Search Results for: XP Technology

XP Technology Retains Cause of Action in DOE Cronyism Suit

FOR IMMEDIATE RELEASE                                                                                                CONTACT:

NOVEMBER 23, 2012                                                                        Mary Beth Hutchins or Briton Bennett

202-499-4232

 

XP TECHNOLOGY RETAINS CAUSE OF ACTION TO FIGHT ENERGY DEPARTMENT CRONYISM

 

WASHINGTON – Cause of Action, a government accountability organization, now represents San Francisco-based XP Technology in its November 14, 2012 lawsuit against the federal government concerning the U.S. Department of Energy’s denial of XP Technology’s loan guarantee application under the Advanced Technology Vehicles Manufacturing (AVTM) loan program.

 

XP Technology’s complaint, filed in the U.S. Court of Federal Claims, alleges that “corruption and negligence” pervaded DOE’s decision to award loan guarantees to Ford, Nissan, Tesla Motors, and Fisker Automotive for the development of electric vehicle technology.
“The Department of Energy has acted in an arbitrary and capricious manner at the expense of American small businesses that have sought to reduce our country’s dependence on foreign oil,” asserted Scott Douglas Redmond, XP’s lead investor.

 

About XP Technology:
In development for nearly a dozen years, with millions of dollars in resources already invested, XP Technology., is on a mission is to develop the safest, most affordable vehicle with the lowest total cost of operation (TCO) and the best power-to-weight ratio powered by alternative energy. The battery pack is capable of dramatically exceeding the range of any shipping electric vehicle with four passengers. However, it could reach 300 miles with the continuous and hot-swappable charge of an optional XP Auxiliary Power Unit.  For more information on XP Vehicles, please visit www.xpvehicles.com.

 

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

 

All legal inquiries should be directed to Cause of Action’s Executive Director, Dan Epstein, at 202-400-2720. Media inquiries should be brought to the attention of Mary Beth Hutchins, mary.beth.hutchins@causeofaction.org or Briton Bennett, briton.bennett@causeofaction.org.

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The D-Link Systems’ Consent Order Explained

On Tuesday, August 6, 2019, the U.S. District Court for the Northern District of California entered a consent order between the Federal Trade Commission (“FTC”) and D-Link Systems, Inc., a U.S. company that is a global leader in connectivity for home, small business, mid- to large-sized enterprise environments, and service providers, resolving an FTC lawsuit alleging that D-Link Systems’ security practices violated Section 5 of the FTC Act.  The D-Link Systems order marks the close of the first ever litigated FTC action over the application of Section 5 to the security practices used for Internet of Things (“IoT”) devices.  This result is good for D-Link Systems, and good for the FTC.

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Federal Records Law Must Keep Pace with Evolving Technology

Technology develops faster than law.  This maxim has implications across society, but one place it has particular purchase is in federal recordkeeping and the public’s right to access government information.  The two primary federal statutes that require government to preserve records and then allow the public to access those records are the Federal Records Act (“FRA”) and the Freedom of Information Act (“FOIA”).  Federal agencies, unfortunately, do not always live up to their obligations under these laws and government-oversight organizations turn to the courts to seek relief.  The public’s right to sue under the FOIA is well established.  However, courts rarely compel agencies to fulfil their FRA obligations.  My organization, Cause of Action Institute (“CoA Institute”), is currently involved in two important FRA lawsuits that may shape the future of agency obligations under the FRA for decades to come, as information technologies continue to change.

Both lawsuits arose from Secretaries of State failing to preserve their emails in compliance with the Federal Records Act.  Former Secretary Hillary Clinton’s email travails are well catalogued.  But former Secretary Colin Powell also used a non-governmental email account to conduct official government business.  The factual difference between these two cases is that while Secretary Clinton primarily used a personal email service with a server in her basement, Secretary Powell used an AOL account.  But Secretary Clinton also used a BlackBerry email account for the first two months of her tenure as Secretary of State.  So, from these two cases the same legal issue arises: what is an agency’s FRA obligation to recover unlawfully removed federal email records that are housed on commercial email servers?

This question is important to the future of federal recordkeeping law and public access to information because we are already seeing an explosion of non-email methods of electronic communication.  Some of these methods of communication store information locally, such as on a phone or computer, and some store them on commercial servers.  For example, FOIA requesters have been battling for access to text messages for years, agency employees use various forms of instant messaging while at work, and we’ve now seen the rise of the surreptitious use of phone applications such as Signal and Confide that do not always preserve the communications.

In Armstrong v. Bush, the D.C. Circuit recognized two cognizable private rights of action under the Federal Records Act.  First, a plaintiff may bring a case against an agency if that agency does not have the requisite recordkeeping policies in place or if the policies are insufficiently clear so that an employee does not know what type of records he is required to save.  Second, a plaintiff may bring a case to compel the head of an agency or the Archivist of the United States to recover records that have been unlawfully removed from the agency.  If the agency head or Archivist is either unable or unwilling to perform that duty, then the FRA requires them to “initiate action through the Attorney General for the recovery” of those records.  To our knowledge, no such referral to the Attorney General has ever occurred.

