IG: Add LG Chem to Obama’s green-tech subsidy flops

posted at 1:21 pm on February 13, 2013 by Ed Morrissey

This comes as no surprise to Hot Air readers, who learned about the value of the Obama administration’s $150 million subsidy investment of LG Chem last fall.  After furloughing its workers at their Grand Rapids plant without having a single one of their batteries installed in a consumer vehicle, the local NBC affiliate produced this report on the way taxpayer money got spent:

Today, the Inspector General for the Energy Department confirmed that LG Chem has been a complete waste of taxpayer funds:

The Energy Department gave $150 million in economic recovery act funds to a battery company, LG Chem Michigan, which has yet to manufacture cells used in any vehicles sold to the public and whose workers passed time watching movies, playing board, card and video games or volunteering for animal shelters and community groups.

Those are the conclusions of a report released Wednesday morning by Energy Department Inspector General Gregory H. Friedman, who said that the grant to a subsidiary of South Korean giant LG “had not been managed effectively.”

Friedman said only three of five planned production lines were complete, less than half the expected 440 jobs had been created and battery production had not yet begun. General Motors, which was expected to buy batteries from the plant in Holland, Mich., is still buying the electric car batteries from LG Chem in South Korea.

Just how much of a waste of time and money may never really be known, other than the topline figure.  Why?  Because LG Chem didn’t bother to keep accurate records of how it spent its government subsidies, emphasis mine:

LG Chem Michigan has reimbursed the Energy Department for $842,189 in costs the inspector general found to be “unreasonable and unallowable” for time employees spent working for Habitat for Humanity, animal shelters and outdoor nature centers. Friedman said that the figure for those labor costs might have been higher, but it was hard to quantify workers’ time spent on those activities because the company did not keep detailed records.

Of course they didn’t.  Why should they?  After all, neither has the government, as we learned last fall, too:

The $831,000,000,000 economic “stimulus” that President Obama spearheaded and signed into law requires his administration to release quarterly reports on its effects.  But “the most transparent administration in the history of our country” is now four reports behind schedule and has so far not released any reports whatsoever in 2012.  Its most recent quarterly report is for the quarter than ended on June 30, 2011. …

Section 1513 of the American Recovery and Reinvestment Act of 2009 (the “stimulus”) explicitly states, “In consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury, the Chairperson of the Council of Economic Advisers shall submit quarterly reports to the Committees on Appropriations of the Senate and House of Representatives that detail the impact of programs funded through covered funds on employment, estimated economic growth, and other key economic indicators.”  (The head of the Council of Economic Advisors, currently Alan Krueger, is appointed by the president, confirmed by the Senate, and works within the Executive Office of the President.  He is the president’s chief economic adviser.)

Indeed, the old reports that the administration released begin, “As part of the unprecedented accountability and transparency provisions included in the American Recovery and Reinvestment Act of 2009 (ARRA), the Council of Economic Advisers (CEA) was charged with providing to Congress quarterly reports on the effects of the Recovery Act on overall economic activity, and on employment in particular.”

Section 1513 of the ARRA further specifies, “The first report…shall be submitted not later than 45 days after the end of the first full quarter following the date of enactment of this Act….The last report required to be submitted…shall apply to the quarter in which the [Recovery Accountability and Transparency] Board terminates under section 1530.”  Section 1530 declares, “The Board shall terminate on September 30, 2013.”

According to the Obama administration, LG Chem was supposed to produce 60,000 lithium-ion batteries for GM vehicles by the end of this year.  So far, though, we have yet to get one.  The good news, though, is that we may have a new world record high score for Angry Birds, and a new test market for the cat token in the next Monopoly game version.


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Flopper in Chief

Schadenfreude on February 13, 2013 at 1:26 PM

Most transparent crooked administration ever!

GarandFan on February 13, 2013 at 1:30 PM

Obviously, they just didn’t use enough money for the stimulus.

Wino on February 13, 2013 at 1:32 PM

Are there any successes? Really. Are there?

tomg51 on February 13, 2013 at 1:32 PM

In the SOTU, Obama pushed government funded manufacturing, citing some computer based 3D form manufacturing process. What a disaster government funded jobs always are. Basic research, that’s one thing. But to draw any line between such research and any kind of specific job is dishonest. It’s another huge failure waiting in the wings. From the SOTU:


There are things we can do, right now, to accelerate this trend. Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3-D printing that has the potential to revolutionize the way we make almost everything. There’s no reason this can’t happen in other towns.

So tonight, I’m announcing the launch of three more of these manufacturing hubs, where businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs.

And I ask this Congress to help create a network of 15 of these hubs and guarantee that the next revolution in manufacturing is made right here in America. We can get that done.

Basic research, yes. Pretending it will “guarantee that the next revolution in manufacturing is made right here in America”? Epic fail. Let the private sector try 3D printing. If the government gets involved, it will be an EPIC FAIL.

Paul-Cincy on February 13, 2013 at 1:34 PM

The CEO (or perhaps Solyndra’s CEO) will end up replacing Chu.

nobar on February 13, 2013 at 1:34 PM

The face of Obama’s green energy ideas is a Potemkin village. Behind closed doors — a little real work, and a lot of pretending. You give me billions of dollars, I’ll pretend for them too. Put up a nice storefront, with a pretty sign. Dog and pony shows.

Paul-Cincy on February 13, 2013 at 1:36 PM

Are there any successes? Really. Are there?

tomg51

One of the Dem’s greatest achievements is that they have never been held to account for any of their failed plans.

