Go bankrupt, win a taxpayer funded prize: A123 Systems received million dollar DOE grant payment on same day it declared Chapter 11
**Written by Doug Powers
Last month Michelle wrote about A123 Systems declaring bankruptcy. A123 was one of the many “clean energy grant” recipients that ended up going under and taking a pile of taxpayer cash with it — a pile that was made even bigger on its final day. In a demonstration of the kind of diligence we’ve come to expect from this administration, the Department of Energy gave A123 Systems a nearly million dollar payment on the same day the company declared bankruptcy:
The company, which makes lithium ion batteries for electric cars, filed for Chapter 11 bankruptcy protection last month after a rescue deal with Chinese auto parts supplier Wanxiang Group fell apart.
That same day, October 16, A123 received a $946,830 payment as part of its $249 million clean energy grant from the Energy Department, the company said in a letter, obtained by Reuters, to Republican Senators John Thune and Chuck Grassley.
In the letter, dated November 14, A123 said the October payment was the most recent disbursement it had received from the government, with an additional $115.8 million still outstanding on the grant.
More from Business Week:
The payment was made after A123 in August announced it planned to give Wanxiang Group Corp., China’s largest auto-parts maker, a majority stake in exchange for financing. Grassley and Thune had questioned the Chinese investment in the U.S. company.
“All of this paints a disturbing picture,” Grassley and Thune said in an e-mailed statement. “The Department of Energy is writing checks to a company literally as it is declaring bankruptcy.”
If the DOE is going to insist on dumping taxpayer money into sinkholes like these, they should at least get those plants re-tooled and have them make something there’s actually now a large demand for: Twinkies.
**Written by Doug Powers
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