Executive Director Dan Epstein describing our clients XP Vehicles and Limnia, and their case against the crony Department of Energy.
01/15/2013
Doe v. Hamburg Amended Complaint and Exhibits
Amended complaint in Doe v. Hamburg et al. case filed on January 11th, 2013 in the US District Court for the Northern District of California.
01/14/2013
AM-1300 WMEL Producer’s Blog: Bought and Paid for Winners and Losers? The XP Vehicles/Limnia Saga.
Read the full story here. Raised on Hoecakes
“In a lawsuit filed by the non-profit group Cause of Action, we may have an answer to that in the future.
The lawsuit involves the actions of the Department of Energy (DOE) and loans the Department made to help develop hybrid and electric cars. Enter into the arena a company by the name of XP Vehicles(XPV). In 2008, XP Vehicles applied for a loan from the Department of Energy for their revolutionary all electric, small SUV. XP Vehicles was using basic “off the shelf” products to make a vehicle that was one third lighter than a Toyota Prius. This was accomplished by using expanding polymers for the car’s body, making it lighter and safer. To propel the car, XP Vehicles partnered with Limnia, Inc, a company that was going to use a solid state regenerative sodium fuel cell to generate electricity for the electric motor. Instead of charging, the fuel cell could be “hot swapped” within a few minutes. The resultant combination of technologies would be a safe, lightweight car with virtually unlimited range. No longer would the electric car require charging for 8 hours or a long extension cord being dragged behind it.”
01/11/2013
White House Opens New Year with Open Data Mandate
In our blog outlining New Year’s resolutions for the federal government, we noted how a report from the Cato Institute gave the administration poor grades on data publication practices. The report found that, “the administration and the Congress both receive fairly low marks under systematic examination of their data publication practices.”
We are happy to learn that the administration is working towards improving its data public practices. According to Federal News Radio, the Office of Management and Budget will soon mandate that agencies release machine-readable data.
The change is part of the president’s Digital Management Strategy described in a May 23, 2012 report from the White House. An objective in the report states that, “We must enable the public, entrepreneurs, and our own government programs to better leverage the rich wealth of federal data to pour into applications and services by ensuring that data is open and machine-readable by default.”
Jim Harper, the author of the Cato report on government publication practices, called the change “good, not yet great.” He added that, “great would be the White House itself publishing machine-readable, open data when it issues the president’s budget in February. Along with the plan for fiscal year 2014 spending, why couldn’t we get the code that distinctly identifies each agency, bureau, program, and project—in essence, the organization of the U.S. federal government?”
There is still a lot of work this administration needs to take regarding open government and transparency, but we applaud this change. We hope OMB officially issues this mandate sooner rather than later.
01/11/2013
FoxNews.com: Electric car designers suing DOE over loan denials, intellectual property disclosure
Read the full story here. Fox News
“XP Vehicles and Limnia attempted to file a similar lawsuit in Federal Court of Claims in November, but it was rejected because they did not have legal representation at the time. Now, the companies have teamed up with Cause of Action, a self-proclaimed nonpartisan government watchdog group often linked to conservative issues.
Cause of Action Executive Director Dan Epstein said his organization became involved in an effort to expose what his clients allege is rampant cronyism in the loan approval process for the Energy Department’s $25 billion Advanced Technology Vehicle Manufacturing (ATVM) program, which was created to support the development of fuel efficient automobiles.
To this end, the would-be automakers designed a radical, lightweight, energy-efficient vehicle that uses bodywork constructed from a foam-filled, flexible material instead of metal, and runs on electricity provided by a system of exchangeable battery cartridges or hydrogen fuel cells…“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 Departments technical experts,” said Energy Department Spokesperson Damien LaVera in a statement to FoxNews.com.
Epstein says his goal is not just getting compensation for his client, but also laws on the books to put a check on the governments “unbridled authority in picking of winners and losers.” Along with the issues surrounding the rejected loans, the lawsuits also claim that the Energy Department, through its Sandia National Laboratories, shared Limnia’s secret designs for a hydrogen-fueled power system with both Ford and General Motors, then encouraged the company to seek a partnership with GM so that there would “there was no acrimony…”
01/11/2013
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).
01/10/2013
When cronyism takes the place of merit at the DOE, everyone loses
With the new push towards green energy most recently from the 44th administration, Congress created Department of Energy loan guarantee programs designed to help the private sector develop new technology and products. Sadly, instead of the return Americans were expecting, they found much of their money upside down in poorly executed projects.
It should come as no surprise that these projects failed, given the level of cronyism that went into the decision making process for DOE loan guarantees. Still, shock or no shock, when cronyism takes the place of merit, everyone loses.
If we look at the electric car initiative alone, failures abound. Fisker is selling cars that catch fire. Tesla hit a huge snag when they started swallowing cash at an enormous rate without churning out product.
And the worst part? All of these failures could have been prevented if cronyism not been the modus operandi of the Department of Energy and White House.
When Cause of Action took on XP Vehicles and Limnia as our clients, we learned that the level of cronyism extended beyond just “picking winners and losers.”
- DOE had two sets of rules with respect to these programs: one for its favored cronies, and one for everyone else. The DOE loan programs were designed by Congress to help the private sector develop new technology. Instead, there is overwhelming evidence that DOE repeatedly discriminated against companies that lacked a history of large campaign contributions and political patrons.
- DOE admitted in writing that our client was qualified for an ATVM loan but still denied its loan application. Although DOE had billions in available funds, it asserted that it could not fund all qualified applicants, and that our client failed to meet certain secret “merit review” criteria. These secret criteria mysteriously resulted in DOE funding only government crony companies.
- Despite having $16 billion of unused loan authority, DOE has refused to make a single ATVM loan to another electric vehicle company since funding Tesla and Fisker in 2009, thus protecting both Tesla and Fisker from competition.
- There is strong evidence DOE slyly gave our client’s confidential intellectual property—IP that DOE itself believes is 3 times more effective than traditional hybrid batteries—to GM and possibly gave unique pressure membrane technology to Ford; actions that, if true, violate the agency’s confidentiality agreements, as well as the trust of the American people.
Not only did XP have all the merits of any of their competition, but they had better technology. A car that wouldn’t catch fire like Fisker, or one that didn’t rely on other crony corporations to provide energy storage technology.
We hope that XP Vehicles, Limnia, and the American people find their vindication, which is why we’ve filed two lawsuits detailing the ways that they have been wronged. To see the documents we filed in the US District Court for the District of Columbia and the US Court of Federal Claims click here.