Grassley, Thune Continue to Seek Answers on Federal Loan to Luxury Car Maker

Press Release

Sen. Chuck Grassley and Sen. John Thune today continued their pursuit of information about the Department of Energy's selection of a luxury automaker --described as "troubled" in various media reports -- for a $529 million federal loan for advanced technology vehicles manufacturing. The federal government made part of the loan to the Fisker Automotive Corporation, then froze the remaining portion, raising questions about whether the company was vetted properly in the first place.

Grassley and Thune have sought answers from the Energy Department about the loan. So far, the Energy Department has not provided much of the requested information. Grassley and Thune today wrote to the Fisker Automotive Corporation, seeking much of the same information they requested from the Energy Department.

"The taxpayers deserve an accounting of what went wrong with the Fisker loan and whether the Administration misled the public about the economic benefits of the loan," Grassley said. "The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny. The taxpayers can't and shouldn't have to subsidize these decisions."

"There continues to be more questions than answers when it comes to the Obama administration's decision to loan Fisker Automotive $529 million of taxpayer funds," said Thune. "Taxpayers deserve to know what went wrong and why this loan was approved in the first place. Although taxpayers have already lost millions on bad Obama administration loans, this administration continues to ignore our basic questions on how these risky bets were made."

The Energy Independence and Security Act of 2007 required the creation of a direct loan program from the federal government to car companies through the Advanced Technology Vehicles Manufacturing incentive program. Fisker's two planned vehicles would sell for more than $100,000 and about $50,000. The high retail prices seem to indicate the vehicles would be out of reach for most Americans, thereby seeming like a questionable choice of investment for a federal program. Also, the senators questioned whether the company's vehicle production in Finland diminishes the goal of developing advanced vehicle technology to create jobs in the United States.

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