An internal federal watchdog agency ordered the Biden administration’s Green Loans Office to stop working on new deals, citing concerns that it was poorly managing potential conflicts of interest in its operations, an internal federal watchdog said in a letter Tuesday. I asked for it.
Department of Energy (DOE) Inspector General Terry Donaldson I wrote On Tuesday, he informed David Crane, the Energy Secretary for Infrastructure, of preliminary findings that the Loan Program Office (LPO) does not track conflict of interest disclosures or loan forgiveness requests. Mr Donaldson also said LPOs should “suspend all loans and loan guarantee packages” until they can ensure that all appropriate safeguards are followed. LPOs have been in crisis since President-elect Donald Trump won the Nov. 5 election, scrambling to secure some major loans and lock down others during the transition period. It is reported that. This is over an outcry from Republicans who believe the party’s lame-duck financing goes against the voters who spent big money and showed up on Election Day.
“Despite the risks and disputes that may arise if an LPO engages a contractor to work for a prospective borrower; [Office of the Inspector General (OIG)] “The audit team was surprised to learn that LPO does not ensure that contracting officers and contracting officer representatives track third-party experts,” Donaldson’s memo states. There is. “For example, of the 18 projects reviewed by the OIG, the LPO Technical Division was able to provide the OIG with the names of the applicant’s third-party engineering experts on only three of the 18 projects.” (Related: House Republicans threaten to subpoena Biden’s green energy financing czar)
DOE OIG – LPO Memo by nick pope On Scribd
The OIG memo also notes that “LPOs do not track contractors that may be servicing both LPOs and prospective borrowers,” and that a major LPO contractor called Archetype ” It also specifically stated that it had not implemented a systematic conflict of interest training program as required by its own management plan. ” Deficiencies in adhering to procedures to ensure the protection of taxpayers constitute a situation in which “LPOs have functionally abdicated their responsibility for identifying, assessing, avoiding, neutralizing, and mitigating conflicts of interest.” , Donaldson wrote.
To date, LPO has closed 15 loans worth a total of $15 billion and plans to close on 13 more loans worth $22 billion before the Trump administration takes office next month, according to Donaldson’s memo. It seems to be standing up. The DOE OIG has previously emphasized in public documents that waste, fraud, and abuse of taxpayer funds are likely to occur, especially given LPOs’ efforts to close loans quickly.
Days before Mr. Donaldson sent the memo to Mr. Crane, a group of House Republicans called for new loans to LPOs, given the risks to taxpayers posed by rushing to scrape together billions of dollars in a short amount of time. requested that publication be stopped. According to Bloomberg News, the Department of Energy claims the OIG report is “unconventional” and “filled with errors.”
But Donaldson’s Tuesday memo includes comments from the auditors that push back against the DOE’s assertion that the investigation never identified any specific instances of conflicts of interest.
“The Department’s assertion that the OIG has not identified actual conflicts of interest misses the point of the audit. “Assess internal controls,” the memo states. “The scope of the audit did not include any attempt to audit the entire LPO portfolio for actual conflicts of interest.Furthermore, LPOs do not track the information necessary to identify conflicts of interest, so at this time It is very difficult to perform an audit to identify actual conflicts of interest.”
Additionally, LPO Director Jigar Shah has essentially expanded his large-scale It has also attracted scrutiny from Republican lawmakers, who have suggested that it may be selling access to LPO military funds. .
LPO was also active during the Obama administration, giving a $535 million loan to the environmental company Solyndra, which went bankrupt about two years after the LPO loan ended. The office was not particularly active during the Trump administration, but the Biden administration and Congress said: hundreds of billions Loan $500 to an LPO to finance emerging green companies that may struggle to obtain private sector financing.
The DOE did not immediately respond to a request for comment.
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