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GREEN ENERGY OVERSIGHT: EXAMINING THE DEPARTMENT OF ENERGY’S BAD BET ON FISKER 

AUTOMOTIVE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ECONOMIC GROWTH, 

JOB CREATION AND REGULATORY AFFAIRS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 24, 2013 

Serial No. 113–18 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

MARK POCAN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

VACANCY 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON ECONOMIC GROWTH, JOB CREATION AND REGULATORY AFFAIRS

JIM JORDAN, Ohio, Chairman 

JOHN DUNCAN, Tennessee 

PATRICK T. MCHENRY, North Carolina 

PAUL GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

DOC HASTINGS, Washington 

CYNTHIA LUMMIS, Wyoming 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY BENTIVOLIO, Michigan 

RON DESANTIS Florida 

MATTHEW A. CARTWRIGHT, Pennsylvania, 

Ranking Minority Member 

TAMMY DUCKWORTH, Illinois 

GERALD E. CONNOLLY, Virginia 

MARK POCAN, Wisconsin 

DANNY K. DAVIS, Illinois 

STEVEN A. HORSFORD, Nevada 

(III) 

C O N T E N T S 

Page 

Hearing held on April 24, 2013 .............................................................................. 1 

WITNESSES 

Mr. Nicholas Whitcombe, Supervisory Senior Investment Officer, LPO, Department of Energy 

Oral Statement ................................................................................................. 9 

Written Statement ............................................................................................ 11 

Mr. Henrik Fisker, Former Executive Chairman, Fisker Automotive 

Oral Statement ................................................................................................. 15 

Written Statement ............................................................................................ 17 

Mr. Bernhard Koehler, Chief Operating Officer, Fisker Automotive 

Oral Statement ................................................................................................. 23 

Written Statement ............................................................................................ 25 

Mr. Zoe Lipman, Independent Consultant 

Oral Statement ................................................................................................. 69 

Written Statement ............................................................................................ 72 

Mr. Nicolas Loris, Herbert and Joyce Morgan Fellow, The Heritage Foundation 

Oral Statement ................................................................................................. 76 

Written Statement ............................................................................................ 78 

APPENDIX 

Letter of Response from Kirkland & Ellis LLP ..................................................... 90 

(1) 

GREEN ENERGY OVERSIGHT: EXAMINING THE 

DEPARTMENT OF ENERGY’S BAD BET ON 

FISKER AUTOMOTIVE 

Wednesday, April 24, 2013, 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC GROWTH, JOB CREATION & 

REGULATORY AFFAIRS, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 9:35 a.m., in Room 

2154, Rayburn House Office Building, Hon. Jim Jordan [chairman 

of the subcommittee] presiding. 

Present: Representatives Jordan, DeSantis, McHenry, Lummis, 

Collins, Meadows, Issa, Cartwright, Connolly and Cummings. 

Staff Present: Ali Ahmad, Majority Communications Advisor; 

Kurt Bardella, Majority Senior Policy Advisor; Molly Boyl, Majority 

Parliamentarian; Lawrence J. Brady, Majority Staff Director; Joseph A. Brazauskas, Majority Counsel; Daniel Bucheli, Majority 

Assistant Clerk; Sharon Casey, Majority Senior Assistant Clerk; 

Drew Colliatie, Majority Professional Staff Member; John 

Cuaderes, Majority Deputy Staff Director; Adam P. Fromm, Majority Director of Member Services and Committee Operations; Linda 

Good, Majority Chief Clerk; Tyler Grimm, Majority Professional 

Staff Member; Peter Haller, Majority Senior Counsel; Ryan M. 

Hambleton, Majority Professional Staff Member; Frederick Hill, 

Majority Director of Communications and Senior Policy Advisor; 

Christopher Hixon, Majority Deputy Chief Counsel, Oversight; 

Mitchell S. Kominsky, Majority Counsel; Justin LoFranco, Majority 

Digital Director; Mark D. Marin, Majority Director of Oversight; 

Mary Pritschau, Majority Professional Staff Member; Laura L. 

Rush, Majority Deputy Chief Clerk; Scott Schmidt, Majority Deputy Director of Digital Strategy; Rebecca Watkins, Majority Deputy 

Director of Communications; Jeff Wease, Majority Deputy Chief Information Officer; Jaron Bourke, Minority Director of Administration; Jennifer Hoffman, Minority Press Secretary; Chris Knauer, 

Minority Senior Investigator; Adam Koshkin, Minority Research 

Assistant; Brian Quinn, Minority Counsel; Dave Rapallo, Minority 

Staff Director; Rory Sheehan, Minority New Media Press Secretary; 

Donald Sherman, Minority Counsel. 

Mr. JORDAN. The committee will come to order. 

We are going to start with a short video that we think sort of 

sets some context. My friends on the Democrat aisle may think otherwise, but we think this is important, particularly when you think 

2 

about the fact that several hundred million of taxpayer dollars 

were lost. So we are going to show that, then we will get to opening 

statements. 

As I indicated to our witnesses before the committee was gaveled 

into order, we may have to break for votes here in the next 20, 30 

minutes. If we do, we will take a short recess, then we will come 

back. 

So we will start with the video. Then each side has several opening statements and then we will get to your testimony. 

If the staff could roll the tape. 

[Video shown.] 

Mr. JORDAN. Today’s hearing is about getting to the bottom of 

the U.S. Department of Energy’s Fisker Automotive loan fiasco. For 

over a year the committee has been examining DOE’s loan to 

Fisker, and the facts that emerged are deeply troubling. We need 

to understand why the Department of Energy thought Fisker was 

a viable company. As the video points out, the Vice President 

bought the Fisker story. Mr. Biden proudly declared in his home 

State of Delaware that Fisker would produce ‘‘billions and billions 

of dollars worth of jobs.’’ The factory at which Mr. Biden made 

these remarks alongside Mr. Fisker never produced a single car, 

and currently no one works there. 

A couple of things are clear. First and foremost, Fisker should 

have never received taxpayer money. It was rated CCC+. In layman’s terms, it was junk grade investment. The company built cars 

that cost $100,000. They built them in Finland. Taxpayers effectively subsidized luxury novelty vehicles for the likes of Justin 

Bieber, Leonardo DiCaprio, and Al Gore. Fisker was not a well 

thought out startup; it had a fancy design and big names behind 

it, but no real business acumen. It was never destined to be a company of job creators but, rather, skillful rent seekers. Fisker never 

oriented itself toward market signals and consumer demands; its 

north star was the political winds of Washington. 

In his prepared testimony, Mr. Fisker states he does not ‘‘believe 

that any improper political influence was used in connection with 

the company’s loan application or subsequent negotiations with the 

Department of Energy.’’ But the facts seem to indicate otherwise. 

We know for sure that partners at Kleiner Perkins, a major 

stakeholder and backer of Fisker, talked regularly with people in 

the Obama Administration and within the Department of Energy’s 

loan office. Kleiner Partner Ray Lane was chairman of the board 

at Fisker and Kleiner General Partner John Doerr talked regularly 

with Loan Program Office head Jonathan Silver and was an outside advisor to President Obama on the Administration’s green energy spending strategy. 

Furthermore, the governor of Delaware contacted the Department of Energy in December of 2011 and asked that the DOE take 

prompt action to help Fisker, which the Department of Energy did 

that same month by issuing Fisker an accommodating waiver to 

forgive the company for missing milestones and breaching financial 

covenants. 

Documents obtained by the committee show ample evidence that 

DOE’s actions resulted in needless loss of additional taxpayer 

funds. The Department of Energy bent over backwards to accomVerDate Aug 31 2005 14:29 May 29, 2013 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\80920.TXT APRIL
3 

modate Fisker at many stages even though the company was woefully underperforming and, according to documents obtained by the 

committee, potentially breaching financial covenants as early as 

June of 2010, before DOE disbursed any funds. 

The Administration contends the program overall is a success 

and that we should ignore failures such as Fisker because taxpayers haven’t lost even more money. This is entirely misleading 

and seeks to cover up the fact that the loan program has been one 

of the most disastrously mismanaged and corrupt programs in 

American history. 

Today’s hearing does not conclude our investigation into Fisker’s 

loan; it is just the beginning of fulfilling the committee’s obligation 

to the American people to get answers about the malfeasance uncovered at the Department of Energy. 

With that, I would yield to the gentleman from Pennsylvania for 

his opening statement. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. I would like to 

thank our witnesses for appearing before the committee today and 

welcome the opportunity to hear your testimony on the Department 

of Energy’s Advanced Technology Vehicles Manufacturing Loan 

Guarantee Program. 

The ATVM Program was created under President Bush and has 

received widespread support from both Democratic and Republican 

administrations and members of Congress. The program was structured to invest in U.S. companies and technologies that improve 

the fuel economy of vehicles, promote economic growth and job creation in the U.S., and protect U.S. taxpayer dollars. 

The ATVM Program provided most of its funds to Ford, which 

today markets highly efficient and successful electric and eco boost 

engines made in Lima, Ohio and several other U.S. facilities. The 

success of the Ford loan was replicated with the overwhelming majority of funds lent by the Department of Energy; $1.4 billion went 

to Nissan North America, which in 2012 reported a record-breaking 

year in sales, and $465 million to Tesla, which is on course to 

repay its loan early. In fact, 98 percent of the loan guarantees 

awarded in this program appear on track to be repaid. 

Today’s hearing seems to ignore these considerable successes. Instead, we are focusing on a $192 million loan made to Fisker Automotive. I absolutely believe there should be congressional oversight 

of these programs and I look forward to this discussion, but I would 

just like to point out the extensive amount of cherry picking that 

is going on here today, and that really has been going on in the 

oversight of the Loan Program Office overall. All of the evidence 

before us indicates that the Department of Energy protected taxpayers in implementing the ATVM Program and DOE followed the 

same rigorous due diligence procedures in awarding the Fisker loan 

as it did in awarding the Tesla loan, the Nissan loan, and the Ford 

loan. 

Unfortunately, the Fisker loan is clearly not working out. But 

Congress, in creating this program, expected that some loans would 

not work out as hoped and Congress appropriated $7.5 billion to 

cover potential losses in the loan portfolio. And DOE protected taxpayers once the loans were made. Financial controls and contractual milestones on the release of funds were built into every deal 

4 

to minimize the taxpayer loss on these loan guarantees. These controls are particularly relevant as we discuss Fisker, which received 

a $529 million loan guarantee, but drew down only $192 million of 

those funds; $192 out of $529 drawn down. DOE’s oversight of 

Fisker’s ability to meet project milestones led to the decision to cut 

off Fisker’s access to the loan. 

Earlier this week, DOE recovered $21 million from Fisker to protect against the loss of those taxpayer dollars. In the event the 

Government is unable to receive any return on the Fisker investment, losses would account for just 2 percent of the $8 billion in 

loan guarantees awarded in the ATVM. 

Now, I suggest that if Congress were not such a dysfunctional, 

partisan place, this hearing would lend some perspective on this 2 

percent potential loss. In the world outside the Beltway, anybody 

who exceeds expectations 98 percent of the time gets an A+. That 

is what the DOE’s performance has been in this program. 

All of the evidence in this committee that we have gathered leads 

to the conclusion that the ATVM is working as planned. DOE implemented the ATVM Program and awarded funds only after rigorous due diligence. Fisker’s problems were clearly not hoped for, 

but Congress and DOE planned for the potential of some loans not 

working out. In fact, ATVM’s performance has exceeded Congress’s 

expectations, and only a portion of the funds authorized to Fisker 

are at risk of loss if the company fails to find a buyer. 

While I appreciate the opportunity to hear the testimony of the 

witnesses today, I think the majority reveals a substantial partisan 

bias here. I note that nobody from Ford, nobody from Nissan, nobody from Tesla and their successful programs was called here to 

testify. The majority apparently did not want any contacts, didn’t 

want to acknowledge those successes. That is really a shame. The 

American people should be quite proud of what our ATVM Program 

has achieved. 

I yield back. 

Mr. JORDAN. I thank the gentleman. I would just point Ford, 

Tesla, Nissan ATVM, they haven’t lost $200 million of taxpayer 

money. That is why they are not here. We have the company here 

who has lost $200 million of taxpayer money. And only in Washington would a $200 million loss of taxpayer money be viewed as 

a success. I mean, it boggles the mind, the statements from the 

gentleman. 

I now yield to the gentleman from the full committee. 

Mr. ISSA. I thank the gentleman and I thank the chairman from 

Ohio and the ranking member from Pennsylvania. 

I am currently from California, Mr. Fisker. Welcome. But I was 

born and raised in Ohio. I grew up in a car company family. I 

worked for General Motors; my father worked for General Motors. 

Everyone else worked for TRW. One way or the other, everybody 

in our family was in the car business. So I am going to open up 

by telling you you know that your place in history as a body designer is secure. You know the work you have done in other areas 

is well known and desirable. Yes, you are going to be with Preston 

Tucker for building an innovative car that didn’t last; from a fiscal 

responsibility the company didn’t make it. You will be with Malcolm Bricklin; you will be with John DeLorean. That is not necVerDate Aug 31 2005 14:29 May 29, 2013 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\80920.TXT APRIL
5 

essarily bad company. Quite frankly, innovative cars have a history 

of failing. 

This program was conceived, as the ranking member said, under 

President Bush; voted. It was not a partisan vote; it was not a partisan program. We have you here today not because you failed; not 

because you lost potentially U.S. dollars and other investors’ dollars. We have you here today because we need to figure out not the 

successes of a program. We appreciate that and I think they should 

be lauded, and the Administration has done a pretty good job of 

doing it. 

We have you here because there were a number of things that 

happened along the way in which DOE had an opportunity to not 

give you some of the money that they are now trying to recover. 

They had an opportunity in several documents to get the money 

back and allow you to be spun off to somebody else. At least the 

record indicates that. There were opportunities to not fail. More 

importantly, this was an investment in a finished car from Finland. 

That was not something that was envisioned when this was produced, and most importantly to me as an owner of 37 patents, 

when I went through the file and I looked at DOE allowing this 

money to go to you while not owning any of the intellectual property because that is a company not covered by the loan, I looked 

and said there were fundamental mistakes that Mitt Romney, the 

day he left graduate school, would not have made that mistake. 

And that is why you are here. You are not here for your ambition; 

you are not here for what went wrong on your watch, nor your 

chief operating officer. You are here because DOE seemingly cannot 

miss an opportunity to miss an opportunity in this case. The mistakes are well documented. 

And yes, as the chairman said, there is an indication that one 

of Mr. Fisker’s major investors had extraordinary access to the 

White House, and one of the questions is would just anybody who 

had never produced a car, who wasn’t going to actually produce a 

car in the first go-round, be able to get this kind of money and this 

kind of underlying guarantee if they didn’t have a politically connected backer. That is a question, it not an answer. Those are some 

of the things that the chairman is looking to find out. 

I do reject the ranking member’s assertion that somehow this 

panel is not fair. It is subject specific and I think it is appropriate. 

Every panel that comes before this committee I look at before, during, and afterwards and say did I get it right. I do not believe that 

between the first and second panel we are going to particularly feel 

we didn’t get it right. 

I will mention, once again, that the absence of transparency by 

DOE, a consistent pattern of not being open and transparent, does 

make it difficult. But the chairman has been able to get enough 

documents for us to see a number of failures and, last but not least, 

I want people to understand if we are going to get in the business 

of investing, are we investing in everybody? Are we investing specific? Do we have a plan? And I think that if we are going to have 

a second hearing, and after the car makers, if you will, are gone, 

I think we are going to have DOE back again and back again, until 

the lessons learned are so undeniable that, in fact, we can have a 

confidence that you won’t miss opportunities to minimize losses, 

6 

make the best choices up front, make sure that you are free of political influence and effect, which you are not, and the emails we 

have received show anything but that. 

So, yes, we want to have these decisions made by professionals. 

We want them made without political interference. We want them 

made consistent to a plan. And as other investigations this committee has done, we want to make sure there is no gamesmanship 

of essentially having multiple loans for the same technology. All of 

that is part of our mandate. 

So, Mr. Fisker, as I said in the back, this is not a pleasant experience for anyone to go through, particularly at a time of a trauma 

for your own company and so on. We asked you to be here because 

we believe your story, your ambition, the work you did succeed in 

doing is a perfectly good story of the automotive business. We are 

here to look at how Government allocated resources and risk, and 

ultimately, whether they are made whole or not, the missed opportunities that we don’t believe, based on the documents we have 

looked at, should be missed. And I hope people on both sides of the 

panel, I know my ranking member will speak next, focus on that, 

focus on the missed opportunities to get it right up front, or at least 

to minimize losses. 

I thank the chairman for the extra time and I yield back. 

Mr. JORDAN. I thank the chairman for his well stated opening remarks. 

I now yield to the gentleman from Maryland. 

Mr. CUMMINGS. Thank you very much. I too hope that we get it 

right, and I hope that we don’t go through a motion, commotion, 

emotion exercise and no results. That is what happens. 

Mr. Chairman, I want to thank you for this hearing, and I thank 

our witnesses for testifying before the subcommittee today about 

the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Guarantee Program and the Fisker Automotive. 

I hope today’s hearing could be a substantive evaluation of the 

Department’s loan program, but I am concerned that the Republicans continue to make the false and irresponsible claims that this 

program is nothing more than an effort by the Obama Administration to reward political cronies. 

Last year, Republican presidential candidate Mitt Romney 

claimed publicly that the Energy Department’s loan to Fisker Automotive was the result of ‘‘crony capitalism.’’ He said the President 

handed out this loan and others to reward campaign contributors. 

After Mr. Romney made this claim, The Washington Post fact 

checker gave him four Pinocchios. Not three, not two; four. That is 

the most you can get for such a blatantly untrue statement. 

As the Post reported, the business partner mostly closely associated with Fisker Investment is Ray Lane, who contributed mostly 

to Republicans, including Rudolph Giuliani, John McCain, and 

George W. Bush, not Barack Obama. 

The fact is that after five hearings last Congress, an exhaustive 

18-month investigation, the evidence before the committee makes 

clear that the Department’s loan guarantees were awarded not 

based on political contributions, but on the Department’s unprecedented due diligence. And anyone who continues to make this discredited claim is ignoring the evidence. 

7 

The evidence before the committee also demonstrates that the 

Department’s loan portfolio is exceeding the expectations set by 

President Bush and Congress when they created this program in 

2008. The Department committed $8.4 billion to five automated 

projects across the Country. These included $5.9 billion to Ford 

Motor Company to upgrade its facilities and develop hybrid engines 

in Michigan and Ohio; $1.4 billion to Nissan to build an advanced 

battery manufacturing plant and retool its manufacturing facility 

in Tennessee; $465 million to Tesla, which recently announced that 

it would pay off its loan five years early; and $50 million to the Vehicle Production Group to help develop a six passenger wheelchairaccessible vehicle that will run on compressed natural gas. 

Despite these successes, we are here today to discuss Fisker 

Automotive, which represents about 2 percent of the total ATVM 

portfolio. In April 2010, the Department approved two loans to 

Fisker totaling $529 million. In 2011, the Department capped the 

loan amount at $192 million after Fisker failed to meet its contractually required milestones. Earlier this week the Department required Fisker to return $21 million of this amount. 

There is no evidence that the Department did anything wrong 

with this loan; no evidence that the Department employed lesser 

due diligence than it did with successful loans to Ford, Nissan, 

Tesla, and VPG; no evidence that politics played any part in the 

award to Fisker. 

Unfortunately, there is evidence that the majority is disregarding 

the interest of taxpayers in holding this hearing today. Both Fisker 

and the Department raised concerns that the timing of today’s 

hearing could negatively impact the company’s efforts to obtain financing, avert bankruptcy and preserve the maximum recovery 

possible for American taxpayers. 

Of course, we are all concerned about the job creators. 

