U.S. Senators Chuck Grassley (R-Iowa) and John Thune (R-S.D.) continue to press for answers about a $249.1 million federal grant awarded by the U.S. Department of Energy through the controversial 2009 stimulus bill to a battery manufacturer that could soon be owned by a Chinese investor. Grassley and Thune sent a letter this week to the chief executive officer of A123 Systems based in Massachusetts questioning whether U.S. tax dollars are going to benefit a Chinese company rather than U.S. taxpayers and express concern about national security risks.
“We need to be sure that when the federal government invests close to a quarter of a billion dollars in grants to a company, that the technology developed as a result of this taxpayer support doesn’t end up in China,” Grassley said. “We’ll continue to press for answers and for a full accounting from the Administration on how these grants are made and whether any measures are taken to prevent tax dollars from being wasted. This situation requires transparency and accountability.”
“With over 23 million Americans unemployed or underemployed and struggling to make ends meet, the federal government should not be sending millions of U.S. taxpayer dollars to a Chinese company to support Chinese jobs,” said Thune. “The president promised his stimulus bill would reduce unemployment to 6 percent by now, but instead, unemployment just dropped below 8 percent for the first time since the president took office nearly four years ago. The American people have a right to know whether stimulus dollars will be used to support the creation of Chinese jobs.”
In August, Grassley and Thune wrote to the Department of Energy after the company was faltering and had just announced a $450 million investment deal with a Chinese company to express concern about tax dollars going to a struggling company.
Grassley and Thune said their concerns continue, in part because the Department of Energy has not answered basic questions. Because of the way the deal is structured, China-based Wanxiang can transfer some of A123’s debt into ownership. The China-based company could end up owning 80 percent of A123. Billions of tax dollars already have flowed to foreign companies through stimulus bill spending. This deal could lead to foreign government access to technology that A123 has described as “innovative” and “next generation.” A123 holds several multi-million dollar contracts with the Department of Defense and is pursuing more defense contracts for military vehicles, power grids, high energy lasers, advanced armor, and unmanned defense vehicles.
Grassley and Thune said that if A123 is close to being owned by a Chinese company, then the public deserves to know: how much of the federal stimulus grant the company has yet to receive; what safeguards are in place for taxpayer-funded intellectual property; if taxpayer-funded jobs will stay in the United States; if the Energy Department raised any objections to the financing deal and if it didn’t, why not? In addition, the administration must account for what protections are in place for classified information of the Department of Defense, Grassley and Thune said.The text of the latest Grassley-Thune letter is available here. The text of their August letter to the Department of Energy is available here.