The Department of Energy’s inspector general has issued a damning report on President Joe Biden’s $400 billion energy loan fund, warning of widespread vulnerabilities to fraud and conflicts of interest. Inspector General Teri Donaldson is demanding an immediate pause to the Loan Programs Office (LPO) until better safeguards are implemented.
The LPO, which has rapidly expanded under Biden, has come under fire for awarding billions to high-risk companies, some linked to its director Jigar Shah. Donaldson’s memo details the office’s failure to track or disclose relationships between applicants and federal contractors, a critical safeguard required by law.
NEW: The Department of Energy's inspector general is calling on the Biden admin to halt its rapid-fire green energy loan program.
The IG says the program "poses a significant risk of fraud, waste, and abuse" and notes that the DOE has failed to *track conflicts of interest.* pic.twitter.com/UDISwmZ15S
— Thomas Catenacci (@ThomasCatenacci) December 17, 2024
Sen. John Barrasso (R-WY) condemned the program, accusing the administration of rushing to allocate taxpayer money with insufficient oversight. “The Energy Department’s actions demonstrate blatant disregard for protecting the American people’s money,” Barrasso said.
Shah has faced scrutiny for loans like the $861 million to AES Marahu, a company he previously worked with, and a proposed $1.5 billion loan to Plug Power, where he was a major investor. Despite these ties, Shah declined to pause the program, claiming there are no documented conflicts of interest.
Donaldson’s office countered, saying the LPO’s failure to track such conflicts undermines its credibility. “This approach is deeply troubling,” she wrote, adding that the office’s actions raise significant red flags.
The LPO, now managing a portfolio comparable to major international banks, is expected to face further scrutiny in Donaldson’s forthcoming comprehensive report.
