Three Republicans on the House Energy and Commerce Committee sent a letter to a key Department of Energy (DOE) official on Monday following a Daily Caller News Foundation report that found his office had committed to providing a massive loan for a company that was allegedly defrauding its investors.
Citing the DCNF, Reps. Cathy McMorris Rodgers of Washington, H. Morgan Griffith of Virginia and Jeff Duncan of South Carolina wrote the letter to Jigar Shah, who leads the DOE’s Loan Programs Office (LPO), demanding answers about his office’s due diligence process. The DCNF reported in November that the LPO had reached a conditional commitment to loan Li-Cycle, a battery recycling company, $375 million while the company was allegedly defrauding investors.
The purpose of the LPO is to provide green energy companies with loans that the private sector would not offer, accordingto the office’s website.
The LPO conducts its due diligence process before offering a conditional agreement to a potential loan recipient. In Li-Cycle’s case, the loan package, announced in February 2023, would have subsidized the company’s Rochester, New York, facility. The company paused construction on that project in October, and it now faces a class-action lawsuit that alleges the company committed securities fraud by misrepresenting or failing to disclose that the facility’s construction costs were rising to the point of potentially jeopardizing the project.
LPO Letter Re Li-Cycle by Nick Pope on Scribd
Shah had pitched Li-Cycle CEO Ajay Kochhar on the benefits of an LPO loan in September 2022, according to The Wall Street Journal, three months after the company had allegedly started to defraud investors. Kochhar was reportedly worried that his company would be unable to service the debt to the government, but Shah reassured him that his concerns would eventually be rendered moot because the company would be making a lot of money in the coming years.
The company’s stock price is down about 85% year-to-date, according to data from Google Finance.
Republican Wyoming Sen. John Barrasso, the ranking member on the Senate Energy and Natural Resources Committee, has also slammed Shah for committing to the Li-Cycle loan and pressed him for answers in an October letter.
Li-Cycle is not the only troubled company that LPO has offered to loan a massive package of taxpayer dollars. The LPO offered a $3 billion package to Sunnova, a solar company that allegedly ripped off elderly customers on their deathbeds by convincing them to sign multi-decade, five-figure rooftop solar contracts, according to The Washington Free Beacon.
Barrasso and Republican Missouri Sen. Josh Hawley also ripped into Shah at a hearing about his continued association with the Cleantech Leaders Roundtable, a green energy trade group that Shah used to run before taking the top job at the LPO. The trade group has seen its revenues and influence surge since Shah started running LPO, and he has continued to speak at its events, some of which charge attendees a fee, according to the Beacon.
The DOE did not respond immediately to a request for comment.
Nick Pope on December 7, 2023
