DOE’s inspector general warned just weeks earlier that loan program carries ‘significant risk of fraud’
President Joe Biden’s departing green energy loan czar this week finalized a controversial $1.6 billion federal loan to a green energy company with which he had prior financial ties—a farewell shot at federal investigators who have been probing conflicts of interest in his lending office.
The Department of Energy’s loan to Plug Power, a hydrogen fuel developer, comes months after Republican lawmakers raised concerns about the company’s past business relationship with DOE Loan Programs Office director Jigar Shah. Shortly before joining the Biden administration, Shah invested $100 million in Plug Power through a green financial firm he founded called Generate Capital, the Washington Free Beacon first reported last year.
The funding announcement comes just weeks after the department’s inspector general called on Shah to immediately halt all loans from the Loan Programs Office, citing a “significant risk of fraud” and conflict-of-interest concerns within the lending program. The LPO eschewed the warning and has pumped out billions to companies in the final weeks of the Biden administration.
The Plug Power announcement is likely to fuel Republican criticism of Shah’s tenure at the LPO, which ballooned from a near-dormant program during President-elect Donald Trump’s first term to a $400 billion spending powerhouse under Biden.
Securities and Exchange Commission records detail a long-standing financial relationship between Plug Power and Generate Capital, an investment firm that Shah founded before joining the Biden administration in 2021, the Free Beacon reported last January. Shah sold his shares in Generate when he entered the government, according to federal disclosure records.
Under Shah’s leadership, Generate loaned over $100 million to Plug Power, one of the firm’s most significant investments, according to its website. Plug Power described Generate as its “longstanding partner” in a 2020 press release, while Shah was running the investment firm. The loan was still active when Shah left Generate to become head of the DOE loan office.
One month after Shah joined the Biden administration, Plug Power applied for federal financing from his office.
Shah had direct involvement early in the Plug Power loan process, according to internal DOE documents obtained by the Free Beacon through a public records request. Weeks after the application, Shah held a one-on-one meeting with Plug Power’s CEO on May 21, 2021, according to his scheduling records. Three days after that, loan office staff convened another meeting, entitled “Plug Power Scenario Discussion.”
But Plug Power soon hit some financial speed bumps. In 2023, the company warned investors that it could run out of money within a year. In December of that year, Morgan Stanley downgraded Plug Power’s stock, citing “significant risk around PLUG’s business model.”
Despite the financial troubles, Plug Power repaid the $100 million to Shah’s former company, Generate, at a 9 percent interest rate in late 2023, according to corporate disclosure filings. The repayment was three years ahead of schedule, at a time when the hydrogen fuel company was warning investors about its financial viability.
Shah’s links to Plug Power have drawn scrutiny from Republican lawmakers. Sen. John Barrasso (R., Wyo.) sent a letter last June to DOE inspector general Teri Donaldson, asking her to investigate the loan proposal for “potential impropriety on the part of Director Shah and the LPO more broadly.”
While Donaldson has not commented specifically on Plug Power, the inspector general has been investigating conflict-of-interest policies at the LPO.
Last month, the inspector general issued an unprecedented call to suspend the loan program based on her preliminary findings, warning that officials aren’t complying with conflict-of-interest rules and that the program carries a “significant risk of fraud.”
Read the full article here
