DOE Loan Recipients Submitted False Information

DOE Inspector General Testifies

Department of Energy (DOE) Inspector General Gregory Friedman’s testimony on Wednesday, November 2, 2011, before the House Oversight and Government Reform Committee reinforces Republicans’ claim that Solyndra‘s bankruptcy is proof of how wasteful the Obama administration’s stimulus plan has been.

Friedman testified that investigations involved “various schemes, including the submission of false information, claims for unallowable or unauthorized expenses and other improper uses of Recovery Act funds.” The majority of grants and loan guarantees were given to “green” technology programs or research, including those that focused on high risk “energy efficiency and renewable energy” and “environmental management.” Friedman also said that the end of stimulus funding would lead to “significant downsizing of the contractor workforce.” He continued, “The department estimates that with the end of Recovery Act funding, over 4,000 workers at Environmental Management sites … will be displaced by the end of 2011.” Inspector Generals with the Departments of Energy and Labor told the House panel that reports show that billions of dollars in stimulus funding given to the agencies to create green jobs have failed to achieve that goal.

More than a hundred criminal investigations were launched into DOE’s handling of its 4% of the Obama stimulus. Friedman testified, “these involve various schemes, including the submission of false information, claims for unallowable or unauthorized expenses, and other improper uses of Recovery Act funds.” Five criminal prosecutions have resulted, and over $2.3 million in stolen “stimulus” money has been recovered. Even when it wasn’t beset by scam artists, the “stimulus” people found themselves so paralyzed by bureaucracy and paperwork that they couldn’t effectively give money away.

Green Job Training

Elliott Lewis, assistant inspector general for the audit office of the Department of Labor, said the agency received $500 million in stimulus funds for its Employment and Training Administration (ETA) for “competitive grants for research, labor exchange and job training projects to prepare workers for careers in the energy efficiency and renewable energy industries, the DOE Green Jobs program.”

Weatherization Program

Friedman testified, “Weatherization work was often of poor quality. In a recent audit performed at the state level, 9 of 17 weatherized homes we visited failed inspections because of substandard workmanship.” From this source we learn that in an August, 2011, report, the DOE’s inspector general had found quality to be a common problem in Missouri’s retrofits. And since 2009, when the Recovery Act was passed, the IG had released nearly a dozen audits of the Weatherization Assistance Program. “The IG reports haven’t been pretty,” said Michael Sciortino, a senior analyst with the American Council for an Energy-Efficient Economy (ACEEE). “The quality of these jobs has been — it needs improvement.”

The weatherization program grew out of the 1970s oil crisis. It sought eligible, low-income Americans and outfitted their homes with the most cost-effective improvements. The program normally received $300 million or $400 million, but under the Recovery Act, it got $5 billion and a goal of retrofitting 600,000 homes. Sciortino said the haste to spend stimulus dollars and create jobs contributed to the quality problems in some states. Loans were not documented properly, money was wasted left and right, and one weatherization recipient “gave preferential treatment to its employees and their relatives for weatherization services over other applicants, thus disadvantaging eligible elderly and handicapped residents.”


Rep. Jim Jordan (R-OH), chairman of the House subcommittee, commented on Freidman’s and Lewis’ testimony. Jordan said, “Mr. Friedman and Mr. Lewis, based on your testimony, it looks like both the weatherization program and the green jobs training program are, I guess, by anyone’s conclusion, just a complete failure.”

But that’s just my opinion.