I ask unanimous consent to enter into the record the April 17th, 

2013 letter from Fisker’s counsel expressing the company’s willingness to cooperate with the committee, but requesting a brief delay. 

To be sure, the committee has a legitimate oversight interest in reviewing the Department’s program. I support robust efforts to learn 

more about these programs, but I hope that we can do that today 

in a responsible way. 

Mr. Chairman, I go back and I ask that the letter of April 17th 

be admitted into the record. 

Mr. JORDAN. I thank the gentleman for his statement. I would 

just point out evidence the Democrat party has all the same information we have. We think at the conclusion of this hearing there 

will be evidence to show why this hearing was needed and, frankly, 

why we had the CEO of Fisker here to give his side of the story 

as well. 

I would also point out the gentleman talked about the loan programs at the Department of Energy. To date, Solyndra is bankrupt, 

Beacon Power is bankrupt, Abound Solar is bankrupt, A123 Battery is having all kinds of problems, Nevada Geothermal is having 

all kinds of problems, Solo Power is having all kinds of problems, 

and, of course, the company we have in front of us today. So to say 

that this program at the Department of Energy is just wonderful 

ignores the facts, ignores the evidence. 

8 

With that, I would yield to the gentleman from Florida. 

Mr. CUMMINGS. Mr. Chairman, you never answered my question. 

I asked you could I have my document admitted into the record. 

Mr. JORDAN. You certainly can. 

Mr. CUMMINGS. Thank you. 

Mr. JORDAN. Without objection. 

Mr. JORDAN. The gentleman from Florida. 

Mr. DESANTIS. Thank you, Mr. Chairman. Thank you for calling 

this hearing. I think it is going to be useful to examine the mistakes made by both Fisker and the Department of Energy, and to 

highlight the waste of hundreds of millions of dollars in taxpayer 

funds. 

But I think these issues also bring up the larger issue of Government’s involvement in betting on handpicked private companies. I 

don’t think Government, through central planning, is competent 

enough to play venture capitalist, especially with other people’s 

money. The political allocation of capital undermines free enterprise by favoring cronyism over economic viability. I don’t think 

crony capitalism is consistent with the truly free market economy, 

and I definitely don’t think it is the recipe to get our Country back 

on track, which is something we need to do. 

So I look forward to the questions. Thank you for providing all 

this information for us, I think it has been very enlightening, and 

I thank the witnesses for their willingness to attend the hearing. 

Mr. JORDAN. I thank the gentleman. 

Members have seven days to submit opening statements for the 

record. 

We will now recognize our first panel. We have, first, Mr. Nicholas Whitcombe, who is the Supervisory Senior Investment Officer 

at the Department of Energy’s Loan Program Office. Mr. 

Whitcombe, we thank you for being here. 

We have Mr. Henrik Fisker, who is the Co-Founder, former CEO, 

and former Executive Chairman of Fisker Automotive. We know 

you had to travel a long way; we appreciate you being here, Mr. 

Fisker. 

And Mr. Bernhard Koehler, who is also Co-Founder, former Chief 

Operating Officer, and current Chief Executive Officer for Europe 

and the Middle East at Fisker Automotive. 

We thank all of you for being here. We have to swear you in, so 

if you would stand up and raise your right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth, so help you God? 

[Witnesses respond in the affirmative.] 

Mr. JORDAN. Let the record show that each of the witnesses answered in the affirmative. 

With that, we will move five minutes each. You get a lighting 

system that should be right in front of you. Make sure you turn 

your mic on, pull it close. You get five minutes, more or less, but 

try to keep it to five if you can. Hopefully we will get through all 

three and then we may have to, as I said before, break for votes 

and then come back for questions. 

Mr. Whitcombe? 

9 

WITNESS STATEMENTS 

STATEMENT OF NICHOLAS WHITCOMBE 

Mr. WHITCOMBE. Chairman Issa, Chairman Jordan, Ranking 

Member Cummings, Ranking Member Cartwright, members of the 

committee, thank you for the opportunity to testify before you 

today. My name is Nicholas Whitcombe, and until recently I served 

as the Acting Director of the Department of Energy’s Advanced 

Technology Vehicle Manufacturing Program. This was during 2012. 

I currently serve as a Supervisory Senior Investment Officer in the 

Loan Program Office, of which the ATVM is a part. I have been 

with the Department since 2009 and have over 20 years of commercial and lending experience for major global financial institutions. 

The LPO administers two loan programs, Section 1703 and 1705, 

for energy technologies authorized by Title XVII of the Energy Policy Act, as amended. It also administers direct loans for the Advanced Technology Vehicle Manufacturing Loan Program, as authorized under Section 136 of the Energy Independence and Security Act of 2007. Congress created these programs to support clean 

energy and an advanced technology vehicle project. As such, the 

LPO provides loan guarantees for cutting-edge, innovative energy 

technology and manufacturing generation projects in a wide variety 

of sectors, including renewable, nuclear, fossil, automotive, and 

transmission. As of today, the LPO has committed or closed nearly 

$35 billion in direct loans and loan guarantees, supporting nearly 

three dozen projects with total project costs over $55 billion. The 

financing has levered billion dollars of private investment, augmented the capacity of capital markets to finance innovative and 

large-scale clean energy projects. 

The ATVM Program. Created by Congress with strong bipartisan 

support, the ATVM Program was designed to accelerate the development and deployment of advanced technology vehicles that would 

help automotive manufacturers meet more stringent CAFE standards, create jobs, and reduce the Nation’s dependence on oil. 

The Program provides loans to automobile and automobile parts 

manufacturers for the cost of reequipping, expanding, or establishing manufacturing facilities in the United States to produce advanced technology vehicles or qualified components and for costs of 

associated engineering integration performed in the United States. 

The ATVM Program has received numerous applications from 

both automotive original equipment manufacturers and component 

manufacturers, and remains open to receive applications from the 

automotive industry on a continual basis. To date, the DOE has 

committed and closed five ATVM loans, totaling $8.4 billion, to 

automotive manufacturers large and small, and we are adopting 

cutting-edge technologies and deploying them into the market. 

We conduct rigorous due diligence to protect taxpayers’ interests. 

The LPO underwrites and structures its loans and loan guarantees 

to protect the interests of taxpayers and maximize the prospects of 

full repayment. Before making a loan or a loan guarantee, the LPO 

conducts extensive due diligence on the application, with rigorous 

financial, technical, legal and market analysis by DOE’s professional staff, including qualified engineers, financial experts, and 

outside advisors. A Government Accountability Office report stated 

10 

that ‘‘it is noteworthy that the process developed for performing 

due diligence on loan guarantee applications may equal or exceed 

those used by private lenders to assess and mitigate project risks.’’ 

Following the loan closing, the LPO monitors each borrower’s 

performance against its business plan and projections. As part of 

this process, the program works to mitigate risk to the portfolio. As 

the Allison Report stated, the LPO is not a ‘‘passive bystander’’ 

when monitoring a loan; rather, the LPO has the ability to reduce 

or mitigate risk of its portfolio over time and has ‘‘robust tools’’ for 

protecting itself from elective risk and to ensure adequate protection of the U.S. taxpayers. The Allison Report also confirmed that 

while these projects by their nature involve certain risk, the LPO 

portfolio is, as a whole, performing well. 

Fisker Automotive. On April 22nd, 2010, LPO closed a $529 million loan to Fisker Automotive for the development and production 

of two lines of plug-in hybrid vehicles, the Karma and the Atlantic. 

To date, $192 million has been disbursed to Fisker to fund eligible 

Karma expenses and to partially fund the purchase of the General 

Motors plant in Delaware. These funds were used, for example, to 

support engineering for the Karma at Fisker’s United States facilities in Anaheim, California to develop tools, equipment, and manufacturing processes. 

From the outset, the Department established rigorous benchmarks, keyed to progress on the Karma and Atlantic production 

lines, as conditions precedent to any disbursement of Fisker’s loan. 

As has been publicly reported, the Department understands that 

Fisker has recently faced certain financial difficulties and engaged 

in a process seeking additional private investment. 

The Department has acted decisively to protect the taxpayers’ interest since it became evident that Fisker faced financial difficulties. In June 2011, the Department ceased making disbursements 

to Fisker after the company fell short of the milestones required in 

the loan agreement. Since then, the Department has continued to 

communicate with Fisker as it has sought to revise its business 

plan and achieve profitability. The Department is continuing to 

communicate with Fisker regarding its obligations under the loan 

agreement and is committed to ensuring that the taxpayers’ interests are protected to maximize their loans received. 

I look forward to answering any of your questions. 

[Prepared statement of Mr. Whitcombe follows:] 

11 


Insert offset folio 1 here 80920.001

Written Statement of Nicholas Whitcombe 

Former Acting Director ofthe Advanced Technologies Vebicles Manufacturing Loan 

Program 

U.S. Department of Energy 

Before tbe 

Subcommittee on Economic Growth, Job Creation and Regulatory Affain 

Committee on Oversight and Government Reform 

United States House of Representatives 

April 24, 2013 

Introduction 

Chairman Issa, Chairman Jordan, Ranking Member Cummings, Ranking Member Cartwright, 

and Members of the Committee, thank you for the opporttmity to testify before you today. My 

name is Nicholas Whitcombe, and I served until recently as the Acting Director of the 

Department of Energy's (DOE) Advanced Technology Vehicles Manufacturing Loan Program. I 

currently serve as a Supervisory Investment Officer in the Loan Programs Office (LPO), of 

which the A TVM program is a part. 

The Loan Program Office 

The LPG administers two federal loan guarantee programs - Sections 1703 and 1705 - for 

energy technology projects authorized by Title XVII of the Energy Policy Act (EPAct) as 

amended. It also administers direct loans for the Advanced Technology Vehicles Manufacturing 

(ATVM) loan program as authorized under Section 136 of the Energy Independence and 

Security Act of 2007 (EISA). Congress created these programs to supp0l1 innovative clean 

energy and advanced technology vehicle projects. As such, the LPO provides loans and loan 

guarantees to cutting-edge, innovative, energy technology manufacturing and generation projects 

in a wide range of sectors including renewables, nuclear, fossil, automotive, and transmission. 

As of today, the LPO has committed or closed $35 billion in direct loans and loan guarantees, 

which support nearly three dozen projects, with total project costs greater than $55 billion. In 

2011, the LPO represented the largest single public or private source of debt fmancing for clean 

energy projects in the United States as recognized in the Bloomberg New Energy Finance, 2011 

Clean Energy & Energy Smart Technology League Tables. This financing has leveraged billions 

of dollars of private investment and augmented the capacity of capital markets to finance 

innovative and large-scale clean energy projects. LPO's projects include: 

• One oftlle world's largest wind farms; 

• The world's largest photovoltaic and concentrating solar power plants currently under 

constmction; 

• The first two all-electric vehicle manufacturing facilities in tlle United States; 

• A conditional commitment to the first connnercial nuclear power plant to be licensed and 

built in the United States in three decades; and 

• One of the country's first commercial-scale cellulosic ethanol plants. 
12 


Insert offset folio 2 here 80920.002

The ATYM Program 

Created by Congress with strong bipartisan support, the ATVM Program was designed to 

accelerate the development and deployment of advanced teclmology vehicles that would help 

automobile manufacturers meet more stringent CAFE standards, create jobs, and reduce the 

nation's dependence on oil. 

The ATVM Program provides loans to automobile and automobile parts manufacturers for the 

cost of reequipping, expanding, or establishing manufacturing facilities in the United States to 

produce advanced teclmology vehicles or qualified components and for costs of associated 

engineering integration performed in the United States. In 2009, Section 136 was amended to 

include ultra-efficient vehicles within the definition of advanced teclmology vehicles. The 

A TVM program differs from the Title XVII program in that the A TVM program provides direct 

loans of federal funds, rather than loan guarantees, to the borrowers. 

The ATVM Program has received numerous applications from both automobile original 

equipment manufacturers and component manufacturers and remains open to receive 

applications from the automotive industry on a continuous basis. To date, DOE has committed 

and closed five ATVM loans, totaling $8.4 billion, to auto manufacturers large and small who 

are adopting cutting-edge teclmologies and deploying them into the market. 

Rigorous Due Diligence to Protect Taxpayers' Interests 

Congress appropriated nearly $10 billion to cover the credit subsidy costs of A TVM loans and 

Title XVII loan guarantees, thereby acknowledging the inherent risks of funding new and 

innovative teclmologies in industries that were facing significant market and economic 

challenges. As former Assistant Secretary of the Treasury for Financial Stability Herbett Allison 

noted in a January 2012 report, since the LPO focuses "on providing support to projects 

involving innovative teclmologies that needed support to become commercialized and diffused 

through the marketplace, the supported projects inherently involve higher degrees of risk and 

uncertainty than projects that are typically financed in the banking and securities markets."! By 

appropriating this credit subsidy, Congress also ensured that estimated defaults, prepayments, 

fees, penalties, and other recoveries in the LPO's portfolio would be properly accounted for in 

the federal budget, pursuant to the Federal Credit Refonn Act. 

The LPO underwrites and structures its loans and loan guarantees to protect the interests of 

taxpayers and maxinIize prospects for full repayment. Before making a loan or loan guarantee, 

the LPO conducts extensive due diligence on the application, with rigorous fmancial, teclmical, 

legal and market analysis by DOE's professional staff, including qualified engineers and 

fmancial experts, and outside advisors. A Government Accountability Office report stated that, 

"it is noteworthy that the process [the LPO Title XVII loan guarantee program] developed for 

1 Herbert Allison, "Report of the Independent Consultant'. Review with Respect to the Department of Energy Loan 

Guarantee Portfolio," Janruuy 31, 2012. ami/able at 

h!m:Ht~'_Y!_1£~~bit~hQ~.,g!n~.rit~§lde(~!!u!lil~~t~t~~!illL~P-QrtJ~!ui9tL19Wl_ i\ng .... lU~M~~Jt~c~IlfQ.Ji~\1?~f. 

2 
13 


Insert offset folio 3 here 80920.003

performing due diligence on loan guarantee applications may equal or exceed those used by 

private lenders to assess and mitigate project risks. ,,2 

Following the loan closing, the LPO monitors each borrower's performance against its business 

plan and projections. As part of this process, the program works to manage risk to the portfolio. 

As the Allison Report stated, the LPO is not a "passive bystander" when monitoring a loan; 

rather, the LPO has the ability to reduce or mitigate risk in the portfolio over time and has 

"robust tools" for protecting itself from elective risk and to ensure adequate protection of the 

interests of U.S. taxpayers. The Allison Report also confirmed that while these projects by their 

uature involve certain risk:, LPO's portfolio as a whole is performing well. 

The ATVM Portfolio 

A TVM funding has played a critical role in the development of advanced technology vehicles by 

providing long-term capital when private financing was not available: 

The LPO provided a $5.9 billion loan to Ford Motor Company to upgrade and modernize 

thirteen factories across six states and to introduce new teclmologies to raise the fuel 

efficiency of more than a dozen popular vehicles, including Focus, Escape, Fusion, 

Taurus, and F-150 trucks, representing approximately 900,000 new vehicles annually. 

In Smyrua, Tennessee, the first advanced battery packs produced in the United States are 

coming off the production line of Nissan NOlth America's production plant. These 

advanced batteries are powering U.S.-made all electric Nissan LEAF cars. The 

construction of the L3-million-square-foot, state ofdle art battery facility was made 

possible through a loan from the LPO for up to $1.4 billion. 

Tesla Motors received a $465 million loan from the Department in 2010, allowing the 

company to reopen an auto manufacturing plant in Fremont, California and develop a 

manufacturing facility to produce battery packs, electric motors, and other powertrain 

components. Tesla vehicles have won wide acclaim, including the 2013 Car of the Year 

from both Motor Trend and Automotive Magazine. Tesla recently announced it will 

complete the repayment of its $465 million loan from LPO in 2017, five years ahead of 

schedule. 

The Vehicle Production Group received a $50 million loan from the Department in 

March 2011, allowing the company to support the development of the six-passenger MV1, a factory-built wheelchair accessible vehicle that will run on compressed natural gas. 

'Government Accountability Office, "DOE Loan Guarantees,ft March 2012, available at 

h!1p:flwww.gao.goviproductsIGAO-12-157. While the March 2012 GAO report focuses on the underwriting and 

diligence process for DOE loan guarantees under Title XVII of the Energy Policy Act of 2005, LPO, which manages 

both the Title XVII loan guarantee program and the A TVM loan program, employs similar underwriting and due 

diligence processes for both programs. 

3 
14 


Insert offset folio 4 here 80920.004

Fisker Automotive 

On April 22, 2010, the LPO closed a $529 million loan to Fisker Automotive for the 

development and production of two lines of plug-in hybrid electric vehicles: the Karma and the 

Atlantic. To date, $192 million of the loan has been disbursed to Fisker to fund eligible Kanna 

expenses and to partially fund the purchase of a former General Motors plant in Delaware. These 

funds were used, for example, to support engineering for the Karma at Fisker's United States 

facilities in Analleim, California to develop tools, equipment., and mannfacturing processes. 

From the outset, the Department established rigorous benchmarks, keyed to progress on the 

Karma and Atlantic product lines, as conditions precedent to any disbursements of Fisker's loan. 

As has been publicly reported the Department understands that Fiske!" has recently faced certain 

financial difficulties, has terminated a significant portion of its workforce, and has been engaged 

in a process of seeking additional private investment. 

The Department has acted decisively to protect the taxpayers' interest since it became evident 

that Fisker faced financial difficulties. In June 2011, the Department ceased making 

disbursements to FiskeI' after the company began to fall short of the milestones required in tile 

loan agreement. Since then, the Department has continued to cOlurnunicate with Fisker as it has 

sought to revise its business plan and achieve profitability. The Department is continuing to 

communicate with Fisker regarding its obligations under the loan agreement, and is committed to 

ensuring that the taxpayers' interests are protected to the maximum extent possible. 

Conclusion 

Four years ago, the American automobile industry was on the brink of collapse during a historic 

economic crisis. Now, in part because of help from the A TVM program, America's automotive 

industry is reinventing itself - expanding production, growing profits, creating jobs, and 

making more fuel efficient automobiles. While American manufacturing continues to face 

substantial challenges, its future prospects are stronger than they have been in over a decade. The 

Department looks forward to continuing its support of this success. 

I look forward to answering any question you may have. 

4 
15 

Mr. JORDAN. Thank you, Mr. Whitcombe. 

What we are going to do is we have commenting from Mr. Fisker 

to do your five minutes, more or less. Then we will have to wait 

to hear Mr. Koehler when we come back from recess. But in the 

interest of time, Mr. Fisker, go. 

STATEMENT OF HENRIK FISKER 

Mr. FISKER. Thank you, Chairman Jordan, Chairman Issa, Ranking Member Cartwright, and Ranking Member Cummings, and the 

subcommittee members. Thank you. My name is Henrik Fisker and 

I am the former CEO, Chief Executive Officer and Chairman of 

Fisker Automotive. 

From the outset, Fisker Automotive aimed to be a new American 

car company, setting pioneering standards for low-emission technology and cutting-edge design. I am proud of what Fisker Automotive and its incredible employees, shareholders, suppliers, dealers, and other stakeholders were able to accomplish: designing, engineering, and manufacturing an advanced plug-in hybrid vehicle 

from scratch and bringing it to production. We sold approximately 

2,000 of these vehicles to buyers around the world before having 

to cease production due to several difficult events. After resolving 

initial launch challenges, the cars perform well and customers love 

them. 

I am also proud that the Fisker Karma has been given many 

awards for its advanced technology, including Time magazine listing the car as one of the 50 Best Inventions of 2011. The technology that Fisker developed is cutting edge and will help pave the 

way for a new generation of American cars. 

