Auto123.com - Helping you drive happy

Is U.S. Department of Energy to blame in Fisker mess?

According to a report by PrivCo, a New York-based research firm specializing in closely held companies, the U.S. Department of Energy (DoE) knew by December 2010 that Fisker Automotive wasn't meeting milestones required to keep drawing taxpayer funds, yet waited until June 2011 to cut off funding.

Furthermore, the DoE failed to warn future investors that the electric car manufacturer was in default and no longer had access to the $336.4 million that remained of its loan.

PrivCo chief executive Sam Hamadeh told the media that the government applied “negligent underwriting standards” in granting the Fisker loans. However, the DoE denied this allegation, saying that it “stopped payment on the federal loan in 2011 after Fisker stopped meeting their milestones.”

The PrivCo report indicates that Fisker has spent more than $1.3 billion in taxpayer and venture capital money, or $660,000 for each car it sold.

A U.S. House panel is scheduled to hold a special hearing on Fisker and its government financing on April 24th.

Reuters confirms that “Fisker Automotive raised almost $1.4 billion from investors as diverse as Leonardo di Caprio and Kleiner Perkins, obtained a $528 million loan from the DoE, ballooned to 600+ employees, defaulted on loans or investment conditions at least four separate times, spent $535,000 on a website, got sued by its own employees and evicted from its primary business location, and was finally investigated by the government — apparently for its incredible ability to burn a billion dollars while delivering only a few thousand actual completed cars.”

Today was the deadline for Fisker to pay back $10 million to the DoE.

Source: Reuters