Battery company got $1M from Energy Department the day it filed Chapter 11

The Energy Department has supported A123 Systems, Inc., which produced batteries for electric vehicles, through thick and thin.

The company received a $946,830 payment, part of a larger grant, on the day it filed for Chapter 11 bankruptcy protection in mid-October.

The company revealed the Oct. 16 payment in a letter this week to Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.), who have questioned federal financing for the company.

The company won approval for $249 million in grant funding in 2009 but didn’t draw the whole thing. Reuters has more here, including Energy Department response.

From their story:

In the letter, dated November 14, A123 said the October payment was the most recent disbursement it had received from the government, with an additional $115.8 million still outstanding on the grant.

Thune and Grassley have pressed the Energy Department for more details about its funding of A123 as the company has faltered.

"The Department of Energy needs to answer for why it appears to put federal grants on auto-pilot to the detriment of U.S. taxpayers," the two senators said in a statement. "This can't stand."