This hearing presents an important opportunity to set the record 

straight about what the company and I did right, what went 

wrong, and where factors beyond our control intervened. This hearing is also an opportunity to address some of the misinformation 

that has circulated in recent weeks. 

Before we begin, I need to make an important statement about 

my testimony. I stepped down as Chief Executive Officer in early 

2012 and became Chairman of the Board. In March of this year I 

left Fisker Automotive and no longer speak for the company. While 

the company retains my name, we are not one and the same. 

I co-founded Fisker Automotive with several partners in Irvine, 

California in 2007 and we announced our plan for our first car, the 

Karma, in 2008. From the beginning, we knew that we would face 

significant challenges in building a plug-in hybrid vehicle from 

scratch. 

In early 2008, I was approached at a sustainability conference in 

California by a senior Department of Energy official. We discussed 

the technology that Fisker Automotive was developing and he encouraged the company to apply for a loan from the Advanced Technology Vehicles Manufacturing Program, ATVM. Fisker continued 

its conversations with the Department and the company applied for 

a loan at the end of 2008. At that time, we already had significant 

financial backing from private investors. 

In 2010, Fisker secured final approval for the two loans under 

the ATVM program. In total, the company drew down $192 million 

on the loans. The first loan supported American engineering for the 

16 

Karma, a car that was already designated for contract manufacturing in Finland before the company applied for the loan. 

The second loan was used to support the engineering and manufacturing of a more affordable car, the Atlantic, in the United 

States. The company drew down a total of $23 million on that loan. 

The Department’s loans to Fisker Automotive contained milestones and covenants that the company was supposed to meet to 

allow additional loan draw-downs. Fisker was transparent with the 

Department about its progress at all times. 

Some have alleged that the company only received the loans due 

to political connections. Let me be clear: I am not aware and do not 

believe that any improper political influence was used in connection with the company’s loan applications or subsequent negotiations with the Department of Energy. 

In 2011, the Karma ran into several significant obstacles that delayed our production and sales time line. First, regulatory approvals for the Karma took longer than anticipated; second, the Karma 

had two recalls related to parts provided by outside suppliers; 

third, our exclusive battery manufacturer filed for bankruptcy protection in mid-October 2012 and stopped manufacturing batteries; 

and, fourth, when Hurricane Sandy hit the northeast of the United 

States, over 330 Karmas were damaged beyond repair. This constituted a major share of the company’s inventory and resulted in 

a drastic loss of revenue. 

In spite of all these setbacks, I want to make clear that Fisker 

Automotive accomplished many notable achievements. We engineered and brought to market an exceptional new vehicle technology that won acclaim from customers and reviewers alike. 

Fisker still has the potential to build on those achievements if the 

company can secure financial and strategic resources. I sincerely 

hope that the company can find a way to move forward and repay 

its Department of Energy loans. Thank you. 

[Prepared statement of Mr. Fisker follows:] 

17 


Insert offset folio 5 here 80920.005

TESTIMONY OF HENRlK FlSKlR 

Subeommlttee on Eeonomle Growth, Job Creation, and Regulatory Affairs 

Committee on Oversight and Government Reform 

April 24, 2013 

Thank you, Chairman Jordan, Ranking Member Cartwright, and Members of the 

Subcommittee. My name is Henrik Fisker and J am the co-founder and former Chairman and 

Chief Executive Officer of Fisker Automotive. 

From the outset, Fisker Automotive aimed to be a new American car company, setting 

pioneering standards for low-emission technology and cutting-edge design. I am proud of what 

Fisker Automotive and its incredible employees, shareholders, Ruppliers, dealers, and other 

stakeholders were able to accomplish: designing, engineering, and manufacturing an advanced, 

electric plug-in hybrid engine vehicle from scratch and bringing it to production: We sold 

approximately 2,000 of these vehicles to buyers around the world before having to cease 

production due to several difficult events. After resolving initial launch challenges, the cars 

perform well and customers love them. Fisker still has the potential to build on these 

achievements if the company can secure financial and strategic resources. I sincerely hope that 

the company can find a way to move forward and repay its Department of Energy loans. 

I am also proud that the Karma has been given many awards for its advanced technology, 

including TIME magazine listing the car as one of the 50 Best Inventions of2011. The 

technology that Fisker developed is cutting edge and could help pave the way for a new 

generation of American car manufacturing. A decade from now, I hope we will look back on the 

last five years as the moment when the United States retook its leadership position to define the 

future of the automobile. 

This hearing presents an important opportunity to set the record straight: about what the 

company and I did right, what went wrong, lind where factors beyond our control intervened. 
18 


Insert offset folio 6 here 80920.006

This hearing is also an opportunity to address some of the misinformation that has circulated in 

recent weeks. 

Before we begin, I need to make an important note about my testimony. I stepped down 

as Chief Executive Officer in eady 2012 and became Chairman of the Board. In March of this 

year, r resigned from the Board and left Fisker Automotive. I do not speak for the company nor 

am I privy to details of the company's current financial condition or ongoing negotiations with 

the Department of Energy. While the company retains my name, we are not one and the same. 

The Fisker Automotive Ston 

1 co-founded Fisker Automotive with several partners in Irvine, California in 2007 and 

we announced our plans for our first car, the Karma, in 2008. From the beginning, we knew that 

we would face significant challenges in building an electric plug-in hybrid engine vehicle from 

scratch. We started out with a premium model so the cost of technology could be absorbed by 

the high sale value of the product - a well established model for new technology launches. 

Fisker's plans to build the Karma generated a great deal of interest and a large amount of private 

capital. In total, Fisker received over S I billion in private capital from investors in the United 

States and around the world that shared our vision for creating a new segment in 

environmentally-friendly vehicles that were designed and engineered in America. 

Fisker delivered its first Karma in late 20 I I, after battling through regulatory and supplier 

delays. In total, Fisker has sold approximately 2,000 Karmas to customers around the world. 

Our single biggest malket has been the United States but we also achieved notable success in 

Europe and elsewhere. 

After deliveries to customers began, the Karma had two recalls related to parts supplied 

by outside vendors. Millions of cars are recalled in the United States every year, including by 

some of the largest and most well-established auto groups. We were no exception. 

Nevertheless, the Karmas that have been delivered are operating smoothly and continue to 

receive fantastic customer reviews. The Karma is the first Amerioan car to have won the coveted 

Top Gear Luxury Car of the Year award and many customers report that they achieve better than 

100 MPG fa]' their daily driving. 

2 
19 


Insert offset folio 7 here 80920.007

The Karma is a technology leader that will pave the way for more affordabJe vehicles 

with the same, if not better, emissions and fuel economy. Once we developed and manufactured 

the technologies for the Karma, we planned to apply those technologies to a more affordable 

sedan that would be manufactured here in the United States. We called that car the Atlantic but 

it was also referred to as the Nina or Kx. Although the Atlantic has not yet gone into production, 

its engineering is all but complete. a feat financed primarily with private investments. I believe 

that the opportunity still exists for the Atlantic to be produced and make its mark in the 

automotive industry. 

Department of Energy Loans 

In January 2008, Fisker Automotive ~howed the concept car for the Karma at the North 

American International Auto Show in Detroit. Soon after, 1 was approached at II sustainability 

conference in California by Mr. John Mizroch, the then-Acting Assistant Secretary of the U.S. 

Department of Energy's Office of Energy Efficiency and Renewable Energy. We discus~ the 

technology that Fisker Automotive was developing and he encouraged the company to apply for 

a loan from the Advanced Technology Vehicles Manufacturing progranl (ATVM). Fisker 

continued its conversations with the Department and the company applied for a loan at the end of 

2008. At that time, we already had significant financial backing from private investors. 

During the loan application proceas, the Department conducted extensive due diligence 

over a period of nine months. The Department retained several independent consulting firms to 

assess all aspects of Fisker's business plan, technology, and finances. Fisker's business plan, 

based on extensive research, indicated II growing market for electric and plug-in hybrid vehicles 

due to stricter emission standards and growing consumer awareness. After II thorough 

independent examination and the input of its consultants, the Departmenl ib'Sued a conditional 

commitment letter in September 2009. At this point, the company had made significant progress 

and developed unique expertise in advanced technology plug-in hybrid powertrains. 

In early 2010, Fisker secured fmal approval for two loans under the A TVM program. In 

total, the company drew down $192 million on the loans. The first loan supported American 

design and engineering for the Karma, a car that was already deaignated for contract 

manufacturing in Finland before the company applied for the loan. At the time, the company 

3 
20 


Insert offset folio 8 here 80920.008

employed engineers and designers at its headquarters in California and additional contractors, 

suppliers, and consultants throughout the United States. In 2008, we conducted an extensive 

review of contract manufacturing facilities in the United States, but we were unable to find a 

facility that could meet our requirements. That year, the company decided on the contract 

manufacturer in Finland as the only viable option for manufacturing the Karma to our 

specifications and timetable. Per our agreement with the Department of Energy, all Karma loan 

funds were dedicated to supporting Karma engineering in the United States. Fisker Automotive 

has filed over 80 patents for new U.S. technologies in low-emission systems and engineering. 

Fisker Automotive also received a second loan for funds to support the engineering and 

manufacture of a more affordable car, the Atlantic, in the United States. The company drew 

down II total of $23 million on that loan. The company planned to use the Karma technology to 

create a second generation powertrain, with even better fuel economy and lower cost in support 

oftbe Atlantic. We purchased a closed GM factory in Delaware as the future site of production. 

We purchased that factory for its ready access to skilled labor, its proximity to major ports for 

export, and its state-of·the-art paint facility (the only one of its kind available for purchase at the 

time). We had hoped to employ up to 2,500 employees at that location when the Atlantic hit full 

production. 

The Department's loans to Fisker Automotive contained milestones and covenants that 

the company was supposed to meet 10 allow additional loan dmw-downs. For it variety of factors 

I will discuss shortly, the company met initial milestones before informing the Department that it 

would not meet certain future milestones on time. Fisker regularly apprised the Department of 

the company's progress. 

Some have alleged that the company only received the loans due to political connections. 

Let me be clear: I am not aware and do not believe that any improper political influence was 

used in connection with the company's loan application or subsequent negotiations with the 

Department of Bnergy. As stated earlier, we were approached and encouraged to apply for a 

loan by the Department. 

The Advanced Technology Vehicles Manufacturing program was approved by Congress 

in 2007 to provide financing to American companies that had the knowledge and wherewithal to 

4 
21 


Insert offset folio 9 here 80920.009

develop the next generation of automobile technologies. Fisker Automotive was not only 

leading the way in developing advanced electric plug-in hybrid powertrain technology but we 

had attracted significant private capital during a very difficult investment period. By the time 

Fisker applied for the loan at the end of 2008, it had already brought together many of the best 

and brightest automotive engineers in the country. Ultimately, the company attracted over $1 

billion in private capital from around the world .- before and after the Department ofEnergy 

loans. 

Rougb Roads 

Fisker Automotive began drawing down on the Karma loan in April 2010. In October 

2010, We unveiled the Karma that was to go into production with its advanced powertrain 

technology. In 20 II, the Karma ran into several significant obstacles. First, regulatory 

approvals for the Karma in the United States took longer than anticipated. Since the Karma was 

built from scratch on a totally new platform with a new powertrain, the BPA and National 

Highway Transportation Safety Administration required additional time to evaluate, test, and 

cventually ccrtify it. That review period and some initial parts supply issues significantly 

delayed our production schedule and delivery to customers. 

Second, after extensive U.S. certification, the Karma was launched in 2011. There were 

two recalls, but both were related to parts provided by outside suppliers, not the plug-in hybrid 

technology developed by the company. Such recalls are not unusual for newly launched 

automobiles but thcy are particularly difficult for a yotmg company with limited resources. The 

recalls generated bad publicity, diverted management attention, impacted sales, and further 

delayed our production schedules. 

Third, Fisker Automotive had an exclusive contract with A123 Systems in Massachusetts 

to supply the vehicles with lithium ion cells, and jointly develop the battery pack to fit the Karma 

platform. Before we entered into this exclusive agreement, we did a thorough analysis of several 

lithium ion battery manufacturers. but either they could not deliver to our specifications or had 

an exclusive contract with another vehicle manufacturer. After we chose A I 23, it took an 

extended period to develop the final battery pack for the Karma. Sadly, A 123 filed for 

bankruptcy protection in mid-October 2012 and stopped manufacturing batteries. As a result, 

5 
22 


Insert offset folio 10 here 80920.010

Fisker Automotive had to cease production of the Karma. We explored options for other battery 

suppliers, but due to large investment costs and long development cycles. we could not secure 

arrangements that would allow us to resume production immediately. This was a crippling factor 

in restarting production of the Karma. 

And fourth, two weeks after A123's bankruptcy. Hurricane Sandy hit the Northeast of the 

United States. Port Newark New Jersey is one of the largest vehicle bandling facilities in the 

United States and many thousands of vehicles were flooded. Over 330 Karmas were waiting for 

transshipment and were damaged beyond repair during this unforeseen natural disaster. This 

constituted II major share of the company's inventory and resulted in II drastic loss in revenue. 

DrivinG Forward 

In spite of all these setbacks, ] want to make it clear that Fisker Automotive accomplished 

many notable achievements. We engineered and brought to market an exceptional new vehicle 

technology that won acclaim from customers and reviewers !\like. Fisker still has the potential to 

build on thaI success ifthe company can secure financial and strategic resources. J sincerely 

hope that the company can find a way to move forward and repay its Department of Energy 

loans. 

6 
23 

Mr. JORDAN. Thank you, Mr. Fisker. 

We will stand in recess for 25 minutes, more or less. 

[Recess.] 

Mr. JORDAN. The committee will come to order and, Mr. Koehler, 

you are up for your five minutes. 

STATEMENT OF BERNHARD KOEHLER 

Mr. KOEHLER. Thank you and good afternoon, Mr. Chairman, 

Ranking Member Cartwright, and distinguished members of the 

subcommittee. My name is Barny Koehler and I am a co-founder 

and currently the Chief Executive Officer in Europe and the Middle 

East at Fisker Automotive. 

I have been in the automotive industry for 33 years and have experience in prototyping and overall product creation from positions 

with several leading carmakers, including BMW, Aston Martin, 

and Ford Motor Company. 

In 2005, Henrik Fisker and I founded Fisker Coachbuild. Two 

years later, in 2007, Fisker Coachbuild and powertrain developer 

Quantum Technologies formed Fisker Automotive. Fisker Automotive is an innovative company with a mission to develop and create fuel efficient vehicles with style, passion, and performance. 

I understand that today’s hearing will largely focus on some of 

the problems our company is facing, but in the next few minutes 

I would also like to highlight some of the company’s achievements. 

In 2007, Henrik and I recognized that there was a gap between 

gas-powered vehicles and all-electric battery powered vehicles envisioned for the future. So we set out to create a car that could 

bridge this gap through the use of innovative technology that provides the power and efficiency of an all-electric drive with extended 

range provided by an onboard generator powered by a gasoline engine. 

Others shared our vision. Before we heard of the Department of 

Energy’s ATVM loan, Henrik and I successfully raised private capital to support the development of our concept. Fisker Automotive 

ultimately raised approximately $1.2 billion of private funding. Of 

course, the company also obtained a loan from the Department of 

Energy and we used $193 million of loan funds to support our vision. 

Fisker Automotive brought together in California a very talented 

group of people that had experience with automakers and suppliers 

from all around the world. This dedicated and diverse team, with 

a bold entrepreneurial spirit, worked tirelessly to bring our concept 

to life. With the Fisker Karma, we successfully designed, engineered, and delivered the world’s first plug-in series hybrid electric 

vehicle. When fully charged, the Karma allows for an all-electric 

drive of up to 50 miles, plus up to another 250 miles with the onboard range extender. 

The Karma has been certified in the United States, in Europe 

and Asia, and you can see it being driven on the road today. The 

vision has become a reality. 

You cannot build a successful car company with just one car; you 

must have a portfolio with multiple models for consumers. The 

business plan for our second generation car, called the Atlantic, has 

been in development for more than two years, and the design and 

24 

engineering work for the car is almost complete. Importantly, the 

Atlantic would feature an improved next-generation version of the 

innovative EVer powertrain technology. Given the experience and 

learning gained from the Karma, our expectation was that the Atlantic would be sold at lower prices, allowing a broader customer 

base the opportunity to own a Fisker car. 

Without question, every automotive manufacturer faces challenges when new vehicles are developed and launched, and Fisker 

was no exception. While initial production of the Karma began in 

March of 2011, development and implementation of Fisker’s tooling 

and component specifications and supply chain development moved 

the commencement of serial production to June 2011. Final emission testing and EPA approval was granted on October 3rd, 2011. 

Shortly after production of the Karma began, a manufacturing defect in our batteries supplied by A123 resulted in a safety recall 

and a shutdown during performance testing by Consumer Reports. 

We were left without a battery supplier after A123 filed for bankruptcy in October 2012. Faced with these challenges, Fisker has 

not been able to restart vehicle production since a previously-scheduled seasonal shutdown began in July 2012. 

The difficulties that Fisker faced were not unusual for any auto 

manufacturing and are common in the industry. Despite these difficulties, I cannot understate the achievements of our employees 

who worked on the Karma program. I am grateful for their commitment and dedication. Our company took a giant step in combining 

the usability of an everyday car with the benefits of an all-electric 

vehicle. While I do not know exactly what the future holds for 

Fisker Automotive, including whether the company will find new 

investors or whether the company may be obliged to seek bankruptcy protection to facilitate its continued efforts to preserve value 

for all stakeholders, I intend to keep working toward achieving the 

mission and vision for the company. 

Thank you, and I look forward to any questions you may have. 

[Prepared statement of Mr. Koehler follows:] 

25 


Insert offset folio 11 here 80920.011

WRITTEN TESTIMONY OF 

BERNHARD KOEHLER 

CO-FOUNDER AND CHIEF EXECUTIVE OFFICER - EUROPE AND THE MIDDLE 

EAST, FISKER AUTOMOTIVE 

BEFORE THE 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

SUBCOMMITTEE ON ECONOMIC GROWTH, JOB CREATION AND 

REGULATORY AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

APRIL 24, 2013 

Good morning, Mr. Chainnan, Ranking Member Cartwright, and distinguished members 

of the Subcommittee. My name is Barny Koehler and I am a co-founder and currently the Chief 

Executive Officer in Europe and the Middle East at Fisker Automotive. 

I have been in the automotive industry for 33 years, and have experience in automobile 

prototyping and overall product creation from positions with several leading automobile makers, 

including BMW, Aston Martin, and Ford Motor Company. 

In 2005, Heurik Fisker and I founded Fisker Coachbuild. Two years later, in 2007, 

Fisker Coachbuild and powertrain developer Quantum Tec1mologies formed Fisker Automotive. 

Fisker Automotive is an iunovative company with a mission to develop and create 

enviromnentally conscious vehicles with style, passion, and performance. 

I understand that today's hearing will largely focus on some of the problems our 

company is facing. But in the next few minutes, I would also like to highlight some of the 

company's achievements. 

In 2007, Heurik and I recognized that there was a gap between gas-powered vehicles and 

all-electric battery powered vehicles envisioned for the future. So, we set out to create a car that 

could bridge this gap through the use of iIlIlovative technology that provides the power and 

efficiency of an all-electric drive with extended range provided by an onboard generator powered 

by a gasoline engine. 

Others shared our vision. Before we heard of the Department of Energy's ATVM Loan 

Program, Heurik and I successfhlly raised private capital to support the development of our 

concept. Fisker Automotive ultimately raised approximately 1.2 billion dollars of private 

funding. Of course, the company also obtained a loan from the Department of Energy, and we 

used $193 million of those loan funds to support our vision. 