At stake in CoA Institute’s Clinton and Powell cases is whether a plaintiff can force the agency head and Archivist to refer the matter to the Attorney General when, through their own actions, they have failed to recover all the missing records.  In both cases the State Department asked representatives of Secretaries Clinton and Powell to recover the unlawfully removed records and return them to the agency for historical preservation and for response to FOIA requests.  In both cases those representatives responded that they were unable to obtain copies of the records that were housed on BlackBerry and AOL servers, respectively.  The State Department and Archivist have responded in the ongoing suits that those efforts are sufficient and that they are not required to use legal process or refer the matter to the Attorney General for more forceful efforts at record recovery.

CoA Institute’s case related to Secretary Clinton has already been to the D.C. Circuit once and the appellate court held that the agency is only absolved of its Federal Records Act obligations if it can establish the “fatal loss” of the records in question.  The State Department and Archivist have not made a sufficient affirmative showing that BlackBerry, and AOL in the case of Secretary Powell, do not have, and cannot recover, these email records.  They have offered no statements from either company or detailed efforts by those companies to recover and return the federal records.

Whether the district court compels the current Secretary of State and Archivist to make such an affirmative showing or requires them to refer the matter to the Attorney General for him to attempt record recovery could set an important precedent.  This decision will shape the future of agency responsibilities under the Federal Records Act and the public’s ability to have access to its government’s information as communications technology continues to change.

James Valvo is counsel and senior policy advisor at Cause of Action Institute.  He is counsel in both cases discussed in this article.  You can follow him on Twitter @JamesValvo.

Wednesday Waste: Federal Subsidies Prop Up Corporate Executives at Taxpayers’ Expense

The federal government doesn’t just provide welfare to struggling families. On the contrary, it also gives huge sums of money to some of the biggest and wealthiest businesses in the world, amounting to about $100 billion per year through federal subsidies.

Corporate subsidies, or “corporate welfare” to its opponents, are supposedly designed to lower prices and employ Americans. But such well-intentioned justifications fail to materialize and the subsidies end up lining the pockets of corporate executives at no benefit to the consumers, or propping up unsuccessful businesses that aren’t meeting market demand.

The biggest recipients of corporate welfare are not struggling businesses, but rather very successful companies. The country’s top corporate welfare recipient is Boeing, one of the largest defense contractors in the world. Boeing receives a whopping $13.4 billion from taxpayers each year. Other household names at the top include Intel, General Motors, Ford, Fiat, Nike and Shell. Each rakes in between two and six billion dollars annually. Unfortunately, when businesses solicit money from taxpayers, rather than customers, incentives change.

In a free and open economy, consumer spending, not government rewards, signals businesses to act, and businesses are incentivized to listen to consumers. When the government intervenes, it creates artificial signals that are not based on market demand. Rather, they’re incentivized to make political friends and ask for favors. This does nothing for consumers and fuels cronyism and inefficiency.

Instead of focusing resources on customer satisfaction, companies now spend incredible amounts on lobbying. In the last eight years, American businesses have spent more than $3 billion per year on lobbying, more than doubling what was spent annually in the late ‘90s. On top of traditional lobbying, companies also spend millions of dollars funding the campaigns of candidates like Donald Trump and Hillary Clinton to get a friend in the White House. Companies make generous campaign donations sometimes to maintain federal subsidies.

Despite ethics laws, favors are granted to the companies and lobbyists who have the most connections. Such corporate subsidies rarely add value to the economy, nor do they benefit consumers.

If the United States ended federal subsidies today, these problems would largely go away. Corporations would go back to making money by pleasing customers instead of pleasing politicians. If the money spent on subsidies was left in the hands of taxpayers, they would spend it wherever they think is most valuable for themselves instead of having it spent wherever the politicians think is most valuable to their personal careers. Removing federal subsidies would result in better market efficiency and more valuable goods in society. Eliminating these subsidies would also take away more than 20 percent of our current deficit spending.

Some of the inefficiencies are not visible, because we’ve never had a truly free economy. However, some of the inefficiencies are very apparent.

One of the clearest examples is the Obama-connected Solyndra scandal. The company received guaranteed loans, and an investigative report showed that the company was constantly playing politics, instead of producing services, until it went bankrupt in 2011. Even as they were going bankrupt, top CEO’s were still receiving tens of thousands in  bonuses, on top of their already high salaries.

Another lesser-known example is the government’s attempt to subsidize broadband in rural areas, which led to much poorer results than promised. Forty percent of the projects were not even started by the time they were supposed to be completed. Analyses found that the subsidies did not have an effect on rural penetration and “that about 60 percent of subsidies went to rural providers’ overhead rather than to investment.”

Regardless of the business model, the free market will always be a better solution for people overall.

Tyler Arnold is a communications associate at Cause of Action Institute

Related Documents: XP Vehicles v. Department of Energy

Cause of Action is representing XP Vehicles, a San Francisco-based electric car company  in a lawsuit against the federal government concerning the U.S. Department of Energy’s denial of XP’s loan guarantee application under the Advanced Technology Vehicles Manufacturing (AVTM) loan program.