I would be great if there were some kind of opposition party that would dig up the data on these failures and make a national issue of it.

Only if.

chimney sweep on February 13, 2013 at 1:40 PM

Wow, actual journalism. I can’t remember the last time I’ve seen it on TV.

WhatSlushfund on February 13, 2013 at 1:42 PM

Forward To Utopia!

visions on February 13, 2013 at 1:52 PM

According to the Obama administration, LG Chem was supposed to produce 60,000 lithium-ion batteries for GM vehicles by the end of this year. So far, though, we have yet to get one. The good news, though, is that we may have a new world record high score for Angry Birds, and a new test market for the cat token in the next Monopoly game version.

That’s unfair Ed. This is an off season for Obama’s elves.

gwelf on February 13, 2013 at 1:55 PM

I was living in Western Michigan when they had the big ceremony. Jennifer Granholm hugged the rat-eared wonder and proclaimed that LG Chem was the future of the auto industry in Michigan. I don’t know what gets credit for being the biggest fraud. Granholm, Obama, or the plan itself.

And though it gets a brief mention in the article, it is important to point out that LG Chem, recipient of $150M in taxpayer dollars, is a South Korean company. Are we really to believe that no Americans would have been able to non-produce batteries?

Happy Nomad on February 13, 2013 at 1:56 PM

Wasn’t Good ‘Ol Joe (Gaffe) Biden supposed to be the Sheriff of the stimulus funds?

CoffeeLover on February 13, 2013 at 2:01 PM

I seem to recall Good Ol’ Joe (Gaffe) Biden was supposed to be in charge of all that stimulus tax dollars!! esh

CoffeeLover on February 13, 2013 at 2:02 PM

hmmmmmmm, no idea how that happened LOL

CoffeeLover on February 13, 2013 at 2:02 PM

Four reports in arrears on ARRA, and how delinquent are they on projected additions to the Federal Register?
Of course, this could all be due to the fact that it has been over 1300 days since the Senate passed a Budget – or to the mindset that rules only apply to Little People!

Another Drew on February 13, 2013 at 2:07 PM

Well at least Obowma made a speech last night…

Seven Percent Solution on February 13, 2013 at 2:08 PM

Are there any successes? Really. Are there?

A lot of people padded their bank accounts with taxpayer dollars.
That’s a success, isn’t it?
Not for us, but for them.

Another Drew on February 13, 2013 at 2:10 PM

We could have had a lunar colony for 831 billion.

Maybe two.

trigon on February 13, 2013 at 2:10 PM

They spent $500,000 on the “presidential ground-breaking” so that President Downgrade could swing through and make yet another speech congratulating himself for doing nothing, get a photo op and leave. Half a million dollars in taxpayer money for that.

Their justification? “Stimulus,” “Green Jobs,” “Shut Up, Racist.”

And the left wonders why we don’t EVER trust to government to spend our money wisely and effectively when it comes to anything other than weapons.

Good Lt on February 13, 2013 at 2:15 PM

Obama wasted over $800 billion on the so-called “Stimulus Act”.

51% of the electorate didn’t care about that.

Why would they care about a paltry $150 million flushed down the toliet?

After all, Marco Rubio took a drink of water last night!

MidniteRambler on February 13, 2013 at 2:15 PM

I have a question and, seriously, I’d like an answer if anyone knows.

When Congress passes legislation requiring a department of government or an individual (the Sec. of the Treasury “shall” and so forth) to do something, some act, such as file a report on A, B or C by a certain time, in a certain form, etcetera, can they write into the legislation some penalty for non-compliance?

It seems that they create obligations all the time that the compelled departments and individuals simply ignore.

Is there any standing for a citizen or group of citizens affected by the non-compliance to file suit? I think not. And I don’t know what the damages would be. Unless the tool is an application for injunctive relief, which, if granted, could result in fines for non-compliance with the court’s order. But, how to even get the matter into court in the first place.

This practice is infuriating and, since the reporting is often a form of quid-pro-quo for the legislation being passed, it seems that some penalty for ignoring an act of Congress should be available. Or, is it all really the rigged game it seems to be?

Makes pro wrestling look like the cleanest sport in the world.

IndieDogg on February 13, 2013 at 2:28 PM

Political slush fund…

Thanks Taxpayers! /BHO

trs on February 13, 2013 at 2:34 PM

Bad INVESTMENT,eh?

docflash on February 13, 2013 at 2:46 PM

When is Obama going to jail for this BS?

TulsAmerican on February 13, 2013 at 3:25 PM

Does anybody have a list of companies that Obama praised in the SOTU last night?

Time to short sell them in the stock market.

If genius Obama touts a company, it’s a sure sign that the company is pretty well crapped up.

MichaelGabriel on February 13, 2013 at 4:54 PM

IG: Add LG Chem to Obama’s green-tech subsidy flops

Yes folks, what we are witnessing is the BIGGEST RIP OFF
by our Federal Government in the history of this Republic.

And not one person has been charged, indicted, investigated,
much less, put in jail.

UNF*CKING BELIEVABLE.

ToddPA on February 13, 2013 at 5:08 PM

This administration is getting away with more crimes and coverups than any administration, ever. More money has “disappeared” from the treasury in the last 4 years than most previous administrations spent in entirety. We should dig up Nixon’s body and apologize to him.

scgas on February 13, 2013 at 8:32 PM

You know when the stimulus passed, my sister said, ” you can be certain someone is going to get gobs of money out of this and you can be sure neither you nor I will know anyone to benefit from it”.

Angineer on February 13, 2013 at 10:51 PM