Fisker Antomotive brought together in California a very talented group of people that had 

experience with automaicers and suppliers from all arOlmd the world. This dedicated and diverse 

team, with a bold entrepreneurial spirit, worked tirelessly to bring our concept to life. With the 

Fisker Karma, we successfully designed, engineered, and delivered the world's frrst plug-in 
26 


Insert offset folio 12 here 80920.012

series hybrid electric vehicle. The Karma has been certified in the United States, Europe, and 

Asia, and you can see it being driven on the road today. The vision has become a reality. 

The Karma uses a brand new powertrain technology - we call it the Electric Vehicle with 

extended range or EVer - which consists of an efficient gasoline engine, an electric generator, a 

Lithium-ion battery pack, and two electric motors at the rear wheels. When fully charged, the 

Karma allows for an all-electric drive of up to 50 miles plus up to another 250 miles with the onboard range extender. 

The Kanna has won numerous awards from well regarded publications. In 20 II, it won 

the BBC Top Gear Luxury Car of the Year award; Automobile magazine named it 2012 Design 

of the Year; and TIME magazine listed the Karma as one of the 50 Best Inventions of 20 11. 

You cannot bnild a successfhl car company with just one car - you must have a portfolio, 

with multiple models for consumers. The business plan for our second generation car - called 

the Atlantic - has been in development for more than two years, and the design and engineering 

work for the car is ahnost complete. Importantly, the Atlantic would feature an improved nextgeneration version of the innovative EVer powertrain technology. Given the experience and 

learning gained from the Karma, our expectation was that the Atlantic would be sold at lower 

prices, allowing a broader customer base the opportunity to own a Fisker car. 

Without question, every automotive manufacturer faces challenges when new vehicles 

are developed and lannched, and Fisker was no exception. While initial production of the Karma 

began in March 20ll, development and implementation of Fisker's tooling and component 

specificatious and supply chain development moved the commencement of serial production to 

June 2011. Final emissions testing and EPA approval was granted on October 3,2011. Shortly 

after production of the Kanlla began, a manufacturing defect in our batteries supplied by AI23, 

Inc. resulted in a safety recall and a shutdown during performance testing by Consumer Reports. 

We were left without a battery supplier after Al23 filed for bankruptcy in October 2012. Faced 

with these challenges, Fisker has not been able to restart vehicle production since a previouslyscheduled seasonal shutdown began in July 2012. At the same time, our operating position has 

been impacted by the effects of Hurricane Sandy, when 338 Karma sedans were destroyed in the 

port of Newark, New Jersey, resulting in a loss of more than $30 million of irreplaceable 

inventory. 

The difficulties that Fisker faced were not unusual for any automotive manufacturer aud 

are common in the industry. Despite these difficulties, I cannot understate the achievements of 

our employees who worked on the Karma program. I anl gratefnl for their commitment and 

dedication. Our company took a giant step in combining tlle usability of an everyday car with the 

benefits of an all-electric vehicle. While I do not know exactly what the future holds fOT Fisker 

Automotive, including whether the company will find new investors or whether tlle company 

may be obliged to seek bankruptcy protection to facilitate its continued efforts to preserve value 

for all stakeholders, I intend to keep working toward achieving the mission and vision of the 

company. 

Thank you. I look forward to any questions you may have. 

2 
27 

Mr. JORDAN. Thank you, Mr. Koehler. 

We now turn to the chairman of the full committee. The gentleman from California is recognized for five minutes. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. Fisker, I have a number of questions for DOE, but I have 

one question for you and for your co-founder. Why did you give up 

any rights to your intellectual property being within the entity the 

Department of Energy invested in for purposes of development of 

technology? 

Mr. FISKER. Chairman, we have developed a new technology 

where we have filed for several patents. 

Mr. ISSA. In Fisker Automotive? 

Mr. FISKER. In Fisker Automotive. And they can take up to five 

years until they are fully granted. 

Mr. ISSA. So the other patents that are in the portfolio that are 

not in your possession, why were those not in Fisker Automotive? 

Mr. FISKER. When Fisker Automotive started, it was founded by 

Quantum Technologies and Fisker Automotive in 2007, and everything that was developed in Fisker Automotive from that point in 

time are remaining with the company and engineers have developed the most advanced technology throughout the couple of years 

before we got the Department of Energy loan, and all the patents 

that are developed in Fisker Automotive stays within Fisker Automotive. 

Mr. ISSA. I appreciate that, and the committee would like to follow up to make sure we have that. We don’t have documents to 

that effect. Thank you. 

Mr. Whitcombe, all the way back in June 2nd of 2010, an email 

says Fisker’s draw request may be in limbo due to a lack of compliance with financial covenants. 

Mr. CARTWRIGHT. Mr. Chairman, I raise a point of order in sending that. I must object to inclusion of that email into the hearing 

record. 

Mr. ISSA. On what basis? 

Mr. CARTWRIGHT. Mr. Chairman, did you or your staff speak to 

the person who wrote this email before you released them yesterday to The Associated Press? 

Mr. JORDAN. I am not sure what the gentleman’s point is. 

Mr. ISSA. I don’t hear a point of order, and I have been around 

here 12 years. 

Mr. CARTWRIGHT. Well, Mr. Chairman, my staff did speak to the 

author of these emails. 

Mr. ISSA. Mr. Chairman, I must insist the gentleman, if he is 

going to play the game of point of order, please state his point of 

order. 

Mr. CARTWRIGHT. This is the point. May I be heard? 

Mr. JORDAN. The gentleman is recognized. 

Mr. CARTWRIGHT. Nobody on the Republican staff contacted her 

before they released some select emails sent by her, and I wonder 

if you knew that, Mr. Chairman. 

Mr. ISSA. Mr. Chairman, the man is asking a question and creating testimony. That is not a point of order. Can I ask he please 

state his point of order? 

Mr. JORDAN. State your point of order. 

28 

Mr. CARTWRIGHT. Mr. Chairman, were you aware that her job responsibilities did not include reviewing Fisker’s performance on the 

loan? 

Mr. JORDAN. That is not a point of order. The gentleman is not 

stating a point of order. 

The gentleman from California is recognized. 

Mr. ISSA. Thank you. 

Mr. CARTWRIGHT. So, to be clear, the majority apparently has no 

idea of the source and the meaning of this evidence and has no 

basis to know whether or not this email is significant. 

Mr. JORDAN. The gentleman from California is recognized and 

will be given an additional minute and a half on his time. 

Mr. ISSA. Thank you. 

Mr. Whitcombe, are you aware of any question, and I will have 

this email given to you momentarily; I apologize if you don’t already have it. But was there, on or before June 2nd, 2010, any 

question, to your knowledge, as to Fisker’s request that in fact it 

may be in limbo, as this one says, because of lack of compliance 

with financial covenants? 

Mr. WHITCOMBE. Thank you for the question. I am briefly scanning this document that I can read here. I have identified the two 

individuals as consultants to the Department of Energy Loan Program Office. With respect to it being in limbo due to lack of compliance with financial covenants, I would believe that this is part of 

the normal course of discussion that all parties and consultant 

would have between each other. 

Mr. ISSA. No, I appreciate that. My time is limited. If in fact 

there is a failure to meet financial covenants, isn’t it true the loan 

has to be called and either renegotiated or the money pulled back? 

Mr. WHITCOMBE. That is not true. As a senior secured lender, 

you retain all your rights under the loan agreement under the status of senior secured lender. 

Mr. ISSA. What do you do when somebody doesn’t meet their requirements, do you waive them? And, if so, is there a formal process? 

Mr. WHITCOMBE. This document does not say that. 

Mr. ISSA. I am asking you about what happens when a company 

doesn’t meet its promises the way Fisker didn’t in a number of 

areas related to the loan agreement based on documents we have 

good faith to believe are accurate and true. 

Mr. WHITCOMBE. In terms of the draw request and lack of compliance with financial documents, the company would certify that 

it met the financial conditions of any draw request. It would certify 

to the senior executive of the company; we would review that kind 

of information on a continuing basis relative to that certification to 

advance any funds. 

Mr. ISSA. Okay, well, let’s go on to something that is a little more 

mainstream Department of Energy. I have, from the same individual, a document, and I will read the extract. Gentlemen, just 

wanted you to be aware of a request from Chairman Issa. Assume 

that GC, general counsel, I assume, or CI will reach out to you regarding the requested documents. 

Now, that was a request on February 13th of 2012. I haven’t received those documents. Do you believe that in fact, since clearly 

29 

you, as an organization, seemed to know the request was in, can 

I expect to see those documents pursuant to that request anytime 

soon? 

Mr. WHITCOMBE. The loan guaranty program seek to provide all 

the information that you need, as I understand it. 

Mr. ISSA. No. Stop. You don’t determine what we need. We gave 

you a request for documents. Will you comply with the request? 

Not what you darn well think I need. This Administration has consistently, over a period of at least the years in which the Republicans have been a majority, decided that they will decide what we 

need and then not give us what we ask for. I am asking you today 

are you prepared, on behalf of the Department of Energy, to comply 

with the request, a substantial compliance with what the request 

says, not what you think I need? 

Mr. WHITCOMBE. Congress has asked for literally millions of documents, encompassing literally thousands of DOE man-hours. We 

are attempting to comply with all the requests. 

Mr. ISSA. Is my request here for millions of documents? 

Mr. WHITCOMBE. I don’t believe so. 

Mr. ISSA. Okay. Are you aware that Secretary Chu appeared before this committee and I asked him at that time, Secretary, in 

modern technology, should you be delivering us paper documents 

with no Bates stamps? Couldn’t you deliver us electronic data responsible? And he said we should be able to, more or less. 

I might suggest to you that no production has occurred and, in 

fact, it is a push of a few buttons to deliver a substantial amount 

of this electronically.. And if you care about the taxpayers’ money, 

as people on the dais here do, I would strongly suggest you go back, 

look at the record of previous hearings, and begin complying 

through the most expeditious means. This committee has a long 

history of taking partial document compliance. We work with agencies and, in fact, the chairman of the subcommittee and all the subcommittees have standing orders to meet with and attempt to narrow any request in concert with the agency so that we only get 

what we need. We are willing to do that in every case. But it has 

been a year. And to have a hearing this morning in which the 

ranking member pointed out that we didn’t have a witness because 

they only had eight days to respond, I have to say, when you have 

had more than a year, it is unconscionable to call this the most 

open and transparent Administration, when in fact what you are 

is a stonewalling Administration and one that has lost over $100 

million of taxpayers’ money, and the record clearly indicates it 

could have been prevented. 

I yield back. 

Mr. JORDAN. I thank the gentleman and now recognize the ranking member of the subcommittee, the gentleman from Pennsylvania, Mr. Cartwright. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. At this time I do 

wish to register my lament that it is unclear whether the investigative standard of the majority here is to conduct an investigation 

and interview witnesses before or after holding a public hearing 

and leaking documents to the media. However, I do appreciate 

Chairman Issa’s comments that the DOE has done a pretty good 

job overall with the ATVM program. 

30 

Under that program, Congress appropriated money for credit 

subsidies which has allowed DOE to issue loan guarantees. The 

amount of losses if Fisker fails is only a tiny fraction of the portfolio’s value and is well below the amount Congress appropriated 

for some expected defaults. 

Now, Mr. Whitcombe, isn’t it true that the Energy Independence 

and Security Act of 2007 authorized DOE to make about $25 billion 

in loans in the ATVM program? 

Mr. WHITCOMBE. The Act did authorize exactly $25 billion in 

loans. 

Mr. CARTWRIGHT. And, Mr. Whitcombe, isn’t it also the case that 

President Bush signed the fiscal year 2009 continuing resolution 

which provided the ATVM loan program with about $7.5 billion in 

appropriations to cover the program’s credit subsidy costs, the pool 

of money that would be set aside to cover expected losses? Is that 

true? 

Mr. WHITCOMBE. The continuing resolution for $7.5 billion was 

appropriated for credit subsidy. 

Mr. CARTWRIGHT. Mr. Whitcombe, I understand that so far DOE 

has issued five loan guarantees under the ATVM program worth 

$8.4 billion, correct? 

Mr. WHITCOMBE. Yes, sir. 

Mr. CARTWRIGHT. Mr. Whitcombe, the amount of money that 

Fisker has received is only $192 million, or about 2.3 percent of the 

$8.4 billion for the program as a whole, isn’t that correct? 

Mr. WHITCOMBE. Yes, sir. 

Mr. CARTWRIGHT. Now, Mr. Whitcombe, let’s do a little math. If 

the worst case scenario develops and Fisker cannot repay the 

amount of its loan already received, isn’t it true that the ATVM 

program incurs only about a 2.3 percent loss against the total portfolio value? 

Mr. WHITCOMBE. Quickly looking at your math, that looks about 

right. 

Mr. CARTWRIGHT. So in the world of project finance, is a total 

portfolio loss of about 2 percent considered failure? 

Mr. WHITCOMBE. Any loss is unacceptable, but 2 percent for a 

senior secured loan portfolio is acceptable. 

Mr. CARTWRIGHT. Thank you. 

Now, Mr. Whitcombe, looking at chart number 2, we know that 

both Ford and Nissan appear to be doing well and they have the 

ability to repay their loans under this program. Tesla, I understand, is already paying back its loan. The fifth only other loan 

went to an applicant called the Vehicle Production Group, and they 

only represent less than 1 percent of the portfolio’s total value. 

Mr. Whitcombe, doesn’t this mean that thus far, after taking into 

account Fisker’s maximum potential losses, 98 percent of the portfolio appears to be doing well and has the ability to repay its loan? 

Mr. WHITCOMBE. It appears that to be the case, sir. 

Mr. CARTWRIGHT. Ninety-eight percent grade usually gets you an 

A+. Wouldn’t any private equity firm love to have a success rate 

of 98 percent? 

Mr. WHITCOMBE. Yes, they would. I remind you we are senior secured lender, but 98 percent would be excellent. 

31 

Mr. CARTWRIGHT. Mr. Chairman, any objective analysis of 

ATVM’s potential losses from Fisker would conclude that the program is not only exceeding expectation, but any losses accruing 

from Fisker would be well within the reserves Congress already appropriated for this very purpose. 

With that, I yield back. 

Mr. JORDAN. Mr. Whitcombe, do you recall any speeches made by 

President Obama, Vice President Biden, or Secretary Chu where 

they indicated to the American taxpayers prior to this program and 

you loaning out $25 billion, do you recall any speeches where they 

said, you know what, American taxpayer, we are only going to lose 

2 percent of your money? Do you recall any speeches to that effect? 

Mr. WHITCOMBE. No, sir. 

Mr. JORDAN. No, sir? Okay. Thank you. 

I recognize the gentleman from Florida. 

Mr. DESANTIS. Thank you, Mr. Chairman. 

I am on slide 4B. 

[Slide.] 

Mr. DESANTIS. Mr. Whitcombe, one of the milestones associated 

with Fisker’s loan was that it launched the Karma by February of 

2011 and it failed to meet that milestone, is that correct? 

Mr. WHITCOMBE. In February 2011, the company had represented that it did meet its commercial milestones. 

Mr. DESANTIS. What happened in fact, did they meet the milestone or not? 

Mr. WHITCOMBE. In February 2011, the company represented to 

us—— 

Mr. DESANTIS. What happened in fact? I am not asking what 

they represented. Did it meet the milestone or not? 

Mr. WHITCOMBE. In June 2011, the DOE disagreed—— 

Mr. DESANTIS. That is not my question. It is a simple yes or no 

answer. 

Mr. WHITCOMBE. The DOE disagreed—— 

Mr. DESANTIS. In February 2011, either commencement of commercial production of the Karma vehicle happened in fact or not. 

Based on your knowledge now, sitting here today, did it happen or 

did it not happen? 

Mr. WHITCOMBE. We believe it did not happen and, therefore, we 

took decisive action. 

Mr. DESANTIS. Well, I appreciate it. I am going to give you a 

chance to talk about that. I have limited time. 

Slide 4C. 

[Slide.] 

Mr. DESANTIS. According to the DOE’s quarterly credit report, it 

appears that although Fisker did miss this milestone in February 

2011 for launching the Karma, that the loan was not frozen for 

Fisker until June of 2011. Is that accurate? 

Mr. WHITCOMBE. During that interim period we did not have 

enough information to determine that. 

Mr. DESANTIS. Is it accurate, though? Is it an accurate statement? 

Mr. WHITCOMBE. At that point in time we acquired the best 

available information to make that determination. 

Mr. DESANTIS. Is what I stated true or not true? 

32 

Mr. WHITCOMBE. Can you restate your question? 

Mr. DESANTIS. Yes. It appears that Fisker missed the milestone 

requirements in February 2011 for launching the Karma, but that 

DOE did not freeze Fisker’s loan until June of 2011. Is that accurate? 

Mr. WHITCOMBE. Hindsight is 20/20. 

Mr. DESANTIS. I am not asking about hindsight. I am just asking 

whether it is accurate. 

Mr. WHITCOMBE. At that point in time, the loan program—— 

Mr. DESANTIS. Sir, is it accurate, yes or no? 

Mr. WHITCOMBE. Was it accurate in June 2011, when they made 

that determination? 

Mr. DESANTIS. So you froze it in June 2011, correct? 

Mr. WHITCOMBE. Yes, sir. 

Mr. DESANTIS. Okay. 4C. 

[Slide.] 

Mr. DESANTIS. Based on DOE’s quarterly credit report, it appears that Fisker misled the DOE by stating that it had launched 

production of the Karma in March of 2011, when in fact it had not. 

And the report further states that DOE did not figure this out until 

June 2011, at which point it froze the loan. Is that true, did Fisker 

misrepresent information to DOE? 

Mr. WHITCOMBE. If you would give me an opportunity, I would 

like to read what is boxed out in the red. 

Mr. DESANTIS. Sure. 

Mr. WHITCOMBE. Sir, I don’t read the word misread here. I believe there was a difference of opinion, and our determination at 

that point in time was that they had not met the launch milestone, 

based on the best available information that the DOE had at that 

time, in June 2011. 

Mr. DESANTIS. Right. So they did not provide you the information before that time. 

Mr. WHITCOMBE. We worked all during that time period to get 

the best available information that ultimately led to the determination that they had not met the commercial launch milestone and, 

therefore, we took decisive and conservative action to stop funding 

under the loan agreement. 

Mr. DESANTIS. So basically, on February 25th, 2011, Fisker re- ceived $10 million; on March 24th, 2011, Fisker received $9 million 

from DOE; April 21st, 2011, another $10 million from DOE; May 

26th, 2011, Fisker received another $3 million from DOE. So this 

adds up to $32 million disbursed between the time that Fisker 

missed its milestone and the time the DOE determined Fisker 

missed the milestone and froze the loan. So it seems to me that 

there was a failure to identify this and that this $32 million was 

essentially wasted because DOE did not confirm early enough that 

Fisker had not in fact launched the car. And, in fact, Fisker did not 

launch the Karma until September of 2011. Is that true, that it 

was not actually launched until September of 2011? 

Mr. WHITCOMBE. We have a very rigorous portfolio management 

process with professional managers overseeing each loan. Those 

professional managers are in constant contact with the company 

and reviewed the documentation that is provided by the company 

to us, and look at all sorts of other information as well, including 

33 

financial and technical data. At the point in time when the company requested loan advances and certified against those loan advances, we reviewed that information and made loan advances 

against that. When we became uncomfortable with the information 

that they were providing to us that suggested that they had not 

met the commercial launch date, which was very important to the 

Department of Energy, we made no further loan advances. 

Mr. DESANTIS. Okay. So in spite of that process, though, $32 million was given to Fisker that ultimately is going to fall on the taxpayers. So I guess my final question, I am running out of time, it 

did not become public that the loan was frozen until February of 

2012. So this allowed Fisker to essentially solicit equity under the 

false notion, implicit notion that the company was still on good 

terms with the Department of Energy. So after the DOE froze 

Fisker’s loan in June of 2011, why did the DOE not make this public? If the taxpayer was in fact on the hook, don’t you think that 

they had a right to know that the loan was not going smoothly? 

