WASHINGTON (AP) – A veteran Wall Street executive who performed an independent review that exonerated the Obama administration’s program of loans to energy companies contributed $52,500 to re-elect President Barack Obama in the months since completing his work, according to an Associated Press review of campaign records. The executive defended the integrity of his conclusions and said he decided to donate to Obama after his work was finished.
The campaign contributions to Obama started just weeks after Herbert M. Allison Jr., in congressional testimony in March, minimized concerns that the Energy Department was at high risk in more than $23 billion in federal loans awarded to green energy firms. Two weeks later, Allison began giving to the Obama campaign. His contributions to Obama and the Democratic National Committee totaled $52,500 by last month. Allison previously was the former head of the government’s mass purchase of toxic Wall Street assets.
Allison did not make any Obama donations during his four-month review of Energy Department loans, and he has a long history of working with and giving money to both political parties. However, Republican Party officials and congressional critics of the energy loans said Allison’s donations to Obama raise doubts about his objectivity and highlight his decision not to assess multimillion-dollar loans to two companies that later went into bankruptcy – the troubled Solyndra solar panel company and Beacon Power, an energy storage firm.
Allison’s report, completed in February and touted by the White House, acknowledged that the Energy Department could lose as much as $3 billion in loans, but it concluded that was far less than the $10 billion set aside by Congress for high-risk companies. The review did not assess the two bankrupt firms because those loans were no longer current. Allison told Congress that “DOE has negotiated protections in the loan agreements that enable it to cut off further funding and to demand more credit protection if projects do not meet targets.” He also urged the Energy Department to toughen its oversight.
Allison defended the integrity of his review in an interview with The Associated Press. He said that he did not make the decision to back a presidential candidate until after he had finished his work and that his selection was approved by Energy Department lawyers before he began his review last October to “ensure there was no hint of bias or conflict of interest.”
“I was on the record with the White House that this had to be completely independent review and they agreed,” he said Wednesday in a telephone interview from his home in Westport, Conn. “It didn’t hew to anybody’s political suasion, I think, and it had to be fully factual or it wouldn’t be credible.”
Allison said he made his decision to support Obama after he saw “his administration in action and decided that I believe broadly in the things he’s trying to accomplish.”
Allison gave $2,500 to the Obama campaign on March 29, two weeks after he testified to the Senate Energy and Commerce Committee about his review. In May, he gave $15,000 to the Obama Victory Fund, a joint fundraising committee that supports both the president’s re-election campaign and the Democratic National Committee. Allison gave the same amount to the fund again in June and then $20,000 more in July.
Allison has donated money to both parties, but his gifts in the past have tended to be much smaller than his current contributions, typically no more than $1,000 or $2,000, according to Federal Election Commission records. Allison explained his larger donations to the Obama campaign by saying “there’s a hell of a lot more money in politics today than in years past and I decided I could go this route.”
Allison has given to GOP figures such as Sen. Tom Coburn of Oklahoma and Sen. Chuck Grassley of Iowa, and to Democrats such as Rep. Carolyn Maloney of New York and former Nebraska Sen. Bob Kerrey. Allison’s presidential preferences have been mostly Republicans – Sen. John McCain of Arizona and former Sen. Bob Dole of Kansas. He also gave $2,300 to Obama in 2008, a year before Obama appointed Allison as an assistant treasury secretary.
The White House and the Obama campaign defended Allison, saying his donations did not taint his work as independent reviewer of the loans program. They pointed to his repeated hiring over the past two decades by Republican presidential administrations and GOP campaigns as justification that Allison had the independence to oversee troubled government programs.
“Mr. Allison was selected to do this study because of his relevant expertise and he is a public servant widely respected by Democrats and Republicans alike,” said Eric Schultz, a White House spokesman. Schultz added that Allison’s “analysis of the DOE loan portfolio was thorough and reliable as evident by additional independent reports affirming his findings.” The Obama campaign said, “Having completed an independent assignment does not cost him his right to continue participating in the political progress on behalf of many candidates, as he has in the past.”
A former Merrill Lynch executive, Allison worked for several Republican administrations and earned a reputation for tackling troubled federal programs. During McCain’s failed 2000 presidential run, he served as national finance chairman and was rumored to be McCain’s choice to become treasury secretary if he had won.
Allison was named by President George W. Bush to head Fannie Mae after the quasi-government home lending agency was placed in conservatorship in 2008 following the Wall Street collapse. A year later, Obama named Allison as an assistant treasury secretary to oversee the Troubled Asset Relief Program that Bush had created to stabilize Wall Street banks and investment houses reeling with toxic debt.
During his work at the Treasury Department, Allison was among top officials who crossed swords with TARP Inspector General Neil Barofsky, who accused the department of failing to properly track government bailout money given to banks and investment houses. Barofsky declined to comment about his dealings with Allison.
Allison left the Treasury Department in 2010 but returned last year to head up the review of energy loans. The White House agreed to the review in the wake of mounting Republican criticism after Solyndra, a California firm, went belly up. The bankruptcy cost U.S. taxpayers $528 million in lost loans.
Rep. Cliff Stearns, R-Fla., who chairs the House Energy Committee’s oversight subcommittee, said Allison’s donations to the Obama campaign back up GOP warnings this year that the White House review was suspect. Stearns said Allison’s “financial support for the Obama campaign undermines (his) credibility and shows once again that the president did not want a careful, independent review of his risky green jobs scheme.”
Allison’s role as a large Obama donor “raises serious questions about an administration that puts campaign cash before taxpayer money,” said Joe Pounder, a spokesman for the Republican National Committee.
Allison declined to say whether he will keep donating to Obama. “Next time around,” he said, “I might support a Republican.”