United States Court of Federal Claims

Opposition to Motion to Dismiss (February 18, 2014)

Complaint (January 10, 2013)

United States District Court for the District of Columbia

Opposition to Defendant’s Motion to Dismiss the Official Capacity Claims (October 17, 2013)

Opposition to the Individual Capacity Defendants’ Motion to Dismiss (October 17, 2013)

Memorandum in Opposition to Defendants Motion to Dismiss Official Capacity Counts 2, 3 and 4 (July 30, 2013)

Motion to Amend Complaint (July 30, 2013)

Opposition to Individual Capacity Defendants Motion to Dismiss (July 29, 2013)

Complaint (January 10, 2013)

Bloomberg: Car Companies XP Vehicles, Limnia Sue U.S. Over Loans

Car Companies XP Vehicles, Limnia Sue U.S. Over Loans

 

By Tom Schoenberg on January 10, 2013
President Barack Obama’s administration played favorites on clean-energy loans while improperly blocking a carmaker and a related technology company from receiving millions in aid, according to two lawsuits.

XP Vehicles Inc. and Limnia Inc. filed complaints against the U.S. and the Energy Department today in two federal courts in Washington, seeking damages for what they say were abuses of the $25 billion Advanced Technology Vehicle Manufacturing loan program. XP Vehicles, which has dissolved, and Limnia are asking for $450 million in a case filed in the U.S. Court of Federal Claims and at least $225 million in U.S. District Court.

“Defendants used the ATVM loan program as nothing more than a veil to steer hundreds of millions of taxpayer dollars to government cronies,” according to the district court complaint.

Today’s lawsuits are the latest challenge to clean-energy loan programs administered by the Energy Department, which has come under scrutiny over a $535 million loan guarantee to now- bankrupt solar-panel maker Solyndra LLC.

“While the department does not comment on pending or potential litigation, multiple investigations spanning almost two years and involving millions of pages of documents show that decisions made on the department’s loan program were made solely on the merits after careful review by the department’s technical experts,” Damien Lavera, an Energy Department spokesman, said in an e-mail.

Koch Foundation
The companies are being represented by Daniel Epstein, executive director for a Washington-based nonprofit advocacy group. He previously worked for a foundation started by Koch Industries Inc. Chief Executive Officer Charles Koch, a billionaire contributor to Republican-leaning causes. He was also counsel for Republican U.S. Representative Darrell Issa’s House Oversight and Government Reform Committee, which is leading a probe of the department’s loan programs.

XP Vehicles, or XPV, said it applied in 2008 for a $40 million loan in an effort to mass produce an SUV-style electronic vehicle with doors and other parts made from foam. The starting price for the vehicle was to be less than $20,000.

The carmaker said it believed the review of its application would take “a matter of weeks.” After meeting with the agency in May 2009, XPV said it discovered that two of its competitors — Tesla Motors Inc. (TSLA) and Fisker Automotive Inc. — were receiving special assistance from agency staff with the loan application process.

Obama Contributor
One member of Tesla’s board at the time was Steven Westly, a campaign contributions bundler for Obama, while Fisker’s investors included Obama donors, according to the complaint.

Tesla received a $465 million loan in June 2009 with an interest rate of 1.6 percent, according to the complaint. XPV called one of Tesla’s products “an expensive electric car targeted at rich actors, journalists and businessmen, not average Americans.”

Fisker received a $528.7 million loan. The department in May 2011 blocked Fisker from receiving the bulk of the loan, after the company didn’t meet milestones for producing its first model.

Jeff Evanson, a spokesman for Palo Alto, California-based Tesla, and Roger Ormisher, a spokesman for Anaheim, California- based Fisker, didn’t immediately respond to e-mail messages seeking comment on the lawsuits.

XPV’s application was denied in August 2009. The reasons given by the agency involved vehicle specifications as well as manufacturing and sales plans, according to the complaint.

Limnia is also challenging applications for loans it sought that were denied.

The Energy Department has made five loans under the advanced-vehicles program — none since the 2011 bankruptcy of Solyndra — and $16 billion remains undistributed.

The court of federal claims case is XP Vehicles Inc. v. U.S. Department of Energy, 12-cv-00774, U.S. Court of Federal Claims (Washington). The district court case is XP Vehicles Inc. v. U.S. Department of Energy, 13-cv-00037, U.S. District Court, District of Columbia (Washington).

OMB Publishes Proposed Revisions to Outdated FOIA Fee Guidelines Following CoA Institute Lawsuit

The White House Office of Management and Budget (“OMB”) published a notice of proposed revisions to its Uniform Freedom of Information Act Fee Schedule and Guidelines in today’s issue of the Federal Register.  OMB first published the guidelines, which are binding on all agencies subject to the Freedom of Information Act (“FOIA”), over thirty-years ago.  They have never been updated, despite repeated requests from the transparency community, the FOIA Federal Advisory Committee, and the Archivist of the United States.  The much-anticipated revisions aim to improve FOIA administration and ensure more equitable resolution of fee issues across the government.  OMB’s notice comes amid a lawsuit filed by Cause of Action Institute (“CoA Institute”) to force such an update.

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