Mr. WHITCOMBE. Fisker is responsible for raising its own capital 

and notifying investors of its situation. Having said that, as to why 

no press releases or no public notification were provided by the Department of Energy, I will have to take that question on the record, 

sir. 

Mr. DESANTIS. So you don’t have an answer for it? 

Mr. WHITCOMBE. I don’t have an answer, sir. 

Mr. DESANTIS. Okay. 

Well, Mr. Chairman, thank you. 

Mr. JORDAN. I recognize the gentleman from Maryland, the ranking member of the full committee. 

Mr. CUMMINGS. I am really listening to all this and I have to tell 

you, Mr. Fisker, I don’t know if these people are really listening to 

what you said. First, I am just looking at your testimony. You talk 

about the problems that you all had; first, regulatory approvals for 

the Karma in the United States took longer than anticipated. That 

was number one. 

There were two recalls of the Karma, but both were related to 

parts provided by outside suppliers, not the plug-in hybrid technology developed by the company, is that right? Then you had another problem. Fisker Automotive had an exclusive contract with 

A123 Systems in Massachusetts to supply the vehicle with lithium 

ion cells and jointly develop the battery pack. They had a problem, 

right? So you didn’t have any batteries, is that right? Mr. Fisker, 

I am talking to you. 

Mr. FISKER. Yes, congressman. When we developed the plug-in 

hybrid system, the advanced technology, obviously we knew that 

there was a lot of risk. It is a new technology; it is very difficult 

to develop. But we finally did get the vehicle into production. However, the battery provider did have initial problems and, of course, 

that meant that we had problems as well. So there was a recall 

from the battery manufacturer that affected us and our production. 

Mr. CUMMINGS. Mr. Fisker, then you had a fourth problem, and 

that was Hurricane Sandy hit the northeast United States, and 

that created a problem because you lost 330 Karmas were damaged, is that right? 

Mr. FISKER. Congressman, that is correct. 

34 

Mr. CUMMINGS. You had some problems. You know, one of the 

things that always concerns me about these hearings is when accusations are made that are not fair. And I don’t know whether it is 

fair or not, so I have to ask you some questions, because I can 

guarantee you I watched the way the press scurried quickly when 

Chairman Issa was making some statements about all of this, so 

I want to make sure that we correct it, because after I am long 

dead and gone, I want to make sure that people who appear before 

this committee, that we make it clear that if there is something accurate, that is one thing; but if it is not accurate, I want to know. 

I will ask you this. Were you and your investors engaged in a 

pay-to-play relationship with the Obama Administration? 

Mr. FISKER. No, we are not. 

Mr. CUMMINGS. And I want to go now to some of the other witnesses. Over the past two and a half years this committee, the majority has made many allegations against the Federal Clean Energy 

and Advanced Technology Vehicle Programs, but in the past two 

and a half years Congress has been a highly partisan place where 

facts can be sacrificed for political expediency. In fact, the ATVM 

program and its awardees have had, until recently, strong bipartisan support. 

When President Bush signed the bill which created the ATVM 

program into law, he said it should say to the American people that 

we can find common ground on critical issues. 

Mr. Fisker, you were encouraged to apply for the ATVM funding 

in 2008 by John Mizroch, an assistant secretary of energy under 

President Bush, is that correct? 

Mr. FISKER. That is correct. 

Mr. CUMMINGS. And what do you think Mr. Mizroch saw in your 

company? Did he tell you? 

Mr. FISKER. Yes. Well, we were discussing, back in 2008, of 

course, the fact that the American car industry generally was not 

doing very well, was in fact behind in new technology, and he explained that this loan was set up to get America back in the lead 

when it came to advanced technology, and specifically advanced 

technology that would contribute to not having to rely on the import of foreign oil and better emissions. So I explained that our 

technology was really meant for the consumer to drive the entire 

week without using one drop of gasoline, and only on long distances using gasoline, and that would dramatically reduce the fuel 

consumption. And eventually our customers have reported back to 

get more than 100 miles per gallon. In fact, there are customers 

driving up to three or four months before they fill up the car. So 

what we talked about at that time was exactly to achieve these 

goals, and he encouraged me and explained to me about the ATVM 

loan. 

Mr. CUMMINGS. So you didn’t go seeking out this loan. 

Mr. FISKER. No. 

Mr. CUMMINGS. They sought you. 

Mr. FISKER. That is correct. 

Mr. CUMMINGS. Oh, okay. Go ahead. 

Mr. FISKER. So later in 2008, we finally decided to apply for the 

loan after we had raised considerable amount of money. We had already started to develop the technology. We had hired experts, 

35 

really engineers that understood this and were starting to develop 

electric vehicles, and we had built up an engineering team. And we 

started then a nine month due diligence with Department of Energy, where they brought in consultants, engineering consultants, 

other consultants to look at our business plan market, etcetera, 

and after that we made our final application and got the final approval in April 2010. 

Mr. CUMMINGS. Thank you, Mr. Chairman. I see my time has 

run out. 

Mr. JORDAN. Mr. Whitcombe, approximately how many applicants were there to the ATVM program? 

Mr. WHITCOMBE. About 150. 

Mr. JORDAN. A hundred fifty. And how many got funded? 

Mr. WHITCOMBE. Five. 

Mr. JORDAN. Okay, look at this email. I just want you to look at 

the first line and the last time. The first line talks about Fisker 

was originally rejected by the Credit Review Board. The last line 

talks about their CCC+ credit rating. 

Of the five who received funding, in other words, the other four 

who received funding, how many of them were initially rejected by 

the Credit Review board? 

Mr. WHITCOMBE. I am sorry, this is the first time that I have 

seen this. 

Mr. JORDAN. No, it is a simple question. Do you know if the other 

four who got taxpayer dollars, were any of them initially rejected 

by the Credit Review Board? 

Mr. WHITCOMBE. I am trying to look at your document. Can you 

state your question again? 

Mr. CUMMINGS. Mr. Chairman, would you let him look at the 

document, out of fairness? 

Mr. JORDAN. Sure. But the question is do you know if any of the 

other four were initially rejected by the Credit Review Board, as 

Fisker was. 

Mr. WHITCOMBE. Sir, I do not know. I will have to take that 

question for the record. 

Mr. JORDAN. Do you know if any of the other four who received 

taxpayer money had a credit rating as bad or any of them have a 

worse credit rating than Fisker? 

Mr. WHITCOMBE. I can’t state for certain, but Ford, at that point 

in time, may have been similar to that level. 

Mr. JORDAN. Say again? 

Mr. WHITCOMBE. Ford, at the time, may have been similar to 

that level, but I am not certain. 

Mr. JORDAN. Your best guess. Did the other four have a higher 

credit rating than Fisker or lower? 

Mr. WHITCOMBE. I decline to guess on this, sir. 

Mr. JORDAN. But you were involved. You are the witness from 

the Department of Energy. There is only five companies, five credit 

ratings. Were they better than CCC+ or were they worse? 

Mr. WHITCOMBE. I was the acting director during 2012. 

Mr. JORDAN. But you are the witness the Department of Energy 

sent here. It is a simple question. Did the other four have a worse 

credit position than Fisker when they started or a better? 

36 

Mr. WHITCOMBE. I am going to have to take that question for the 

record. 

Mr. JORDAN. How many of the 150 other applicants who were denied funds, do you know if any of them had a better credit rating 

than CCC+? 

Mr. WHITCOMBE. Most had no credit rating, sir. 

Mr. JORDAN. But those that you know, did any of them have a 

better one? 

Mr. WHITCOMBE. No. 

Mr. JORDAN. Okay. 

Well, let’s go to slide 2, then. 

[Slide.] 

Mr. JORDAN. The key line here is the third line that says Fisker 

was also under-collateralized. Do you know if any of the four other 

companies who received taxpayer money, were they as poorly positioned relative to collateral as Fisker, or were they all better? 

Mr. WHITCOMBE. This is the first time I have seen this document. 

Mr. JORDAN. The document is just to show the statement. The 

question is real simple: Did the other four who got taxpayer money, 

did they have a better collateral position than Fisker or a worse 

position? 

Mr. WHITCOMBE. I can make no determination whether Fisker 

had a better or worse collateral position. 

Mr. JORDAN. You don’t know the collateral position for the other 

companies that got all that money that Mr. Cartwright put up 

there? You don’t know? 

Mr. WHITCOMBE. Fisker itself was a startup company, and any 

collateral that it would have would have been for intellectual property, machinery, or cash that they had on the balance sheet. 

Mr. JORDAN. Let’s go back to the first slide, then. 

[Slide.] 

Mr. JORDAN. I am looking at the middle of the box square. How 

many of the other four companies were given a loan on a second 

generation product when the first generation product wasn’t complete? Do you know of any of the other four who were given a similar kind of loan? 

Mr. WHITCOMBE. Ford was provided loans to retool their factories. 

Mr. JORDAN. Let’s back up a second. Ms. Cleghorn, she was the 

credit consultant at the Department of Energy used, correct? 

Mr. WHITCOMBE. She was an outside consultant for DOE. 

Mr. JORDAN. Right. She was used throughout this whole process 

to make some evaluations, give you information; you used that information to base your decisions. She is pointing out that Fisker is 

getting a loan on a second generation product when the first one 

isn’t even complete. All I am asking is did any of the other four 

companies who got taxpayer money, did they get the same kind of 

deal? 

Mr. WHITCOMBE. Several of the other companies were large 

O&Ms. 

Mr. JORDAN. Did Ms. Cleghorn raise any of these same objections, same kind of concerns about the other companies? 

37 

Mr. WHITCOMBE. I have no idea. Ms. Cleghorn is an advisor to 

the DOE. 

Mr. JORDAN. Mr. Whitcombe, here is what we are trying to figure 

out: Were these guys treated special? Mr. Cartwright made this big 

deal about how the other four didn’t lose money. They did. So I 

want to know did any of the other four have a credit rating as bad 

or worse than Fisker, or were they all better? Did any of the other 

four have such a poorly collateralized position as Fisker? Did any 

of the other four get a loan on a second generation product when 

they hadn’t even completed their first generation product? Pretty 

simple, straight forward questions to know how did Fisker get this 

loan if it didn’t apply to the other four. 

Mr. WHITCOMBE. We make the awards for each individual applicant based on the merits of the transaction, each different company, after extensive financial market—— 

Mr. JORDAN. Let me ask you this. What was the credit rating of 

Nissan when they applied, do you know? 

Mr. WHITCOMBE. I believe it was B plus, but I can’t—— 

Mr. JORDAN. So better than Fisker. What was the credit rating 

of Tesla when they applied? 

Mr. WHITCOMBE. I don’t believe Tesla had a credit rating at the 

time; it was funded purely by equity. 

Mr. JORDAN. What about Ford? 

Mr. WHITCOMBE. I believe it was in the CCC category. 

Mr. JORDAN. Okay, what about the Vehicle Production Group? 

Mr. WHITCOMBE. Unrated because they had no debt securities. 

Mr. JORDAN. All right. 

Let’s go to the fourth slide, if we could. 

[Slide.] 

Mr. JORDAN. I will give you a chance to look at this. Of the other 

four companies who received taxpayer money, were any of them allowed to miss milestones and breach covenants? 

Mr. WHITCOMBE. All our borrowers we evaluate on a continuing 

basis. Certain of the other large corporate borrowers, like Nissan 

or Ford, commonly, within their financial profile, may or may not 

have issues; Tesla itself, VPG itself. So comparing each one of these 

borrowers against each other is unfair because each company has 

its own different product, its own different financial condition. 

Mr. JORDAN. No, no, it is not unfair. 

Mr. WHITCOMBE. So it is comparing apples and oranges. 

Mr. JORDAN. Fisker is the one who has lost $200 million of taxpayer money. What I am trying to figure out is did the other four 

companies have any kind of similar position when they got taxpayer money. They haven’t lost it like Fisker has. That is what I 

want to know at the start. Why did Fisker get the loan if they 

weren’t somehow different than the other four? 

Mr. WHITCOMBE. Fisker was a startup company. We conducted 

due diligence on the company and we issued the loans based on the 

merits of the transaction. Fisker, as an applicant, has to pass an 

eligibility criteria test and has to provide substantial information. 

Mr. JORDAN. Okay, let me go to one last one. I know my time 

is up, but I want to go to one last. Let’s go to I think it is the third 

or fourth slide, it is the email from Mr. Koehler. 

[Slide.] 

38 

Mr. JORDAN. Okay, I will give you a chance to look at this and 

I will read the relevant part. This is from Mr. Koehler to the Department of Energy. This is August 10th, 2009, before they had 

been given any taxpayer money and before they had been approved. It says, I need a solution for a funding scenario with debt 

only starting Monday next week and an approval for the entire program within two weeks. I am sorry if I am very direct right now, 

but we don’t have much time. I have to lay off all of my Fisker 

Coachbuild employees on Monday and some of the Fisker Automotive people. This is hurting me a lot personally and is business 

related, and is giving our competition a huge advantage. 

So I have two questions. Did any of the other four applicants 

ever send you an email saying, hey, get on the stick and give us 

American taxpayer dollars, we need it now? Did you get any kind 

of emails from Ford or Nissan or Tesla that communicated in this 

fashion? 

Mr. WHITCOMBE. There are literally thousands of emails for each 

loan. 

Mr. JORDAN. Do you recall getting any emails that were this direct, saying, hey, we need the money now? 

Mr. WHITCOMBE. I have not been presented with any emails to 

that effect. 

Mr. JORDAN. Okay. Did any of the other four get approved for a 

loan when you had a senior officer at one of those companies admitting that they couldn’t meet payroll without help from the taxpayer? Do you recall any other emails that were from Ford, Nissan, 

Tesla that would say, you know what, we can’t meet payroll; we 

need American tax dollars and we need it now? 

Mr. WHITCOMBE. Sir, I would like to see who the author and recipient of this document is. 

Mr. JORDAN. From Mr. Koehler, who is sitting two people away 

from you, sent to Mr. Eckert at the Department of Energy. 

Mr. WHITCOMBE. So Mr. Eckert was an investment officer at the 

DOE at that point in time. 

Mr. JORDAN. I don’t care what he was. He was at the Department of Energy. I am asking you a question. Do people typically 

talk to folks who are trying to get taxpayer money from with this 

kind of language? 

Mr. WHITCOMBE. It does matter because he worked in the Loan 

Program Office, which provides the advice to the secretary about 

the viability of any loan. 

Mr. JORDAN. You have a company that admits in writing from 

the COO of that company saying we can’t meet payroll unless you 

give us American tax dollars, and you guys decided to give them 

to them. All I am asking is Tesla, Ford, or Nissan ever send you 

an email saying, you know what, we can’t meet payroll if you don’t 

give us some American tax dollars. Straight forward question. Do 

you recall any emails from those other companies who got money 

who would make this point? 

Mr. WHITCOMBE. I can’t recall of that fact. What I see here is Mr. 

Koehler sending an email to DOE and then a notification that the 

email has been forwarded on. That is all I see. 

Mr. JORDAN. All right, Mr. Whitcombe, I am out of time, but you 

have a company under-collateralized, CCC+ credit rating, admits 

39 

before they receive money they can’t meet payroll and they need 

taxpayer dollars, asks the American taxpayers to give them a loan 

on a second generation product that they haven’t produced, and yet 

they haven’t even finished the first generation product, and the 

American taxpayers are on the hook for $200 million. It makes no 

sense to me how the Department of Energy can actually approve 

this loan from the get-go: under-collateralized, CCC rating, second 

generation product yet unseen, first generation incomplete, and 

they can’t meet payroll before they ask for the loan, they say that 

is why we need the loan, and you guys gave it to them. And now 

we are surprised that the American taxpayers are out $200 million? We shouldn’t be surprised; all the evidence points to they 

should have never gotten the loan in the first place. 

Mr. Fisker, let me ask you one last question to finish up here. 

You said in your testimony there was no political influence. So here 

is what I can’t figure out. If you are an under-collateralized company, you can’t meet payroll, you are getting a loan on a second 

generation product no one has ever seen, you have a CCC+ credit 

rating, and yet you didn’t get the loan because of any political influence. It is amazing. How did you get the $200 million of taxpayer money? You must have really laid it on thick when you went 

in to talk to these guys. 

Mr. FISKER. Well, Chairman, first of all, we had shown the 

Karma at the time we started discussing with the DOE and beginning in 2008. I do not know exactly when this document is dated, 

but, as a startup company, there are always times when you are 

in difficult situations. But I don’t know what time this email is 

dated, so I couldn’t ask that specifically, but I do know we had no 

special treatments. 

Mr. JORDAN. I yield to the gentleman from Virginia. 

Mr. CONNOLLY. I would ask the chair for some indulgence and 

extra time. 

Mr. JORDAN. You can have as much time as you want. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

I guess somebody watching this hearing might be forgiven for 

perhaps misconstruing a hearing in a democratic body, representative body like Congress, presumably designed to get to the truth in 

an honest inquiry and something resembling a Soviet show trial in 

which the press has leaked information that is one-sided but predictably, of course, shows up; in which witnesses are badgered; in 

which accusations are thrown out, unproven; in which emails that 

may or may not have any validity are presented as God’s gospel 

truth and you have an obligation to respond to them even though 

you have never seen the document. We have had to take time out 

in this hearing for you to even have a chance to read accusatory 

documents or documents that are going to be used to make accusations. 

In my view, this is not how an honorable congressional inquiry 

ought to be conducted. And I also fear that in order to get maybe 

cheap political headlines at the expense of the President, I might 

add we spent two years doing that in this committee and it didn’t 

work. The American people were having none of it. This is an honorable President and his Administration has conducted itself honorably. Has it made mistakes? What administration hasn’t? We are 

40 

opening a library in Texas today for an administration that was 

rife with them on big things. 

The accusation was made that this was an administration that 

was stonewalling and the least transparent in history. We have 

had hearings in this committee concluding the opposite. As a matter of fact, when it comes to transparency, this Administration has 

a very good record, has made enormous progress any way you 

count it; records-keeping, archiving, posting things using the Internet and the Web, accounting for money. Does it make mistakes? Of 

course it does; Government is a big enterprise. 

Mr. Whitcombe, your title is investment officer. Does that mean 

that you make some kind of assessment as to the viability of investments? 

Mr. WHITCOMBE. Yes, it is supervisory senior investment officer. 

Mr. CONNOLLY. Now, I know it is not your responsibility, but if 

you think back in history, investments, innovative investments, did 

the Wright brothers make any mistakes in their research on 

manned flight? 

Mr. WHITCOMBE. I am sure they crashed a few times. 

Mr. CONNOLLY. So they had some failures, is that right? 

Mr. WHITCOMBE. I am sure they did. 

Mr. CONNOLLY. Henry Ford and kind of thinking through mass 

production, do you think he made any failures before he hit success? 

Mr. WHITCOMBE. Probably so, sir. 

Mr. CONNOLLY. Thomas Edison on the electric lightbulb. In fact, 

I seem to recall there was actually a fight about which bet to make 

and which current to use, is that not correct? 

Mr. WHITCOMBE. AC versus DC and Mr. Tesla. I understand. 

Mr. CONNOLLY. Federal investments. My friends on the other 

side might say, well, some of these are private investments. All 

right, Federal investments. The Internet, what is now known as 

the Internet, started out as Darpanet. Is that your recollection too, 

Mr. Whitcombe? 

Mr. WHITCOMBE. Sometime in the 1980s, yes. 

Mr. CONNOLLY. Do think there was some trial and error and perhaps some mistakes, failures, even, before we hit success on how 

to get it just right? 

Mr. WHITCOMBE. Probably so, sir. 

