Chinese Company Purchases Stimulus-funded Battery Manufacturer
WASHINGTON, D.C.-Senators John Thune (R-S.D.), and Chuck Grassley (R-Iowa) released the following statements today regarding the purchase of failed stimulus-funded battery company, A123, by China-based investor, Wanxiang Group Corp. Thune and Grassley have taken the lead in seeking answers from both the Obama administration and A123 on the use of taxpayer dollars to fund the now-bankrupt green energy company, and previously raised concerns that Wanxiang's acquisition of A123's energy storage activities and active military contracts could compromise American military and energy security.
"President Obama's energy policy has been a win-win for China and a lose-lose for the American taxpayer," said Thune. "The president borrowed money from China to pay for his $800 billion stimulus bill, and then gambled these funds away on now-bankrupt green energy ventures. Now we learn that a Chinese company has bought one of these companies for pennies on the dollar. In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns. Given the important national security interests at stake, we expect a full review of the bankruptcy transaction by the Treasury Department."
"Shortly before the election, this administration told the American people that A123's government-financed technology would stay in the United States," said Grassley. "This assurance turned out to be false. Now, we need to find out why the administration said this, what classified technology will be at risk, and whether the more than $100 million in taxpayer money given to A123 will end up in Wanxiang's pockets. The review process at the Treasury Department is the last hope for ensuring some regard for U.S. interests. I look forward to a decision."
On August 14, 2012, Thune and Grassley sent a letter to the Department of Energy after A123 announced a $450 million investment deal with Wanxiang to express concern about tax dollars going to a struggling company. There were clear indications that A123 was having financial problems even as the administration continued to pour millions of taxpayer dollars into the failing company.
On October 9, 2012, Thune and Grassley sent a letter to A123 expressing their concerns regarding the company's potential agreement to grant Wanxiang majority control of the company.
On October 16, 2012, A123 filed for Chapter 11 bankruptcy and the Department of Energy publicly stated that A123 would be purchased by an American company and that it would "..continue to be a vital part of America's advanced battery industry."
On November 1, 2012, Thune and Grassley sent a letter to Treasury Secretary Timothy Geithner outlining their concerns that Wanxiang's investment in A123 could compromise American military and energy security, and pressed Secretary Geithner to review the potential transaction through his oversight of the Committee on Foreign Investment in the United States.
On November 14, 2012, in a response to a letter from Thune and Grassley, it was revealed that the very day A123 filed for bankruptcy, the Department of Energy sent the company a check for nearly $1 million. The Department of Energy was also aware of A123's pending acquisition by a Chinese company, Wanxiang, and still gave the company more taxpayer dollars.