Tipsheet

Inspector General Sounds the Alarm About Biden's Fraud Prone Loan Program

Katie Pavlich
Katie Pavlich  |  December 18, 2024 4:15 PM

In the remaining days of his failed administration, President Joe Biden is shoveling loads of taxpayers dollars out the door for "green" energy loans dedicated to "fighting climate change."

But a new memo and report from Department of Energy Inspector General Teri Donaldson urges the fast tracking to stop as much of the money could be stolen by scammers or lost to fraud. The IG also warns of rampant conflicts of interests. 

"The Federal Government prohibits conflicts of interest to safeguard the taxpayers against self-dealing, collusion, and fraud by Government officials and Government contractors. In the private sector, each party has a 'baked in' economic incentive to watch, track, and account for its own dollars. That economic incentive does not exist in the public sector, where Federal dollars are more likely to be treated as 'monopoly money.' For this reason, implementing and overseeing robust conflict of interest protections is a critical role for Federal officials," Donaldson wrote in the memo, specifically to Under Secretary of Energy for Infrastructure David Crane. 

"The Department of Energy Loan Programs Office (LPO) is administering more than $385 billion in new loan authority without ensuring a regulatory and contractually compliant and effective system to manage organizational conflicts of interest.' This poses a significant risk of fraud, waste, and abuse," the memo continues. "Congress issued this unprecedented volume of loan authority in the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and related legislation. The projects funded with this authority, which involve innovations in clean energy, advanced transportation, and tribal energy are inherently risky in part because these projects may have struggled to secure funding from traditional sources such as commercial banks and private equity investors."

Republicans in Congress have been investigating the same loan program for years, warning about a lack of vetting and accountability to the taxpayer. 

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“Despite repeated calls to reform its deficient oversight infrastructure, the Department of Energy’s Loans Programs Office continues to leave the door wide open for waste, fraud, and abuse. Today’s OIG report confirms the DOE is administering hundreds of billions of dollars without an adequate system in place to track conflicts of interest or protect U.S. taxpayer dollars," House Oversight Committee Chairman James Comer and Subcommittee Chairman Pat Fallon released in a statement. "Bad actors now have heightened opportunities to take advantage of rushed funding, and no one is the wiser. The Biden Administration should immediately implement the corrective actions recommended by OIG to ensure taxpayer dollars are protected, oversight systems are properly implemented, and DOE is held accountable to the American people.”

The "Inflation Reduction Act" was the largest handout to so-called "green" energy in American history.