Fisker Congressional hearing

With a title like "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive" it was no surprise that the slant of today's Congressional hearing by the House Oversight subcommittee on Economic Growth, Job Creation, and Regulatory Affairs was overwhelmingly negative. In fact, for over three hours, it was perhaps the definition of political theater. After all, where else do you get to hear a House of Representatives member (Gerald Connolly, D-VA) say the hearing was like a Soviet show-trial while Darell Issa (R-CA) compared Henrik Fisker (co-founder of Fisker Automotive and a witness today) to Bricklin and Tucker? Oh, and Issa also said Fisker made mistakes that failed presidential candidate Mitt Romney would not have made his first day out of business school. All this and more was on display today in Washington, DC.

The hearing was incredibly – and unsurprisingly – political, with Democrats speaking positively about the overall DOE loan program and Republicans attacking Fisker for taking $192 million (almost always rounded up to $200 million) and not paying it back. Not yet, anyway. Both Fisker (who made it clear he was not speaking for the company, since his official connections have ended) and Fisker COO Bernhard Koehler said that Fisker has not yet lost any taxpayer money, and Koehler said there are still plans in place to pay everything back. Fisker's take was that there is a lot of value left in the automaker that could be brought to bear on paying the DOE back. Of course, Fisker's official website has been down all day, in case you were looking for one more sign that things are not going well for the California automaker.


Henrik Fisker with Atlantic concept car

At issue is a $529 million loan that the DOE granted to Fisker in 2010 as part of the Advanced Technology Vehicles Manufacturing Loan Program. Fisker never got all of those millions and launched the Kama in September 2011, well behind schedule. Here are a few facts that the committee had stated for the record:
  • Fisker said his company sold 250-300 Karmas by the end of 2011.
  • There were 150 applicants to the DOE's ATVMLP. Five received funding, including Ford, Tesla and Nissan. There were no representatives from any of those companies, which are expected to pay the taxpayers back, at the hearing. Issa explained today's session was "subject specific."
  • Fisker was originally approached a Bush-era DOE representative to apply for the loan.
  • Koehler said the "design and engineering work" for the Atlantic, Fisker's purported next vehcle (pictured above) is "almost complete." Fisker said his company has contributed "in a huge way" to the development of advanced automobiles.
While $192 million is a lot of money, Rep. Matt Cartwright (D-PA) pointed out that Fisker took only 2.3 percent of the total ATVM loan program's money. Elijah Cummings (D-MD) said there was no evidence that the DOE did anything wrong in awarding the Fisker loan, but that there was a hint in the air that the timing of the hearing today will negatively affect Fisker's chances of raising funding moving forward.

fisker hearing documentIt was the Republicans who went after Fisker and the DOE, trying to make the point that the government agency should have known that the automaker was doomed and should not have gotten any money. Rep. Ron DeSantis (R-FL) accused the DOE of not figuring out that Fisker had not started production of the Karma on time (according to the loan agreement deadlines) and that the DOE acted too late when it froze Fisker's loan in June 2011. The DOE nonetheless handed out $32 million between the time when Fisker missed its milestone to have the car in production in early 2011 and when the loan was frozen.

Henrik Fisker said Fisker Automotive was transparent about its dealings at all times, but when he said he'd rather not talk about the venture capitol firm Kleiner Perkins' investment role in the automaker, Rep. Jim Jordan (R-OH), chairman, made it clear that if you take taxpayer money, then you have to answer the questions in a situation like this. Fisker later tried to play down the tie by saying that the only representative from Kleiner Perkins who has a connection to Fisker is Ray Lane.

"We didn't bring you here because your car company is in trouble. We don't blame anybody who tries try to get a loan." Darrell Issa

Issa told Fisker that "we didn't bring you here because your car company is in trouble," but because he wants to know how the DOE failed to do its job. "We don't blame anybody who tries try to get a loan," he said, but his committee looks for "waste, fraud and abuse." He had particularly harsh words for the DOE representative, Nicholas Whitcombe, saying that the DOE had stonewalled the committee by not providing documents on time. The documents the committee did have (like the email from Koehler in the screen grab above) came from sources outside the DOE. Issa reprimanded Whitcome, and said "I hope you'll go home a little different."

Rep. Mark Meadows (R-NC) grilled Whitcombe on the way Fisker's loan requests were combined. Originally, Fisker put in a request for a $169 million loan to build the Karma. It was turned down (well, not really turned down, Whitcombe clarified, since it never went to the credit committee) because the car was scheduled to be made in Finland and the DOE can only make loans against eligible expenses. Fisker confirmed that no DOE money was ever sent overseas, that it was all spent in US to create US jobs. Koehler explained that Fisker could not find a US-based manufacturer for the Karma, but that the company did want to build the Atlantic in the US – and it decided this without taking DOE loan requirements into account. Therefore, Fisker's request was turned into the $529-million loan for both vehicles. Whitcombe said that it made sense to look at the entire company and analyze all the company's projects – the Atlantic and Karma have 60 percent carryover parts – before deciding on the loan.

You can read the prepared statements from all the witnesses in PDF format:
  • Nicholas Whitcombe, DOE Loan Programs Office supervisory senior investment officer
  • Henrik Fisker, former executive chairman and co-founder of Fisker Automotive
  • Bernhard Koehler, Fisker COO
  • Nicolas Loris, from the Heritage Foundation
  • Zoe Lipman, former senior manager for new energy solutions, climate and energy program at the National Advocacy Center at the National Wildlife Federation