The Biden administration’s $400 billion energy loan fund is facing intense criticism after a federal watchdog called for its suspension over fraud and conflict-of-interest concerns. The inspector general’s memo highlights systemic lapses in oversight at the Department of Energy’s Loan Programs Office (LPO).
Inspector General Teri Donaldson warned that the LPO has failed to identify or address potential conflicts of interest between applicants and contractors. The memo cites $22 billion in pending loans as particularly concerning, given the lack of safeguards in place.
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) has called on Energy Secretary Jennifer Granholm to immediately halt the program. “Americans deserve accountability, not reckless spending,” Barrasso said, criticizing the administration’s rush to distribute funds before Biden’s term ends.
The LPO has faced accusations of favoritism, including loans tied to its director, Jigar Shah. Among these is an $861 million loan to AES Marahu, a company Shah previously worked with, and a pending $1.5 billion loan to Plug Power, where Shah was a major investor.
Donaldson criticized the LPO’s claim that it has maintained compliance for 15 years, noting that the office does not track or compile necessary conflict-of-interest data. “This approach only invites fraud,” Donaldson wrote, calling for immediate reforms.
The LPO, which now oversees lending comparable to major banks, has been under review for over a year, with a detailed report expected from the inspector general’s office in the coming months.