Mr. CONNOLLY. GPS technology, also a Federal investment. Paid 

off for us, but could there have been some trial and error that also 

included some failures before we actually got success with the technology? 

Mr. WHITCOMBE. Probably so, and it is pretty cheap now. 

Mr. CONNOLLY. Nuclear technology, also entirely a Federal investment initially. Any mistakes there, failures, successes, in the 

private sector as well as the public sector? 

Mr. WHITCOMBE. Some dangerous. 

Mr. CONNOLLY. Some come to mind. 

Mr. WHITCOMBE. Yes, sir. 

Mr. CONNOLLY. Now, we don’t want any mistakes. We don’t want 

any failures. On behalf of the taxpayer, we want to get it 100 percent right 100 percent of the time. But that is not how the real 

world works. And if we go too far for the sake of political points 

41 

down this road, we will have a chilling effect on the ability of 

America to innovate, on the willingness of Government and the private sector to make investments that risk failure every time they 

make them, whether it be in the pharmaceutical realm or the energy realm or the automotive realm. Doesn’t mean we shouldn’t get 

to the bottom of a failure to better understand it. But to simply 

highlight it for the purpose of political exploitation has negative 

consequences I know my colleagues do not intend, but they are 

there nonetheless, and that is my concern with this kind of hearing, besides the issue of fair play. 

With that, I yield back. 

Mr. JORDAN. Mr. Whitcombe, do you know if Mr. Ford, Orville 

or Wilbur Wright, or Mr. Edison lost any taxpayer money when 

they were inventing the wonderful products that they invented? 

Mr. WHITCOMBE. I am not certain of Mr. Ford’s history or the 

Wright brothers. 

Mr. JORDAN. Mr. Fisker, are you aware that the Wright brothers 

or Mr. Edison lost millions of dollars of taxpayer money? 

Mr. FISKER. I am not aware. 

Mr. JORDAN. Mr. Koehler, do you know if those guys lost any taxpayer money? 

Mr. KOEHLER. No, I am not aware of it. 

Mr. JORDAN. Okay. When my colleague from Virginia talks about 

cheap political headlines, I will point to the tape we showed at the 

start of the hearing. Vice President Biden said billions and billions 

of dollars worth of jobs will be created. You want to talk about political headlines? The folks who are pushing this program. We are 

just here because $200 million of taxpayer money was lost. 

Now, the one thing he got right, Kleiner Perkins is a major investor in the Fisker company. Al Gore is a partner at Fisker. So 

Al Gore not only invented the Internet, he was involved in Fisker. 

So he got that part right. Everything else made no sense. We are 

talking about the loss of $200 million in taxpayer money. 

The gentleman from North Carolina is recognized. 

Mr. MCHENRY. Thank you, Mr. Chairman. 

Thank you all for testifying. I want to begin, if we can put 15C 

up as a slide. 

[Slide.] 

Mr. MCHENRY. Mr. Whitcombe, you can review that while I have 

a question for Mr. Koehler. 

This is an internal Department of Energy slide reviewed before 

the credit committee. Mr. Koehler, the slide is not important to this 

question. Now, in January of 2012, were you familiar with the plan 

that would stop the production of the Nina and repay $23 million 

back to the Government and pursue a sale? 

Mr. KOEHLER. No, not to my recollection. 

Mr. MCHENRY. Oh. Well, then you should read this document. 

According to Fisker and Kleiner Perkins, actually, Mr. Fisker, if 

I could ask you, do you recall proposing a sale of Fisker and repaying the loan back to Department of Energy? 

Mr. FISKER. Excuse me. When is this document from? 

Mr. MCHENRY. Just listen to my question. Are you familiar with 

a plan from January of 2012 by which you would forego the Nina, 

the production of your automobile here in the United States, and 

42 

repay $23 million already advanced from the Government back to 

the Government? 

Mr. FISKER. I do not recall ever seeing that document. 

Mr. MCHENRY. No, I am asking you a question. I said forget the 

document. 

Take the document down, please. 

These documents seem to perplex this panel, which that is a 

whole different subject for preparations for this question. 

Did you offer the Government to repay the loan and forego the 

production of your automobile? 

Mr. FISKER. Congressman, I was not involved in those discussions. I am not aware. 

Mr. MCHENRY. So you are familiar with the discussions? 

Mr. FISKER. No, that is what I am saying. I was not involved in 

such discussions. 

Mr. MCHENRY. So you never offered to repay $23 million back to 

the Government? 

Mr. FISKER. I was not involved in any such discussions. 

Mr. MCHENRY. Okay. 

Mr. FISKER. If there were any. 

Mr. MCHENRY. Do you know of any discussions to repay the Government and pursue a sale of your company? 

Mr. FISKER. Not in the way you mention. 

Mr. MCHENRY. Okay, then in what way? 

Mr. FISKER. No, I know of ongoing discussions about investors 

and different opportunities. 

Mr. MCHENRY. So tell me about those opportunities. 

Mr. FISKER. Well, we have always been raising money, but I 

don’t think it is appropriate to sit here and talk about the private 

financial institutions we are working with as a private fund. 

Mr. MCHENRY. So how much taxpayer dollars have you lost, 

American taxpayer money have you lost? 

Mr. FISKER. I am assuming you are talking about Fisker Automotive. At this point in time, I do not believe that any taxpayer 

dollars have been lost. 

Mr. MCHENRY. None. Okay. So you plan to repay the loans and 

the money you have already received from the taxpayer. 

Mr. FISKER. Congressman, I am no longer with the company, so 

I am not familiar with that. 

Mr. MCHENRY. Oh, fantastic. So let me ask you, Mr. Koehler, 

since Mr. Fisker said we haven’t lost any money with the company 

that bears his name. Does Fisker plan to repay the Government? 

Mr. KOEHLER. Well, right now, as we speak here, we have our 

management team and I am working on potential solutions. 

Mr. MCHENRY. Okay, is one of those solutions pursuing a sale? 

Mr. KOEHLER. Strategic investment, new capital from investors, 

and then to continue to repay the Department of Energy loan. 

Mr. MCHENRY. Okay. In January of 2012, were there discussions 

about getting added investment or pursuing a sale? 

Mr. KOEHLER. We talk about additional capital all the time, but 

I am not aware of a sale. 

Mr. MCHENRY. Okay. Well, what we have here is a Department 

of Energy Loan Program Office document that actually went before 

the Credit Committee. 

43 

Mr. Whitcombe, have you seen this slide before? 

Mr. WHITCOMBE. I have not seen this document. I have not had 

a chance to review it. 

Mr. MCHENRY. Okay. This was before the Credit Committee and 

they discussed forgoing the Nina. DOE refused to resume advances 

until September time frame. Fisker and Kleiner Perkins said they 

would forego the Nina, repay the $20 million already advanced for 

Nina, and pursue sale or move company to China or Russia, either 

of which would require first repaying the DOE loan. 

Mr. Fisker, are you familiar with anything that this slide has 

outlined for your company? 

Mr. FISKER. Congressman, no. 

Mr. MCHENRY. Okay. Were you with the company in January of 

2012? 

Mr. FISKER. Yes. 

Mr. MCHENRY. Okay. And what was your role then? 

Mr. FISKER. I was executive chairman. 

Mr. MCHENRY. Okay. So perhaps if you are pursuing a sale of 

your company, proposed it, or had the idea to, to a major creditor, 

you might be involved with it. 

Mr. FISKER. I probably would, but I did not see this document. 

Mr. MCHENRY. Okay. 

Mr. Koehler? 

Mr. KOEHLER. No, I haven’t seen that and I haven’t heard this. 

Mr. MCHENRY. You have not heard of this scenario? 

Mr. KOEHLER. No. 

Mr. MCHENRY. Okay. Then we are going to move to another one, 

because this is fascinating because they were contemplating. Don’t 

worry, they rejected it. They rejected what they thought was an 

offer of $23 million to repay back the taxpayer. 

So let’s go to the next slide. 

[Slide.] 

Mr. MCHENRY. An update on 5/1/12, so May 1st. The Risk Committee voted to decline Fisker’s offer to prepay approximately half 

their outstanding loan amount and offer DOE a commercial highyield note for the balance. 

Mr. Fisker, were you with the company on May of 2012? 

Mr. FISKER. May of 2012? Yes. 

Mr. MCHENRY. Are you familiar with an offer to repay approximately half the outstanding loan amount to the Department of Energy? 

Mr. FISKER. Congressman, there were several negotiations going 

on, usually led by the CFO in the company, and I was not part of 

most of these negotiations. 

Mr. MCHENRY. But you are familiar with an offer to repay the 

loan? 

Mr. FISKER. Not this offer. I do not recall that. 

Mr. MCHENRY. What offer are you familiar with? 

Mr. FISKER. Not an offer, no. 

Mr. MCHENRY. Okay, you are not familiar with much, it sounds 

like, and that is fantastic. We understand your willingness to not 

provide this information. 

Mr. Koehler, are you familiar with that offer? You are a chief operating officer of the company. Are you familiar with an offer to 

44 

repay what appears to be about $93 million back to the Department of Energy? 

Mr. KOEHLER. At the time I was chief business development officer, not chief operating officer any more, but I was not involved in 

these discussions, so I haven’t heard any of it. 

Mr. MCHENRY. None of it? 

Mr. KOEHLER. No. 

Mr. MCHENRY. Oh. Well, Mr. Whitcombe, we will go to you. We 

will see if you can enlighten us on any of this. 

Mr. WHITCOMBE. Your question, sir? 

Mr. MCHENRY. Sure. Are you familiar with either of these things 

I have asked your other panelists? 

Mr. WHITCOMBE. I haven’t seen this document before. 

Mr. MCHENRY. Okay, I am not asking if you saw the document. 

I am asking you are you familiar with an offer to repay the Government by Fisker. 

Mr. WHITCOMBE. I am not familiar of an offer by Fisker. As I understand, there were multiple discussions going on with respect to 

raising high-yield capital for dollar amounts that I don’t know, of 

which would possibly be used to repay some loan amounts or to redeploy to the business. 

Mr. MCHENRY. So at any time did the Department of Energy reject a repayment from Fisker? 

Mr. WHITCOMBE. As I am aware, we made no rejection directly 

to Fisker for not repaying the loan. 

Mr. MCHENRY. Okay. Well, we will provide you with the documents, Mr. Whitcombe. I will have extensive questions and I would 

expect that you would endeavor to answer. It is an inordinately 

frustrating when your delaying of these questions based on just 

trying to slow-play the answers. That is extraordinarily frustrating. 

But in written form we will provide you all these documents that 

I have referenced here today, and I would hope that you would 

have a better response than you have been able to provide this 

committee on this important issue of taxpayers losing money. 

The real issue here, Mr. Chairman, is that the Government 

shouldn’t be in this business of actually trying to be a venture capitalist. The Government is a very poor venture capitalist. And what 

I mean by that is we lose taxpayer dollars. And when we lose taxpayer dollars, it outrages the public that has to pay for salaries of 

Government workers, some that do a fantastic job. But when you 

are a senior secured lender, as you have testified, Mr. Whitcombe, 

you should actually have collateral. I have extensive slides from 

that. I am sure you will have no comment on it. 

So, Mr. Chairman, I will be happy to yield back. 

Mr. JORDAN. I appreciate the gentleman’s questions, a great line 

of questioning. Here is what I don’t get: someone is not being 

square with us. I mean, it was part of a presentation in front of 

the Risk Committee at Department of Energy, on Department of 

Energy letterhead, about a proposal to sell Fisker and recoup taxpayer money, and Mr. Whitcombe says he doesn’t know anything 

about it and Mr. Fisker and Mr. Koehler, who run the company, 

don’t know anything about the offer. So what gives? Was it made 

up, Mr. Whitcombe? Did someone just decide to put that together 

on a piece of Department of Energy stationery? What is the deal? 

45 

Mr. WHITCOMBE. I can’t make any presumptions of what the 

Credit Risk Committee did. 

Mr. JORDAN. Was there an offer or not? These are the guys who 

run the company who are saying we don’t know anything about an 

offer to sell the company and recoup taxpayer dollars. But it is 

right there in front of us. 

Mr. WHITCOMBE. I will have to take that for the record, sir, and 

get back to you on whether we received a formal offer from the 

company. 

Mr. JORDAN. Mr. Fisker, you don’t know anything about it? It is 

your company. No wonder you guys are in trouble if you don’t know 

about a proposal to sell the company. 

Mr. FISKER. Chairman, I was sitting on the board at that time 

and I know that there were ongoing discussions. 

Mr. JORDAN. The company is Fisker. Your name is Fisker. You 

are chairman of the board and you don’t know about a deal to sell 

the company to recoup taxpayer dollars? 

Mr. FISKER. I know that there were ongoing discussions with the 

Department of Energy. 

Mr. JORDAN. The question was real simple from Mr. McHenry 

about the deal. You don’t know anything? You said, I don’t know. 

Mr. FISKER. I have not seen that particular paper. 

Mr. JORDAN. So let me ask you this. Kleiner Perkins, were they 

representing you, proposing deals that you didn’t know about? 

Mr. FISKER. I don’t know. 

Mr. JORDAN. Yes or no? 

Mr. FISKER. I don’t know. 

Mr. JORDAN. Do you think it might have happened? 

Mr. FISKER. I can’t answer that. 

Mr. JORDAN. Mr. Whitcombe, did that proposal come from 

Kleiner Perkins and not from Fisker? 

Mr. WHITCOMBE. We dealt with Fisker as the borrower directly. 

Kleiner Perkins was an equity investor in the company, but our 

loan was with Fisker, and that is who we had all discussions with, 

with Fisker senior executives and the board of directors. 

Mr. JORDAN. All we want to know is if the offer was made. You 

can’t tell if it was made; the head of the company can’t tell if it 

was made. That is unbelievable. Unbelievable. 

All right, I am going to recognize the other gentleman from 

North Carolina. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

And thank you for your testimony here. 

Mr. Fisker, if we could look at this slide they will be putting up, 

slide 13A, which is from the Department of Energy in October of 

2011, it states that in April 2010 you expected to sell 14,000 Karmas in 2011. In reality, though, we know that production for the 

Karma did not start until September of that year. And as of this 

presentation, which is actually a presentation in October of 2011, 

it was estimated that you would sell 542 Karmas by the end of the 

year. So we go from 14,000 to 542 Karmas. Did you actually sell 

542 Karmas in 2011? 

Mr. FISKER. Congressman, let me clarify. In a ramp up in production, the production numbers are very low in the first several 

months. Then as the production moves to the end of the year, obviVerDate Aug 31 2005 14:29 May 29, 2013 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 C:\DOCS\80920.TXT APRIL
46 

ously we were looking at a very low production ramp, and I believe 

we sold about 280, between 250 to 300 cars by the end of 2011. 

Mr. MEADOWS. So you went from 14,000 in the first part of the 

year, you ramped up and revised the estimate to 542, but then 

within a three-month time period you couldn’t actually project how 

many cars you were going to do, and you ended up at half the number you projected in the fall of 2011, is that correct? 

Mr. FISKER. Well, congressman, as our production was delayed, 

it was very hard to estimate before we had the final certification 

and everything was done, so it was literally week by week. Even 

if you miss a week, you miss, obviously, production. 

Mr. MEADOWS. All right, so let’s say we miss that. 

Let’s go on to the next slide. 

[Slide.] 

Mr. MEADOWS. Can you look at this slide, which is slide number 

15? This is from the Department of Energy’s review of the loan application from 2009, and it stated that you would sell over 7,000 

Karmas in 2010, 15,000 between 2010 and 2013; you would come 

up with some 60,000 Atlantic, the new version, by that 2011 time 

frame; and another 60,000 by 2012. My question is how in the 

world did you convince anybody that you could do this kind of production, when you didn’t even produce 1 percent of that? 

Mr. FISKER. Congressman, could I have a copy of that? 

Mr. MEADOWS. Sure. We will be glad to provide that for you. But 

we had unbelievable estimates of over 120,000 vehicles. I would say 

that we misnamed the car. It shouldn’t be the Karma, it should be 

the Karnac. And that is how we come up with these numbers. 

Mr. FISKER. Congressman, as I look at these numbers from far 

away, I would like to just double-check the document. 

Mr. MEADOWS. I mean, this was part of the review process for 

the loan that we were going through with Mr. Whitcombe and his 

agency. So you were coming up with all these numbers based on 

what? 

Mr. FISKER. Congressman, this is not numbers from the final 

business plan submitted to the DOE. This is not the correct document. 

Mr. MEADOWS. Okay. Well, how many did you estimate? Because 

we have a number of documents we will be glad to provide, and 

maybe these are some that you can answer directly. How many did 

you estimate that you would build? 

Mr. FISKER. So when we were working on due diligence in 2009 

for the Department of Energy loan and for the business plan, we 

invited all our dealers in the U.S., our importers worldwide to help 

us confirm the numbers. We also had, through the DOE due diligence, A.T. Kearney come out and verify our projected sales numbers, and everybody were verifying the numbers that we submitted 

to DOE in the final form. 

Mr. MEADOWS. So you are saying these are incorrect. What are 

the correct numbers? How many did you estimate that you would 

build, of the new car that was supposed to be built in the United 

States, not the one in Finland? 

Mr. FISKER. These ones here are incorrect. I don’t have the final 

numbers in my head of all the different years, but this is incorrect. 

47 

Mr. MEADOWS. I would assume that you lived, breathed, and ate 

automobile for a long period of time, so you know what the expectation was. How many, just very simply? We will let you be plus or 

minus 1,000. What was the number? 

Mr. FISKER. So when we submitted the final plan and we had already worked on the vehicle for two years and invited dealers out, 

as I said, and built up our dealer network, we projected the initial 

Karma volume I believe about 11,000 for the first year. 

Mr. MEADOWS. Okay. So you didn’t do anywhere close to 11,000 

the first year. Was it 200? What was your testimony? 

Mr. FISKER. Well, as I said before, there was a ramp up, so you 

cannot really count that as a first year. 

Mr. MEADOWS. Okay, well, to date how many have you produced, 

2,000? 

Mr. FISKER. Well, as I mentioned in my statement, we came into 

several unfortunate events that hit us like a domino effect. 

Mr. MEADOWS. So you are saying that you didn’t produce enough 

cars because of Hurricane Sandy? Is that your testimony today? 

Mr. FISKER. My testimony is that we hit several unfortunate 

events such as the bankruptcy of our battery supplier, such as recalls from a faulty battery; and obviously that had a very strong 

impact on consumer confidence. It takes one day to take down consumer confidence, but several months to build it back up. 

Mr. MEADOWS. So your failure is not based on any negligence or 

lack of due diligence on your part, it is all these external factors, 

is that correct? 

Mr. FISKER. We did, as I said, a lot of due diligence back in 2009; 

not only us internally, but with our recognized dealer body here in 

the U.S., as well as international importers, A.T. Kearney, which 

is a recognized marketing firm. 

Mr. MEADOWS. All right, so when you got approved for the loan, 

from this taxpayer funded loan, how many cars had you built at 

that particular time? 

Mr. FISKER. When we got the initial approval, the Karma was 

still under development. 

Mr. MEADOWS. So you had zero cars that had been produced 

when you got the loan. 

Mr. FISKER. The car was still in development. 

Mr. MEADOWS. So that is zero, is that correct? 

Mr. FISKER. Yes, sir. 

Mr. MEADOWS. Yes or no? 

Mr. FISKER. That is correct. 

Mr. MEADOWS. Okay. All right, so let’s go a little bit further. 

Slide 17. This is from March 3rd of 2010. It is an email where 

it talks about that Fisker was originally rejected by the CRB since 

the manufacturing was to be outsourced to Finland, okay? So no 

U.S. jobs. The deal was amended to pull in the next stage of Fisker 

cars, that never got built, by the way, to be manufactured in the 

United States. Since Fisker had yet to build the first generation 

model, I thought it was very risky to lend against a second generation, which I would agree with, but that was what was required to 

‘‘meet the policy requirement.’’ 

