The Department of Energy (DOE) ultimately suspended the NAPG project in January 2012, and the project is currently under review by the U.S. Attorney’s office in Pittsburgh. The attorney in charge of the case, Paul Skirtich, specializes in fraud and public-asset recovery.
The central focus of the Two Elk project — carbon-capture technology — was an important aspect of President Obama’s green-energy agenda. The stimulus package provided nearly $1.5 billion in funding for the DOE’s Industrial Carbon Capture and Storage Program, and in 2010 the president established an interagency task force to promote the “rapid commercial development and deployment of clean coal technologies, particularly carbon capture and storage.”
A March 2013 audit by the DOE’s inspector general (IG) found that the department had “not always effectively managed” the carbon-capture program and appears to cite the Two Elk project as an example. The IG report notes that the DOE reimbursed one grant recipient (working on a project that was suspended in January 2012) about $3.7 million, or nearly 75 percent of the total award, “even though documentation submitted to the Department lacked evidence that the costs claimed corresponded to the items in the approved project budget.”
The audit reviewed 15 out of 46 stimulus-funded “cooperative agreements” such as the Two Elk project, which had received a combined $1.1 billion in taxpayer funding. The reported identified up to $18.3 million in “questionable reimbursement claims.” Three particular recipients were awarded a combined $90 million despite “significant financial and/or technical issues” identified during DOE’s merit-review process, the report found, including $48 million in funding given to a recipient “whose financial condition precluded it from obtaining a satisfactory merit review.” And the DOE had failed to review millions of dollars’ worth of contracting arrangements to ensure they did not involve conflicts of interest; the audit identified more than $1.4 million in transactions between one grant recipient and an affiliated company that had representatives on the board of directors at the recipient’s firm.
These figures pale in comparison with some of the more high-profile stimulus failures such as Solyndra, the California solar-panel firm that went bankrupt after receiving more than half a billion dollars in taxpayer-guaranteed loans. But the numbers add up, and all in all they do not inspire confidence in the government’s ability to spend taxpayer dollars wisely. Agency inspectors’ general audits routinely shed light on this sort of fiscal mismanagement.
Perhaps the only upside is that the federal government is even inefficient when it comes to wasting money. The DOE IG’s report found that as of February 2013, four years after the stimulus was signed, and more than two years after the funding for the carbon program was fully obligated, less than 42 percent ($623 million) had actually been spent.
— Andrew Stiles is a political reporter for National Review Online.