Thune, Grassley question stimulus funds to battery company with ties to China

By Pete Kasperowicz - 08/15/12 09:16 AM ET

Sens. John Thune (R-S.D.) and Chuck Grassley (R-Iowa) on Tuesday called on Energy Secretary Steven Chu to explain whether a U.S. battery company should still receive millions of dollars in stimulus money now that it might soon be controlled by a Chinese company.

"Billions of U.S. taxpayer dollars have flowed to foreign companies through the Recovery Act, and we are concerned that the recent announcement could lead to even more taxpayer dollars going overseas," they wrote.

The senators' letter concerns A123 Systems Inc., a company that was given a $249 million grant under the 2009 stimulus bill. Just last week, China's Wanxiang Group Corp. said it would invest $450 million in A123, and could end up owning 80 percent of the company.

Thune and Grassley asked Chu in June how much of the $249 million has already been given to A123, but said Chu "failed to answer this straightforward question." They said press reports indicate that A123 might still have $120 million coming to it under the stimulus.

But their request for information became more urgent given that this remaining money might now benefit a Chinese corporation. In light of that possibility, they asked Chu again how much of the stimulus money has already been given to A123, and whether any more money should be handed out given the pending Chinese investment.

"Considering that A123 has already received millions of U.S. taxpayer dollars and could potentially receive up to $450 million from a foreign company, does A123 need additional taxpayer dollars to continue its operations?" they asked.

They also asked whether the remaining grant money would still be paid out even if Wanxiang ends up controlling A123, and whether the Department of Energy is worried that Wanxiang might wait until all the grant money is given out before exercising its option to control the company.

"Did DOE raise any objection to this transaction?" they asked. "If so, when? Please provide documents supporting any objection raised by DOE to this transaction."