48 

Mr. CARTWRIGHT. Mr. Chairman, I have a point of order. I think 

in fairness to the witnesses they should have these documents in 

front of them, instead of having to try to squint and read them off. 

Mr. MEADOWS. We will be glad to do that, Mr. Chairman. 

Can I get them copies, please? 

Mr. JORDAN. The staff will take documents to them. 

Mr. MEADOWS. All right, but meeting the policy requirement. So 

that policy requirement, I guess, would be that we would want to 

create American jobs. Is that correct? Is that the policy we are talking about? 

Mr. FISKER. We had, in fact, up to 600 jobs at Fisker Automotive 

at one point in time here in the U.S., and every money we spent 

from the Department of Energy loan was spent here in the U.S.; 

no money went to Finland whatsoever. 

Mr. MEADOWS. All right, so out of all the money that we spent, 

you spent it all here in the United States. But that allowed you to 

take private equity and spend on the production of the cars in Finland, is that correct? 

Mr. FISKER. The money that was spent in the U.S. was basically 

receipts that were given to the DOE to make sure that this money 

was spent here, that the money was already spent in the U.S., and 

we then got compensated from the DOE on that particular amount 

that was spent here in the U.S. developing advanced technology 

and creating jobs here in the U.S. 

Mr. MEADOWS. All right, so as we start to look at this, let me 

go a little bit further. Based on this email, can you explain this to 

me? It appears that they made the loan based on faith, not on any 

real due diligence, because their comment is that it is very risky 

to loan on a second generation car when the first generation car, 

as your testimony just admitted, had never been produced. So we 

have no cars and yet we are loaning on a second, better improved 

car. 

Mr. FISKER. Well, first of all, I can’t speak on behalf of the DOE. 

Mr. MEADOWS. Would you have made the same kind of loan? 

Mr. FISKER. Well, yes, at that time I would say that we had a 

very good development process already, we had already gotten very 

far with development on the powertrain. We had already spent two 

years developing the powertrain and the car by the time we got the 

Department of Energy loan. In fact, we had already started the second generation car before we were awarded the Department of Energy loan in April. 

Mr. MEADOWS. But according to some of the documents I have 

read, there is only 60 percent of that that actually translated over 

to that second generation car. So the work you do on the first generation, there is only 60 percent that would translate over. 

Mr. FISKER. Well, the important part that would translate over 

was the powertrain, the technology is very important. It was second generation technology that was lower cost, higher volume. That 

is really the important part in this whole process. To start out with 

a technology that is expensive, just like when the flat screen TV 

was $20,000; today it is $500. That, I think, is a recognized model. 

In any new technology you start out with expensive. 

Mr. MEADOWS. But most of the time we were already producing 

TVs when we do that. 

49 

I can see I am out of time. I have several other questions that 

I will submit for the record. What happens is we started here with 

Vice President Biden. He was talking about billions and billions 

and billions of jobs; he says we are going to write a new chapter. 

Then he came back to say, again, we are going to rewrite a new 

chapter. And I think he is probably right, but the chapter is chapter 7, it is not a new chapter in automobile history. 

I yield back. 

Mr. JORDAN. We will have a second round. 

Mr. ISSA. Mr. Chairman? 

Mr. JORDAN. The gentleman of the full committee is recognized. 

Mr. ISSA. I appreciate that. I will use the time but, actually, I 

was asking unanimous consent that the documents referred at this 

time be placed into the record and also distributed to both sides of 

the dais and to our witnesses. And I have asked them to do that, 

if there is no objection. 

Mr. JORDAN. Without objection. 

I would point out the documents are coming up on the screen 

right in front of Mr. Whitcombe; it is not like they can’t see them. 

But we will do that as well, and I think it is a great idea. 

Mr. ISSA. Thank you. 

Mr. JORDAN. So ordered. 

The gentleman from Georgia, then we will move to a second 

round. 

Mr. COLLINS. Thank you, Mr. Chairman. 

As we have discussed chapters, as we have discussed grand visions and plans, this is just, again, more and more amazing as I 

sit and I look at the discussions that are going on not just here 

today and the money that is lost here, or, as you have testified, 

which amazingly so has not been lost, undoubtedly is going to be 

repaid. Is there a time frame that you believe that the Fisker company is going to be paying this loan back? 

Mr. FISKER. Congressman, I am no longer with the company, so 

I can’t speak for the company. 

Mr. COLLINS. But when you were, were there any plans to be 

paying it back? 

Mr. FISKER. Yes. 

Mr. COLLINS. You made a statement that the American taxpayer 

had not lost any money. 

Mr. FISKER. At the time I was with the company, the plan was 

to follow the Department of Energy payment plan. 

Mr. COLLINS. Okay. And there was a plan in place to actually 

pay that money back? 

Mr. FISKER. The official plan, correct. 

Mr. COLLINS. And considering where the company is right now, 

is that a viable plan? 

Mr. FISKER. I cannot speak to that. 

Mr. COLLINS. Was it when you left? 

Mr. FISKER. I believe that the company has developed a tremendous value and I believe that the company, if it does get investors 

into the company, has the possibility of a path forward. 

Mr. COLLINS. And then if we hope real hard and squint real 

hard, this might actually happen. Is that what the company is sort 

of basing it on? Because right now it shows no ability to do that. 

50 

Mr. FISKER. Like I said, I can’t answer for the company’s current 

financial. 

Mr. COLLINS. Okay, we will give you a break for a second. 

Mr. Whitcombe, in documents, again, obtained, and to save us 

some time here, if you need to see these, we will put them up. Instead of having to say that they are not up, I am going to read part 

of it. It appears that the Department of Energy tightened the 

standards on these loans after the loans were given to Fisker. In 

fact, there was a number of companies in the cue, if you would, 

startup electric car companies who were in the pipeline that expressed frustration at not meeting swift approval. 

On March 2nd, 2010, which this will be number 20 on the slide, 

and all I am going to focus on, and I will read it for you, it says, 

As I mentioned to Jason earlier in an email, the credit standards 

have indeed become a bit more stringent since Tesla and Fisker 

deals went through. So I just want to be sure we have all our 

issues nicely boxed before we head to the committee. 

So you can take that down. 

At this point in time, the question I have is, Mr. Whitcombe, it 

appears from this email between Ms. Cleghorn and Sandy here, 

and these that are listed, it appears that the credit standards afterwards were made more stringent at the Department of Energy. I 

have a question about that because you made the statement in 

your opening that you do more than even private enterprise looking 

at this. My question is how did the credit process get more stringent? Did the Department of Energy decide to stop giving loans to 

companies with CCC+ junk status credit? 

Mr. WHITCOMBE. Give me a moment, I will finish up reading this 

question here. This is the first time I have seen this document 

here, and I understand in this series of time, March 2nd, 2010, 

they were looking at a particular credit, not Fisker. 

Mr. COLLINS. Okay, let me just stop right here, then. I am going 

to help out. And I understand. I will give you just a second as you 

are reading. Let’s just go yes, no. Would it be safe to say that after 

the Fisker deal that the credit standards were made more stringent, yes or no? 

Mr. WHITCOMBE. Each application has its own—— 

Mr. COLLINS. Yes or no? Because I am not asking about other applications. 

Mr. WHITCOMBE. This email from an outside consultant implies 

that credit standards were made more stringent after Fisker. 

Mr. COLLINS. Right. Because there were others in the pipeline 

wanting to know why the process was not moving along. If it was 

made more stringent, which it appears it was being made more 

stringent with the company that was dealing with this all the time, 

what was made more stringent? 

Mr. WHITCOMBE. Any number of factors could have been made 

more stringent, which could be the product; the product market; 

the source of capital; the particular product line; the market to 

which they would sell, whether it is a $30,000 car or a $100,000 

car; concentration of risk. It could be any number of factors. 

Mr. COLLINS. So maybe this discussion of how well it is vetted, 

and these companies were vetted before Fisker, was not as well 

vetted as we were led to believe, since now, after this loan was 

51 

made, we needed to tighten this up and it wasn’t as strong as being 

portrayed here. 

Mr. WHITCOMBE. I don’t believe the quality was any less earlier 

on, sir. 

Mr. COLLINS. So it was just an interesting thing that after Fisker 

these became a different standard? 

Mr. WHITCOMBE. I don’t believe the quality of the credit analysis 

was any less, sir. There is a high quality of credit professionals 

working in the DOE who are dedicated employees, along with the 

credit advisors they have. If you notice Grant Thornton on here 

with Fisker. Also we had Booz Allen Hamilton, A.T. Kearney. We 

had, as a legal advisor, Debra Wasson Clinton. We had a great 

team in place. 

Mr. COLLINS. And at this point I believe there is also a policy 

issue that we are looking at here. And after it became evident that 

we had these billions and billions coming through anyway, we will 

just leave that for its own statement, they decided, well, maybe we 

shouldn’t be letting these loans go to junk status companies on a 

CCC+ rating. 

Mr. WHITCOMBE. There was a large credit subsidy set aside to account for innovative manufacturing companies. 

Mr. COLLINS. Read that in your letter. Basically you are new, we 

are going to lose money. 

Mr. WHITCOMBE. In this case, sir, Fisker is a startup company. 

We had many startup companies within the portfolio of applications. 

Mr. COLLINS. Moving right along. 

Slide 19. 

[Slide.] 

Mr. COLLINS. This is interesting, and we are going to continue 

this line, Mr. Whitcombe. This email specifically states that Fisker 

made the loans more difficult only a few months after the DOE 

started giving money to Fisker, and it says this, and there was a 

statement from the email that said this is incredibly important, 

and especially with AT&B, as they have not been through the approval process since Fisker and have no real sense of how much 

tougher things are. That is a definitive statement in there saying 

that things are harder, that there is something else in there that 

is making it more difficult. Again, I want to go back to this. What 

was it specifically about the Fisker loan that required making the 

application process more difficult? This is sort of a follow-on of the 

previous question. 

Mr. WHITCOMBE. Sir, lending to a high-tech company in the automotive industry is—— 

Mr. COLLINS. So we have no clue? 

Mr. WHITCOMBE. Excuse me? 

Mr. COLLINS. So we just don’t know? It is just being perceived 

as harder? 

Mr. WHITCOMBE. I wouldn’t say we know. Look at the title of the 

program: Advanced Technology Vehicle Manufacturing Program. 

Each one of those words implies it is very difficult in this sector 

to lend. It is on an ongoing basis. The people who worked on this 

program, including these two people, who are consultants. 

52 

Mr. COLLINS. But, sir, with respect, that is not my question. That 

is not my question. My question is what was made tougher. Or 

what was the perceived difference after Fisker? It is not how you 

do it, and it is not the quality of people doing it, and it is not questioning the character of them wanting to come to work and do a 

good job. The question specifically is if the perception is it is harder, what made it harder? 

Mr. WHITCOMBE. As I am aware, at the time, the ATVM credit 

guidebook, which was for the group, had not changed. There is no 

specific evidence that I can imply that credit standards had gotten 

tighter. 

Mr. COLLINS. So this was an unwarranted assessment? This 

email is an unwarranted assessment? 

Mr. WHITCOMBE. This email is from Jim Cray, a third-party consultant, to Sandy Cleghorn’s Hotmail address. 

Mr. COLLINS. Would you not say that they have dealings with 

your loan program? 

Mr. WHITCOMBE. They are advisors. 

Mr. COLLINS. Are they familiar with the loan program? 

Mr. WHITCOMBE. They are advisors and they are familiar with 

the loan program. 

Mr. COLLINS. And they have watched how it goes by and their 

perception is, who deal with this regularly, that it became tougher 

after Fisker and, in fact, actually seemed to end after Fisker, because none were ever sent forward since then. Would that not be 

a fair assessment of what is being said here? 

Mr. WHITCOMBE. This is their opinion, a third-party’s opinion in 

an email together with each other. As you know, we make our advisements to the Secretary based on the merits of the transaction, 

based on the information that we have at the time. 

Mr. COLLINS. Yes or no, do you feel this is a fair assessment? Do 

you feel it is a fair assessment that the standards were made 

tougher after the Fisker sale, yes or no? Not how they did it, but 

is that the perception being said here in this email? 

Mr. WHITCOMBE. I can’t answer that question, but I will tell you 

I have been lending for 21 years and I have a very high sense of 

the credit conservatism. Loans in this sector involve significant 

amounts of capital. The capital-intensive projects up-front costs, it 

is very difficult to analyze this, and the credit professionals at the 

time did their very best to understand all the risks, described those 

risks, structured a loan, and advised the secretary accordingly. 

Mr. COLLINS. I appreciate that, because, again, I am going to reask the question I just asked after I ask this question. Will you answer my question, yes or no? 

Mr. WHITCOMBE. Yes, sir. 

Mr. COLLINS. Okay. Is it a fair perception that the standards got 

tougher after Fisker, yes or no? 

Mr. Chairman, I yield back. This is getting us nowhere. 

Mr. JORDAN. Appreciate this. It just confirms why we need to 

have more hearings and have someone from the Department who 

is will in fact answer the questions. 

Let me do this. Mr. Fisker, Mr. Koehler, let’s assume you guys 

are smart business people. Would you invest your money, your capital in a company with a CCC rating; a company that would be 

53 

under-collateralized, collateralized to half the value of the loan; a 

company that couldn’t meet payroll, as evidenced by what Mr. 

Koehler sent. 

You have a different company, but the company that sends an 

email similar to what Mr. Koehler sent to the Department of Energy. Would you put your own private money in a company with 

those characteristics, CCC credit rating, under-collateralized to half 

the value of the loan, couldn’t meet payroll; give me the money, 

look the other way, give me the money, I need to meet payroll? 

Would you give your private money to a company like that? 

Mr. FISKER. Mr. Chairman? 

Mr. JORDAN. Not Fisker. Let’s just say some company has that 

characteristic out there. Would you give your money to a company 

like that? 

Mr. JORDAN. Mr. Chairman, I put my last money in this company during such a time, in 2009. 

Mr. JORDAN. Mr. Koehler? 

Mr. KOEHLER. My answer is when you look at the Department 

of Energy—— 

Mr. JORDAN. No, the question is would you put your own money, 

not taxpayer money, would you put your money at risk. 

Mr. KOEHLER. The risk was greatly minimized with additional 

private equity we had to bring in from the outside. 

Mr. JORDAN. Well, to me, that explains why you guys lost $200 

million of taxpayers’ money. If you put your money in a company 

with those characteristics, that makes no sense to me at all. 

Let’s go to this. Mr. Fisker, is Kleiner Perkins a major investor 

in Fisker company? 

Mr. FISKER. I prefer not to discuss individual investors. 

Mr. JORDAN. Mr. Fisker, let me tell you something. Here is the 

way it works: you take taxpayer money, you are supposed to answer the questions. That is why we called you here. You can’t just 

say, oh, I don’t want to answer the questions, I don’t know about 

any loan. You took $200 million of taxpayer money. I would prefer 

not to have to ask these questions to any private company but you 

know what, you signed up for the deal. When you take taxpayer 

money and you lose $200 million, that is the risk you take. That 

is why you are in front of this committee having to answer questions. So the question is was Kleiner Perkins an investor in your 

company. 

Mr. FISKER. Mr. Chairman, I think, first of all, as a private company, we like to treat our investors privately as they make these 

investments. 

Mr. JORDAN. You forego that when you sign up and take the 

deal, Mr. Fisker. Were they an investor in your company? 

Mr. FISKER. Well, as I said before, I prefer not to talk about individual investors. 

Mr. JORDAN. It has been widely reported that Kleiner Perkins is 

an investor in your company. Are those news reports accurate? 

Mr. FISKER. We have read the reports of that news and Kleiner 

Perkins—— 

Mr. JORDAN. Is the news right or wrong? 

Mr. FISKER. Kleiner Perkins has a board member and a board 

seat at Fisker Automotive and an investment. 

54 

Mr. JORDAN. Okay. And is it true that Mr. Gore, Al Gore, is a 

partner at Kleiner Perkins and John Doerr is a partner at Kleiner 

Perkins? It has been widely reported in the news that that is the 

case. I am asking you have you read those same reports and are 

they accurate. 

Mr. FISKER. Yes, I read those reports. 

Mr. JORDAN. Okay. And the fact is Kleiner Perkins has given over $2 million in political contributions in the 2008 election cycle, 

most of which went to Democrats, including President Obama. Did 

that in any way, in your judgment, influence the ability for Fisker 

to get a loan, get taxpayer money from the Department of Energy? 

Mr. FISKER. As I stated earlier, Fisker has not exercised any 

undue political favors or anything like that, and I am not aware 

of any. 

Mr. JORDAN. Did Al Gore have any influence on Fisker getting 

a loan from the Department of Energy? 

Mr. FISKER. Not that I am aware of. 

Mr. JORDAN. So you are telling me these guys were investors, 

widely reported in the news, they were big investors in Fisker and 

they didn’t have any influence on the process at all? 

Mr. FISKER. Not that I am aware of, no. 

Mr. JORDAN. Okay. John Doerr is the general partner at Kleiner 

Perkins, was an outside advisor to President Obama and met with 

him and key advisors many times to provide advice on the Administration’s green energy agenda. Again, widely reported in the 

press. Did John Doerr influence your ability to get a loan or the 

status of your loan after it was already given? 

Mr. FISKER. The designated board member at Fisker Automotive 

was Ray Lane, so I am not aware of what John Doerr did or did 

not do. 

Mr. JORDAN. Did Ray Lane have any influence? 

Mr. FISKER. Not that I am aware of. 

Mr. JORDAN. Well, we understand that on May 24th, 2011, John 

Doerr, Ray Lane, of Kleiner Perkins, widely reported to be an investor in Fisker, had a meeting with Jonathan Silver, who was the 

director of this ATVM program at the time, and others at the Loan 

Program Office. To your knowledge, was Fisker discussed at this 

meeting? 

Mr. FISKER. I am not aware of that. 

Mr. JORDAN. They didn’t tell you? They are big investors. 

Mr. FISKER. I do not recall this meeting. 

Mr. JORDAN. Well, that is actually the month before the loan was 

frozen. You don’t know if it was talked about? One month before 

it is frozen, these guys, big investors in your company, meet with 

Jonathan Silver, the guy who runs the program, and you don’t 

know if they talked about Fisker? 

Mr. FISKER. Like I said, I do not recall this meeting. 

Mr. JORDAN. Mr. Whitcombe, do you know if they talked about 

Fisker at that meeting? 

Mr. WHITCOMBE. I don’t know if they talked about Fisker. Mr. 

Silver was not on the Credit Committee, not on the Credit Review 

Board, and did not make any offers of conditional commitments. 

Mr. JORDAN. He runs the program, right? 

Mr. WHITCOMBE. Excuse me? 

55 

Mr. JORDAN. He is the boss of the program, right? 

Mr. WHITCOMBE. He is the executive director of the program, but 

he doesn’t sit on those committees and he doesn’t make the offers. 

Mr. JORDAN. He is ultimately responsible, right? That is how I 

view executive director. And he met with two guys who were part 

of Kleiner Perkins, a major investor in the company. I am just asking do you think they might have talked about Fisker? 

Mr. WHITCOMBE. He could have. 

Mr. JORDAN. All right. 

Mr. Fisker, you guys bought a GM plant in Delaware as part of 

your loan agreement with the Department of Energy. Did the fact 

that Vice President Biden was from Delaware have anything to do 

with your decision to build a plant there? 

Mr. FISKER. No, we did not build a plant, we bought a plant, but 

had no decision. 

Mr. JORDAN. Okay. Was there any talk of you locating in Delaware because it was not a right-to-work State? 

