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.