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)

Cause of Action files opposing briefs in Department of Energy cronyism lawsuit

As we’ve seen over the past month the DOE is reviving its loan program, this time under new management.

Yet Cause of Action (CoA), a government accountability group, hasn’t forgotten how the DOE handled applications for the Loan Guarantee Program in the first go-round.

Today CoA took a step in a lawsuit we filed against the DOE for corrupting its lending programs to favor political insiders, and arbitrarily denying applications by failing to review applications with ‘established merit criteria’ as required by law.

CoA has been investigating the DOE’s loan guarantee program for  more than a year and has uncovered that the agency failed to give XP Vehicles and Limnia, Inc., two qualified applicants under the DOE’s loan guarantee program fair treatment and the honest opportunity to compete for Government loan funds to build advanced technology vehicles and components.

Click here to see the Opposition to Defendant’s Motion to Dismiss the Official Capacity Claims

Click here to see the Opposition to the Individual Capacity Defendants’ Motion to Dismiss

5 Ways the DOE Loan Program and Fisker Automative Failed American Taxpayers

The House Oversight Committee is holding a hearing today on “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive.

We’ll be live tweeting beginning at 2pm.

1. According to the DOE Loan Program Office, $34.5 billion of loans have created about 60,000 jobs, which is $575,000 per job.


Via Tumblr

2. Cause of Action analysis determined that 95% of those who received a loan gave political contributions, while only 31% of those who were not chosen gave contributions.


3. Fisker Automotive continued to receive money for almost a year after the Obama administration found out it was failing to meet conditions set in the loan.

 In 2010, the Obama administration gave a $529 million loan to Fisker. Fisker would only receive $192 million before it was cut off.

Via Gifrific

4. Fisker never finished construction on its factory or produced any cars backed by the government loan.

 Via togif

5. Taxpayers are looking at a potential loss of $171 million. The largest loan failure since Solyndra.





Buying an Energy Loan

The introduction of government influence into the market places an incentive for businesses to use the government’s power in order to garnish a larger share of the market. Perhaps better known as cronyism, this attempt to use politics in favor of private business is often characterized by campaign contributions for politicians who can then use political power to steer government funding and prowess to private firms.

Could the Department of Energy Loan Guarantee Program  be characterized as a breeding ground for cronyism in the distribution of loans through the 1703, 1705, and Advanced Technology Vehicle Manufacturing Loan Guarantee Programs?

Cause of Action was able to determine, through publicly available data combined with a FOIA production[1], that for corporations[2] who have received a loan guarantee of any amount, the likelihood that it made campaign contributions increases significantly. Of the data available, 95% (.95) of DOE loan recipients with less than $1 billion in annual revenue documented political contributions by the organization or senior level staff. Comparatively, only 31% (.319489) of similarly sized organizations that did not receive loans made political contributions in one way or another.

To date, ATVM, 1703, and 1705 loans have awarded guarantees in the amount of $34.5 billion. [3]

The Department of Energy defines each of these programs as follows:

  • Section 1703 of Title XVII of the Energy Policy Act of 2005 authorizes the U.S. Department of Energy to support innovative clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks. [4]
  • Advanced Technology Vehicles Manufacturing (ATVM) loans support the development of advanced technology vehicles (ATV) and associated components in the United States. They also meet higher efficiency standards.[5]
  • The Section 1705 Loan Program authorizes loan guarantees for U.S.-based projects that commenced construction no later than September 30, 2011 and involve certain renewable energy systems, electric power transmission systems, and leading edge biofuels.[6]

With that amount of money at stake, it is easy to see why Loan Guarantee Programs (LGP) have attracted a large number of applicants during the course of the program. This could potentially lead private corporations, who stand to significantly benefit from receiving a DOE Loan Guarantee, to make attempts to better the chances of being a recipient through means of political persuasion.

The program itself, while touting its ability to create jobs, has proven riddled with pitfalls and failures and may in fact be taking away jobs from other areas of industry—ones that may prove more valuable to the citizens who fund DOE LGPs with their tax dollars[7].


