Inspector general launches criminal probe into more than 100 Energy Dept. loans

C.J. Ciaramella Contributor
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Solyndra is being investigated by the FBI, but that may just be the tip of the shovel-ready iceberg.

The Department of Energy is investigating more than 100 potential instances of criminal abuse of stimulus loan monies, according to the department’s Office of Inspector General.

In prepared testimony before the House Oversight and Government Reform Committee Wednesday, Energy Department Inspector General Gregory Friedman said his office has launched more than 100 probes into possible criminal activities related to the 2009 stimulus funds behind the loans.

Friedman said the investigations used “various schemes, including the submission of false information, claims for unallowable or unauthorized expenses, and other improper uses of Recovery Act funds.”

The investigations have already led to five criminal prosecutions and more than $2.3 million in recovered stimulus funds, Friedman said, including “a series of cases involving fictitious claims for travel per diem resulting in the recovery of $1 million alone in Recovery Act funds.”

Friedman’s office and the FBI are also investigating possible criminal activity related to Solyndra, the now-bankrupt solar company that received a $535 million loan from the Energy Department.

While Friedman declined to comment on the Solyndra investigation, he attacked the DOE loan program in general. (RELATED: Financial turmoil grips two more green companies receiving federal loan guarantees)

“The Loan Guarantee Program had not [been] properly documented and as such could not always readily demonstrate how it resolved or mitigated relevant risks prior to granting loan guarantees,” Friedman said.

The testimony was red meat for congressional Republicans who have assailed the Obama administration for the loan program, saying loans were rushed through without proper vetting to fit the president’s political agenda.

“We end up in a situation where we continue to throw good money after bad because we can’t stand to tell people it was bad policy, it was a bad program,” said Pennsylvania GOP Rep. Mike Kelly.

Friedman went on to criticize stimulus spending, specifically the Obama administration’s claim that it was sending money to “shovel-ready jobs.”

“Our reviews have identified a fairly consistent pattern of delays in the pace at which Recovery Act funds had been spent by grant and other financial assistance recipients,” Friedman said.

Friedman said the delays and abuse of stimulus funds are partially due to few “shovel ready” projects actually existing when the Recovery Act was launched in 2009.

“The concept of ‘shovel ready’ projects became a Recovery Act symbol of expeditiously stimulating the economy and creating jobs,” Friedman said. “In reality, few actual ‘shovel ready’ projects existed.”

“The concept of ‘shovel-ready’ projects was not realized, nor, as we now have confirmed, was it a realistic expectation,” he continued.

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