House Republicans Slam Federal Loan To Fisker As 'Corrupt' And 'Mismanaged'

henrik fisker at house oversight committee hearingNicholas Whitcombe (L-R), of the DOE, Fisker Automotive founder Henrik Fisker and co-founder Bernhard Koehler at Wednesday’s congressional hearing.

Republican members of Congress fiercely criticised Fisker Automotive executives and Department of Energy (DOE) officials at a House Oversight Committee hearing Wednesday.

The hearing, titled “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive,” was called to discuss the DOE’s choice to award Fisker a $529 million loan.

Fisker, once a promising electric car company, has stopped production of its cars, fired three quarters of its workforce earlier this month, and appears headed for bankruptcy.

Rep. Jim Jordan (R) of Ohio called the DOE loan program “one of the most disastrously mismanaged and corrupt programs in U.S. history,” according to Fox News.

He also demanded an explanation, saying: “The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face.”

And Rep. Patrick McHenry (R) of North Carolina questioned the government’s role in giving out loans, saying “the government is a very poor venture capitalist,” Reuters reported.

The DOE and Fisker did have some defenders from the left. Democratic Congressman Gerald Connolly of Virginia compared the hearing to “a Soviet show trial,” according to CNN Money.

Documents released Wednesday showed the DOE did not realise Fisker had missed a critical production target mandated by the conditions of its loan. The car company was given an extra $32 million before the June 2011 freezing of the loan, the AP reported.

White House spokesman Jay Carney accused the Oversight committee of trying “to stoke false controversy by selectively leaking a few out-of-context documents,” according to Green Car Reports.

Although the DOE could potentially recoup funds from Fisker (and has already seized $21 million from the company) many see a Fisker bankruptcy as a repeat of the failure of solar panel manufacturer Solyndra, which received a $535 million loan from the Obama Administration.

A recent press release from the Energy and Commerce Committee, chaired by Republican Congressman Fred Upton, called the Fisker deal “plagued with problems.” It listed four other companies that went bankrupt after receiving DOE loans, including Solyndra.

The Solyndra and Fisker loans were part of different programs.

The hearing is not the only current problem for Fisker: It is facing a federal lawsuit that alleges it did not give adequate notice before dismissing the majority of its employees.

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