November 21 2012
Bankrupting Company Receives Taxpayer Grant
When A123 Systems INC went bankrupt, Americans were shocked it was able to receive $249 million in federal grants. Wouldn’t the administration ensure companies receiving taxpayer funds are financially stable?
Yet, the company recently told lawmakers the company received a whopping $1 million in taxpayer investment the day it filed for bankruptcy.
The Department of Energy has come under Congressional fire as Senators Thune and Grassley object to the mishandling of taxpayer funds:
"The Department of Energy needs to answer for why it appears to put federal grants on auto-pilot to the detriment of U.S. taxpayers," the two senators said in a statement. "This can't stand."
An energy department spokesman argued the Energy departments takes seriously stewardship of taxpayer dollars, yet $2.4 billion have been invested in advanced battery production. Many battery companies have struggled under weak demand for electric vehicles.
It should come as little surprise that an industry which needed government support to become competitive is struggling to remain solvent, despite receiving billions of dollars in taxpayer funding.
Propping up failing industries is a risky business, and not a responsible use of taxpayer funds. The Department of Energy must revamp its grant program to ensure taxpayer dollars are protected and invested wisely.