Energy and Water Development and Related Agencies Appropriations Act, 2016
Floor Speech
BREAK IN TRANSCRIPT
Mr. COATS. Mr. President, this is No. 40 of ``Waste of the Week.'' For the 40 weeks the Senate has been in session this cycle, I have come down to the Floor to talk about a waste of taxpayers' dollars through waste, fraud, and abuse. This week I am going to talk about yet another Federal program which has, at best, a questionable track record.
I filed an amendment to the Energy and Water appropriations bill currently in the Senate, which is related to this program, and hopefully we will be voting on the amendment I will be offering in a few moments to address this issue. This amendment, which I offered with Senators Fischer, Toomey, and Flake, would finally wind down the Department of Energy's failed Advanced Technology Vehicles Manufacturing Loan Program.
Remember the stimulus? Remember how we were throwing all kinds of taxpayers' money out there? We talked about advanced vehicle programs, and many of these distributions of funds have been misused or simply have not come to fruition, and a great deal of money has been wasted.
The ATVM Loan Program continues to sit on billions of dollars of unused funds that could be put to better use. I am glad there are some unused funds there because it means that when we look at the history of this program, perhaps we will have an opportunity to better use those unused funds or to help return it back to the Treasury so the taxpayer isn't on the hook for this kind of thing going forward.
Let me explain this program. The Department of Energy's Advanced Vehicle Technology Manufacturing Loan Program was created in 2007. It was created to provide very low-interest loans to manufacturers that make vehicles or components of vehicles that use alternative energy.
I am not here to downplay the use of alternative energy. I think that is something that is happening throughout our country. Hopefully, it is on a market basis. To qualify for this loan, there were a couple of requirements applicants must meet: No. 1, the vehicle or component must be new or significantly improved from what is currently available in the U.S. marketplace; No. 2, it has to be manufactured in the United States. The purpose of the program, partly, was to encourage manufacturing here--not in China, not somewhere else.
Last month, nearly 10 years since the program's inception, the Government Accountability Office took a look at the program's finances and found that the Department of Energy has billions of unused and unspent funds. I am glad they do because a lot of things that have taken place under this program have not proven to be worth their weight.
I have spoken before on a number of programs, but in 2011, under this fund--the Alternative Vehicle Fund--the Obama administration approved a $730 million loan to a company called Severstal Steel Company, a Russian-owned company with operations in Michigan.
Remember, to qualify for this loan, the alternative fuel vehicle or vehicle part needs to be manufactured in the United States and--here is the key--it must be a new product. Technically, Severstal was manufacturing in the United States, but the Obama administration certainly walked the line in this case. The U.S. Government was providing American taxpayer dollars to a Russian company owned by one of Russia's richest oligarchs, Alexei Mordashov.
The New York Times has reported that Mr. Mordashov has ties to the Kremlin and to Russian President Vladimir Putin. Apparently, this Russian looked at this program and said: Hey, here is a way I can get a low-cost, low-interest loan. All I have to do is operate this plant and the government will loan me $750 million and I will produce a new part, a new component of steel that is used in automobile manufacturing.
After working with the Department of Energy's inspector general, Senator Toomey and I learned that the type of steel made by this Russian company was identical to the steel already being produced in my home State of Indiana and Senator Toomey's home State of Pennsylvania. Obviously, that violated one of the basic criteria in that the product has to be an alternative that is brand new or significantly improved and not something that is already being produced in Indiana.
Fortunately, with the help of the inspector general, we were able to ensure the Obama administration voided the loan. To their credit, when we brought it to their attention, they said: OK. We have a Russian oligarch we are giving money to--and that doesn't sound very good. We are giving money to this multibillionaire in Russia with close ties to Vladimir Putin. Secondly, we now have learned what they are producing is already produced in the United States--in my State of Indiana and in Senator Toomey's State of Pennsylvania. Thus, fortunately, the administration canceled this loan.
This example calls into question the integrity of this program. The ATVM Program also has a lackluster success rate. For example, Fisker Automotive received a $529 million loan to produce a $100,000 plug-in hybrid sports car. You will not see any of these on the road because the company went bankrupt after drawing down $193 million of taxpayer funds.
Another loan recipient, VPG, planned to sell natural gas-powered vans. It went bankrupt after receiving a $50 million government loan.
Of the five projects funded by this program to date, two of them have gone bankrupt. I think these examples demonstrate what happens when the government tries to pick winners and losers instead of letting the free market determine how we are going to go forward.
The Coats-Fischer-Flake-Toomey amendment that will be offered would wind down this program and it would make much better use of the unspent funds from this program.
I want to be clear. This amendment prohibits DOE from reviewing any new loan applications after the bill's enactment. There are currently some pending applications. We do not address those pending applications. I hope serious evaluation will be made relative to whether they qualify under the criteria that is laid out and we will not end up with any more Severstals.
Those who argue that this shuts down an alternative energy program is not valid. Anything that is now being currently evaluated up through the end of 2020, the next 5 years--will be allowed to go forward and be evaluated under the program. The amendment doesn't take that away.
CBO scored this amendment as saving at least $300 million over the next 10 years. I have been down here every week talking about a waste of the week. I have just identified another waste of taxpayer dollars. We are not counting that, but we are counting what we can save if this amendment is adopted. It is $300 million. I think that is a significant amount it raises our waste, fraud, and abuse level to $162 billion and change.
I encourage my colleagues to work with us so we can offer this amendment. Remember, it does not affect anybody who has a proposal before the Department of Energy under this loan program. If that is underway, it can be evaluated--hopefully successfully evaluated, and if it doesn't qualify the criteria, won't be accepted. The amendment does not free funds for anything that is not currently before the evaluators of this program.
I trust we can gain the support of my colleagues in saving the taxpayers some dollars.
BREAK IN TRANSCRIPT
Mr. COATS. Madam President, I call up my amendment No. 3814.
BREAK IN TRANSCRIPT
Mr. COATS. Madam President, 205 loans issued by the Department of Energy under the alternative vehicle program have failed, costing taxpayers $500 million in losses. DOE currently sits on $4 billion of unused money. It is time to wind down this program. This will not affect any proposals that are currently with the Department of Energy on this program, but it will prevent any new programs going forward.
We can save the taxpayers a lot of money and use this for other alternatives if we adopt this amendment.
I yield the remainder of my time to the Senator from Pennsylvania.
BREAK IN TRANSCRIPT
Source