy Department will announce the “selling of the promissory note” to Hybrid Tech, which is owned by Chinese billionaire Richard Li, according to sources familiar with the sale. The DOE sold the loan to Li for $25 million after lending the financially troubled green automaker a total of $192 million since 2009.
“Once again, American taxpayers are losing out to foreign investors due to the Obama administration’s failed green energy policies. Time after time this administration has fumbled the ball with their attempts to pick winners and losers when it comes to American energy,” House Energy and Commerce Committee vice chairman Marsha Blackburn, a Tennessee Republican, said in a statement to The Daily Caller News Foundation.
“As a result of President Obama’s misguided policies, the Department of Energy Loan Guarantee program is quickly becoming a highly utilized stimulus program for foreign investors,” she added.
It was reported last month that Li and the Obama administration were ironing out the details of the Fisker loan sale after the Energy Department had completed its auction. Li’s purchase of the government’s loan represents the second acquisition of an Obama-backed green energy company by Chinese investors. Earlier this year, the Chinese auto parts conglomerate Wanxiang Group bought the electric car battery maker A123 Systems, renaming the company B456.
Including the $25 million loan sale, the DOE has recovered only $53 million of the original $192 million disbursed — netting taxpayers a $139 million loss.
Fisker was awarded a $529 million loan guarantee by the Obama administration in 2009 to produce a luxury hybrid car, the Karma, which sold for a $103,000 per unit. However, failure to meet Energy Department benchmarks to receive funding resulted in the company losing its loan guarantee in 2011. The company drew down on $192 million before having its federal funding pulled. The Obama administration seized $21 million from the company in April to help repay taxpayers for its loan.
Earlier this year, reports came out that Fisker had violated its loan agreements multiple times before being cut off by the Obama administration in 2011. Bloomberg reported that Fisker’s technical defaults began in 2011 partly due to “lower-than-required earnings before interest, taxes, depreciation and amortization, and failing to meet a production milestone of at least 11,000 vehicles sold to dealers for an average of $87,500 by Sept. 30, 2011.”
Fisker Karma also became the car of choice for come celebrities and environmental activists. The car has been sported by Al Gore, Justin Bieber and Leonardo DiCaprio.
Fisker backers were also heavily involved in lobbying the Obama administration and Congress on green energy programs. The venture capital firm Kleiner, Perkins, Caufield and Byers — where Gore is a partner — was a seed investor in Fisker and spent $400,000 in 2009 and 2010 on lobbying. The firm lobbied in favor of the stimulus bill that handed out $90 billion for green energy programs.
The Energy Department did not respond to TheDCNF’s request for comment.
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