WASHINGTON (CBSDC) – Bankruptcy has never looked so lucrative.
A123 Systems Inc., an electric-car battery producer based in Waltham, Mass., received almost $1 million from the U.S. Energy Department on the same day last month that the company filed for bankruptcy, Bloomberg News reports. The reported $946,830 grant is a only a small fraction of the $115.8 million the company received in stimulus funding.
GOP Sens. Charles Grassley of Iowa and John Thune of South Dakota voiced their displeasure in the program, adding to the growing distaste for President Barack Obama’s choices in green-energy programs for government-distributed loans and grants.
“All of this paints a disturbing picture,” Grassley and Thune said in an e-mailed statement, according to Bloomberg News. “The Department of Energy is writing checks to a company literally as it is declaring bankruptcy.”
The Energy Department refuted the claims.
“The Energy Department takes its responsibility to be good stewards of the taxpayers’ money very seriously,” Bill Gibbons, a department spokesman, told Bloomberg News. “Funds are only disbursed to a company for work already completed toward the ultimate goal of the department’s grant.”
It’s the latest round of bad news for A123. Last week, a U.S. Securities and Exchange Commission filing was released indicating that the company won court approval for 10 employees still on A123’s payroll to receive $4.2 million in bonuses.
“Unfortunately, corporations have found ways to award these bonuses anyway,” Grassley told Bloomberg News. “This situation is especially egregious when the company in question has received $133 million from the U.S. taxpayers, as A123 Systems has. It appears taxpayers are getting the short end of the stick in this deal.”