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.