[1] FOIA Production available here

[2] ‘Corporations’ refers to privately owned business who was given a loan guarantee through the DOE LGP that also had less than $1 billion in annual revenue. In the cases of subsidiaries, organizations whose parent corporations made political contributions were considered to have made political contributions by proxy.

[3] United States Department of Energy, accessed 27 February 2013,

[4] United States Department of Energy, accessed 27 February 2013,

[5] United States Department of Energy, accessed 27 February 2013,

[6] United States Department of Energy, accessed 27 February 2013,

[7] Mercatus Center, accessed 27 February 2013

Related Documents: Department of Energy Loan Guarantee Program

FOIA Request

FOIA Request (May 17, 2012)

FOIA Productions

Combined Data

Energy Efficiency and Renewable Energy

Energy Efficiency and Renewable Energy 2

Energy Efficiency and Renewable Energy 3

Energy Efficiency and Renewable Energy 4

Nuclear Power

Nuclear Power 2

Financial Institution Partnership Program (FIPP)

Financial Institution Partnership Program (FIPP) 2

Energy Transmission


Fossil Fuels




Morning News for Friday, February 15, 2013

The GAO released its biennial report of the agencies at the highest risk for waste, fraud and abuse. The Washington Guardian has the latest:

Congress’ main investigative arm, the Government Accountability Office, has released its latest list of government programs at high-risk of waste, fraud and abuse, continuing a tradition of providing lawmakers with the report every two years at the start of a new Congress. And most on this year’s list are long-time, repeat offenders.

DOE Loan Recipient Tesla Motors attempts to defend its name after the NY Times piece doubted the car’s capabilities. Daily Caller has this coverage:

The New York Times is under attack from electronic-car maker Tesla, whose chairman and CEO on Wednesday posted a full-page, data-filled refutation of claims made by Times reporter John Broder that its Model S failed spectacularly during a test drive. The CEO, Elon Musk, flatly accuses the reporter of both lying in his story and repeatedly attempting to sabotage the car. “We assumed that the reporter would be fair and impartial, as has been our experience with The New York Times, an organization that prides itself on journalistic integrity,” wrote Musk, in a post on Tesla’s website called “A Most Peculiar Test Drive.”

President Obama continues to claim that his administration is leading the charge in terms of transparency despite mounting evidence to the contrary. The Washington Free Beacon has this story:

President Obama once again claimed his administration is the “most transparent in history” Thursday, despite lengthy record of failed reform and increased secrecy. Obama was answering questions during a Google hangout when a woman questioned him on his promises of greater government transparency, noting things “feels a lot less transparent.  “This is the most transparent administration in history,” Obama assured the woman. “I can document that this is the case.”

Morning News for Wednesday, February 13, 2013

The future of the Consumer Financial Protection Bureau will be discussed in a press conference today. The Republican reports:

U.S. Sen. Elizabeth Warren, D-Mass., will join Democratic colleagues from the Senate Banking Committee on Wednesday in a press conference discussing the future of an agency she holds close to her heart- the Consumer Financial Protection Bureau. Warren, who helped create the bureau and was passed over as its first chief due to staunch Republican opposition, will now get the chance to defend it in the Senate.

The Dept. of Energy reconsiders loan guarantee for a wind farm. Read more from The Boston Herald:

Cape Wind is back in line for a big loan from the Obama administration, over the objections of project opponents and Republican congressmen who are sounding the alarm about investing taxpayer cash in another potential Solyndra. The U.S. Department of Energy shelved the offshore wind developer’s request for $2 billion in federal aid in 2011 because of a lack of progress, but recently reconsidered the application — although reportedly for a smaller amount.

From The Washington Examiner: Dept. of Veterans Affairs accuracy in reports questioned.

Accuracy reports have been manipulated by the Department of Veterans Affairs to make it appear employees make fewer mistakes on claims for disability payments than they actually do, The Washington Examiner has found. Audits of individual case files by the agency’s inspector general consistently show error rates on disability claims much higher than those claimed in official reports.