Mr. FISKER. No. We chose Delaware because of a great paint facility close to the port because we were planning to export more 

than 50 percent of the cars there, and there was a skilled labor 

force there as well. 

Mr. JORDAN. All right. 

I am going to yield to the chairman. Oh, excuse me, I have to 

yield to the ranking member. You have been waiting patiently. The 

gentleman from Pennsylvania. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

First, Mr. Chairman, I would like to first mention I would like 

the public journalists and the public reporting the proceedings 

today to know that every question asked today by the majority 

which referred to emails or perceptions of two individuals whose 

names we have heard, Ms. Cleghorn and Mr. McRay, were unfortunately individuals who were not informed by any conversation, 

interview, or request to those individuals about what the context 

was for these exhibits. In my opinion, the majority really has established no significance whatsoever, the emails entered into evidence 

today, and, in fact, we have good indication that they are being 

taken out of context. 

For example, when we talk about emails form 2012, Mr. 

Whitcombe, is it not true that Federal funding, Federal loan guarantees for Fisker ended in 2011? Is that true? 

Mr. WHITCOMBE. The last draw for Fisker was in early 2011. 

Mr. CARTWRIGHT. So they got no further draws after that, am I 

correct in that? 

Mr. WHITCOMBE. No, they didn’t receive any more advances 

under the loan agreement. 

Mr. CARTWRIGHT. All right. 

Now, Mr. Fisker, your testimony includes statements that there 

is hope yet for this company, am I correct in that? 

Mr. FISKER. I believe that the company has tremendous value. 

An amazing powertrain, developed another product for the future, 

which is to 90 percent engineered and 100 percent design; and all 

this IP lies within Fisker Automotive. 

Mr. CARTWRIGHT. Now, I do believe it is a fair question on behalf 

of the American taxpayers for us to know is there a possibility that 

56 

we can yet be repaid the loan money that the Federal Government 

has paid out. 

Mr. FISKER. Congressman, I am no longer with the company, so 

I cannot state on behalf of the company, but I do believe there is 

a lot of value in this company and I do believe that there is a possibility, but I cannot state on behalf of the company. 

Mr. CARTWRIGHT. Well, let me go at it this way. A hearing like 

this, does it make it easier or harder for a company like Fisker to 

move forward and attract private financing, including new investors? 

Mr. FISKER. Well, obviously, a company in distress, it is very 

tough to go through events that amplify that distress, where it 

really should be concentrating on capitalizing on the value within 

the company, concentrating on dealing with potential investors, 

choosing investors; and obviously, as we can see, the company has 

a lot to deal with, so it is probably very tough to be in the situation 

right now. 

Mr. CARTWRIGHT. And I am going to extend that question to Mr. 

Koehler. You are still with the company. The American taxpayers 

would like to get some or all of their money back from the Fisker 

company. A hearing like this, does that make it more or less likely 

that we will get our money back? 

Mr. KOEHLER. Well, it highlights the situation, of course. The 

media effect plays another role. We the company, we are working 

on this right now. We understand our responsibility to our investors as well, so we work day and night in finding a solution, and 

hopefully we will. 

Mr. CARTWRIGHT. Okay. 

Now, Mr. Whitcombe, you have heard out loud charges that political cronyism resulted in this loan guarantee to the Fisker company. My question is are you aware of any truth to that statement 

whatsoever? 

Mr. WHITCOMBE. Sir, I am not aware of any truth to that statement at all. We make our loans based on the merits of the transaction. I will also add if there was political cronyism and did affect 

the staff of the office of the loan guarantee program, you wouldn’t 

have much of a staff after that. There would be no compelling reason to be a professional there. 

Mr. CARTWRIGHT. Well, now, you have due diligence procedures 

to check out a company before loans like this are approved, am I 

correct in that? 

Mr. WHITCOMBE. We conduct extensive due diligence for all our 

loan program applicants for 1705, 1703, ATVM to the extent that 

those applicants are eligible and provide sufficient information to 

us, and then when we decide actually to enter into any kind of negotiation with them. 

Mr. CARTWRIGHT. Have you seen any evidence that the due diligence procedures that the Fisker company was subjected to are any 

different from th due diligence procedures that Ford, Nissan, or 

Tesla were subjected to? 

Mr. WHITCOMBE. The due diligence procedures that Fisker experienced, based on the credit documents that I read, were robust, 

solid, detailed, and time-consuming as well. I think we spent over 

57 

9 months in due diligence before the offer of conditional commitment was made to the company. 

Mr. CARTWRIGHT. Thank you. Finally, Mr. Whitcombe, you are 

familiar with the Energy Independence and Security Act of 2007. 

Is there anything in that Act that requires a guarantee of 100 percent success and 100 percent return on the American taxpayers’ investments in these types of new technology. 

Mr. WHITCOMBE. I am sorry, could you repeat the question again, 

sir? 

Mr. CARTWRIGHT. Under the Act, is there something that says we 

are guaranteed to get 100 percent back of every loan guarantee we 

issue? 

Mr. WHITCOMBE. It doesn’t provide for that at all. It states the 

eligibility requirements, the fact we have to have sufficient information, maximum leverage ratios, the types of vehicles and automobiles that we could potentially make loans to. 

Mr. CARTWRIGHT. I thank you for that. I also appreciate Mr. 

McHenry’s statement about slow-playing answers, and I assure you 

that I speak on behalf of this entire panel that we are way more 

interested in true answers than fast answers, and I thank you for 

your participation today. 

I yield back. 

Mr. JORDAN. Yes, we are interested in the facts, and I keep coming back to CCC credit rating, under-collateralized, half the value 

of the loan, couldn’t meet payroll prior to getting the loan, indicated that in an email sent to the Department of Energy. Still got 

the loan, yet there was no political influence. So it is always the 

way these are, it is either incompetence or political influence. And 

you are telling me, no, it wasn’t political influence, so it has to be 

incompetence. How do you give money to a company with those 

facts? That is what the American taxpayers want to know. 

Recognize the chairman of the full committee. 

Mr. ISSA. Thank you. I want to clear the record up a little bit. 

The ranking member seemed to imply that these documents 

weren’t good and they were incomplete. Isn’t it true that the minority has received every document we received through outside 

sources, which is basically every document we received, hundreds 

of thousands of documents, but they are not from DOE, they are 

from private sources like the ones we have been using here today? 

Is there some problem with the ranking member being able to have 

his staff prepared for today’s hearing? 

Mr. CARTWRIGHT. We think it is probably improper that we read 

about them in the press before we get them. 

Mr. ISSA. Didn’t you receive them? I think if you will check with 

your staff you will find out that these documents were secured by 

the committee through outside sources because DOE is 

stonewalling discovery, these were in fact delivered to the minority. 

Mr. CARTWRIGHT. Mr. Chairman, the answer is we got the documents, but we got them from outside sources, instead of the majority. 

Mr. ISSA. I am shocked that this committee would use whistleblowers or outside sources when we are getting stonewalled by an 

Administration that lies through their teeth, violates the Records 

Act, uses non-government emails to circumvent loan guarantee proVerDate Aug 31 2005 14:29 May 29, 2013 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 C:\DOCS\80920.TXT APRIL
58 

grams and their wrongful acts. I am shocked that we would go to 

other sources to find out we have been lied to. Are you? 

Mr. CARTWRIGHT. Mr. Chairman, if I may respond to that. 

Mr. ISSA. Of course. 

Mr. CARTWRIGHT. I think the American public expects more of us 

than this. They expect this panel to investigate inappropriate behavior together, as a panel. They expect us to investigate things in 

an intelligent and rational fashion, one where we share the documents and the information ahead of time; where the witnesses who 

authored documents are actually brought here to comment on the 

actual context in which they were written. We ought to make this 

panel a panel that is a truth-seeking enterprise. 

Mr. ISSA. Oh, yeah, it would be really good to have all the consultants here that were warning of these problems while DOE ignored it. We should have them up here so you can ask them questions as to why they did that. 

Mr. Whitcombe, you made a statement that just simply is not 

supported by the truth. You said that the John Doerr meeting 

wasn’t really important, so to speak, I am paraphrasing you, because it was with Jonathan Silver and he wasn’t on the loan committee. Isn’t it true that Jonathan Silver in fact was the barbarian 

at the gate; you had to get through him before you got to the loan 

committee, isn’t that true, he was the first point of contact and the 

person who ultimately saw whether it got to the loan committee? 

Mr. WHITCOMBE. Not true at all. 

Mr. ISSA. Okay. Well, let me ask a second question. 

Mr. WHITCOMBE. Applications are made through a portal; you 

can mail them in. 

Mr. ISSA. Yes, you can mail them. 

Mr. WHITCOMBE. You can get the application in any way you 

want to. 

Mr. ISSA. Okay, but he is in charge of the program, but you are 

not going to hold him accountable for any factor, and certainly he 

couldn’t influence the decision of the loan committee, is that right? 

Mr. WHITCOMBE. The credit committee acts independent of Mr. 

Silver. 

Mr. ISSA. If the credit committee acts independently, then why 

is it that Jonathan Silver circumvented the Federal Records Act deliberately and in a conspiratorial fashion in which he says do not 

communicate because it might allow these to be traced, and then 

he contacts all the individuals, including individuals on the credit 

committee, including the chief of staff who sits on the credit committee, lobbying on behalf of activities? Are you aware of these 

emails? 

Mr. WHITCOMBE. I can’t speak for Mr. Silver. 

Mr. ISSA. Are you aware of these emails? 

Mr. WHITCOMBE. I can speak for myself. 

Mr. ISSA. Are you aware of these emails? 

Mr. WHITCOMBE. Third-party emails from non-DOE accounts? I 

have not had the chance to review those. 

Mr. ISSA. Okay, so you are not aware that Jonathan Silver violated the Federal Records Act? 

Mr. WHITCOMBE. If he violated any acts, that is unfortunate. 

59 

Mr. ISSA. Unfortunately, DOE has been made aware of it and 

doesn’t seem to do much about it. As a matter of fact, if you are 

not aware, let me make you aware. The Department of Energy has 

tried to say that we cannot have those records because, in fact, 

they are Federal records and, thus, they are not going to give them. 

When we discovered them, they said, well, they are really our 

records. But, of course, you claim not to have them. 

So before you come before this committee again, I would hope 

you would be prepared to realize that Jonathan Silver circumvented the Federal Records Act, lobbied individuals, and met 

with what I believe to be an investor in this company. 

Mr. Fisker, I am going to make you aware of something. If you 

do not answer here today a question which I believe is appropriate, 

I will have you back here. Now, to the best of your knowledge, and 

I will ask both of you, in 2011, March through May of 2011, was 

Kleiner Perkins an investor in your company? 

Mr. FISKER. Yes, they were. 

Mr. ISSA. For how much? 

Mr. FISKER. That, I do not recall at that point in time. 

Mr. ISSA. Mr. Koehler, how much? 

Mr. KOEHLER. Oh, at the time? I couldn’t answer that, between 

March and May. 

Mr. ISSA. More than a dollar? 

Mr. KOEHLER. Yes, sir. 

Mr. ISSA. More than $1 million? 

Mr. KOEHLER. Yes, sir. 

Mr. ISSA. More than $10 million? 

Mr. KOEHLER. I believe so, yes. 

Mr. ISSA. More than $100 million? 

Mr. KOEHLER. No, sir. I don’t think at the time, no. 

Mr. ISSA. Okay. So between $10 million and $100 million. 

Mr. KOEHLER. I couldn’t really speculate how much money it was 

at the time, but they were a significant investor. 

Mr. ISSA. Okay. So at a time in which a principal founder, one 

of the founders, John Doerr, has a $10 million to $100 million 

worth of investment, risk in your company, he meets with Jonathan Silver, the head of this program, who has regular communications with the credit committee and others. My question to you is 

were you aware of his ability to have these kinds of meetings, either of you? 

Mr. KOEHLER. I was not aware of the meeting, no, sir. 

Mr. ISSA. Were you aware of his ability to have these kinds of 

meetings, in other words, his access to the White House, his access 

to the President, his access to DOE? 

Mr. KOEHLER. No, I was not aware of that, sir. 

Mr. ISSA. Would it surprise you to know that on March 24th, 

2010, April 16th, 2010, October 4th, 2010, May 14th and 15th, 

again, 2011, and May 24th, 2011 he had these kinds of meetings 

regularly? So were you aware that he was a close advisor to the 

President on these kinds of matters? 

Mr. KOEHLER. No, I was not, sir. 

Mr. ISSA. Do you believe that he put a board member onto your 

board to keep him informed and his firm informed as to the fiscal 

condition of your firm? 

60 

Mr. KOEHLER. I do not believe so because Ray Lane was the first 

contact within Kleiner Perkins when we discussed the first small 

investment into the company. 

Mr. ISSA. But when did a board member come from Kleiner Perkins? 

Mr. KOEHLER. It was Ray Lane, basically at the beginning, when 

we discussed the program. 

Mr. ISSA. So the point is that Ray was on the board and knew 

the financial condition of the company and the need for additional 

capital and the possibility that you were going to get a loan from 

DOE. 

Mr. KOEHLER. Like other board members too. 

Mr. ISSA. Okay. So you have a direct representative of Kleiner 

Perkins, partner or involved directly with the principal partner, 

John Doerr, who is sitting on your board, knows you need the 

money, goes back to Kleiner Perkins and presumably informs them 

that their $10 million to $100 million investment is at risk; that 

in fact they need a new source of money. Then you steadily get a 

source of money, is that right? 

Mr. KOEHLER. I have to speculate based on that. I don’t know the 

answer to that. 

Mr. ISSA. You know that in fact John Doerr is a principal and 

that you had a representative of the company, and that they had 

between $10 million and $100 million, in your estimation, of risk. 

And you have already said that the company’s condition was risky 

at that point. 

Mr. KOEHLER. That is correct, sir. 

Mr. ISSA. Okay, probably the final point, Mr. Fisker, we brought 

you here for a reason, and I am going to close my questioning very 

briefly. We didn’t bring you here because your car company is in 

trouble. We didn’t bring you here to, in fact, question any aspect 

of your aspiration for a car. As a matter of fact, we didn’t bring you 

here to denounce the fact that you asked for this loan. Lots of companies throughout America asked for the loan. I supported in a letter a company that had an innovative electric hybrid car that had 

low drag. They didn’t get a loan, but I certainly supported their application or their aspiration for that. 

What we have questioned here today is how DOE failed to administer over this program, missed connections, and failed to do 

their job. And I hope the record is very clear. We don’t blame anybody for trying to get a loan. Programs are there; Congress votes 

on them. Partisan or nonpartisan, from the point that they are 

signed by the President, you have every right to try to get that. 

This committee looks at waste, fraud, and abuse, and we have been 

stymied by this Administration’s stonewalling and refusal to provide any level of transparency. The documents you have seen 

today, for the most part, are documents we got around the Department of Energy, and for that reason you found yourself here today. 

I want to thank you and your COO for being here today. It is 

not an easy job to come before Congress. We make it a point to get 

all the information we can from the branch we oversee, the executive branch. When we can’t get it, these kinds of hearings can be 

particularly painful. 

61 

Mr. Whitcombe, I hope today you will go home a little bit different than you came in. I didn’t sense it in your combative answers and so on, but I hope you will become familiar with Jonathan Silver’s activities and, for that matter, many other individuals 

at DOE who routinely circumvent the Federal Records Act and, in 

fact, are part of a pattern of when they want to say something they 

don’t want to have seen in the future, they use their private 

emails. Under the law, they are not private emails, they are public 

documents; and I would hope you take that back with you. 

Mr. Chairman and ranking member, I thank you for your indulgence and yield back. 

Mr. JORDAN. I thank the gentleman. 

I would ask unanimous consent to enter into the record an email 

from John Doerr to Jonathan Silver dated June 23rd, 2011. Without objection. 

Mr. CARTWRIGHT. Mr. Chairman, I would ask that The Washington Post fact checker article, referring to the four Pinocchios. 

Mr. ISSA. I object. I object. That is overtly political and doesn’t 

go to any substantive substantiation of fact. 

Mr. JORDAN. Objection heard. The document will not be entered. 

Anything further? 

Mr. CARTWRIGHT. I would just like to finish by saying, on behalf 

of the minority, we are not averse, Mr. Chairman, to having any 

DOE employee, any consultant with any company, any witness 

with actual knowledge of the controversies before us testify before 

this committee. What we think is wrong is putting witnesses under 

oath and forcing them to comment about what other people wrote 

at other times, without knowing the context or having a chance to 

really go through the documents. 

Thank you, Mr. Chairman. 

Mr. JORDAN. The gentleman from North Carolina, Mr. Meadows, 

is recognized. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

In light of that comment, let me go ahead and ask that slide 18 

be put up, because, Mr. Koehler, this is actually an email from you 

to the Department of Energy’s employee. In this email you stated 

that you mentioned that the board might consider to combine both 

programs and ‘‘I am really nervous that this could create a delay 

for the Karma program.’’ Then you go on to say that this potential 

delay would put the Karma program on hold and you would lose 

valuable time. 

It sounds like, to me, that the DOE was asking you to make a 

decision about your business that you were not comfortable with. 

Is that true? 

Mr. KOEHLER. Well, I was nervous that the Karma could experience a delay because we have to answer more questions for the Atlantic program, correct. 

Mr. MEADOWS. All right, so you were not comfortable with that 

decision, is that correct? 

Mr. KOEHLER. I didn’t know the outcome. I was basically investigating what does it mean for the Karma program. We want to 

continue, not to lose any time. 

Mr. MEADOWS. All right. So you are the COO and so if you get 

this and you say that you are concerned about the delay, how did 

62 

that affect your projections in terms of the number of cars that you 

said that you could get done by the particular time? 

Mr. KOEHLER. Well, at the time there was no delay, there was 

a possibility for a delay; and I tried to find out if there is truth behind that. 

Mr. MEADOWS. So did it affect your projections? 

Mr. KOEHLER. No, it did not. 

Mr. MEADOWS. All right. So you are saying that you just sent 

this email and you said you sounded like you were concerned, but 

it really didn’t prove, as a matter of fact, that it would change your 

projections? 

Mr. KOEHLER. At this point in time, this was a point of discussion if any delay could impact the Karma program, and we discussed it with the Department of Energy like we discussed many 

other things. 

Mr. MEADOWS. All right. So you were talking about combining 

these two loans, is that what you were talking about at that time, 

that you were concerned about? 

Mr. KOEHLER. Well, the loans were still two separate loans, but 

if the second loan needs to approve at the same time the first loan 

needs to be approved, the question I had at the time—— 

Mr. MEADOWS. Why is that? Why would they have to be approved at the same time? Because that is my next question. Let’s 

look at this. Did the DOE indicate that they would not approve the 

$169.3 million loan without also approving the $359 million-plus 

loan? So they tied them together, DOE did that? 

Mr. KOEHLER. They weren’t tied together. We had to basically 

show—— 

Mr. MEADOWS. Well, then why would they be two separate loans? 

You just said that one was conditioned on the other. 

Mr. KOEHLER. If we had waited for an approval, to get an approval for the second loan at the same time the first loan is approved, then the work is duplicated. 

Mr. MEADOWS. Okay, but I thought that in earlier testimony, in 

earlier evidence, did it not say that you were first denied for this 

first loan? The CRB said that they would not approve it because 

it did not meet their policy requirements? 

Mr. KOEHLER. I saw the email. That is an internal Department 

of Energy email. 

Mr. MEADOWS. So that was the first that you have ever heard of 

the fact that your first loan would be denied, was today? 

Mr. KOEHLER. No, that is not true. That is not what I said, sir. 

What I said is the email is what I saw for the first time. 

Mr. MEADOWS. It is amazing how the recall that we have. When 

we ask the questions, we have very ambiguous answers that say 

I didn’t see that email, I didn’t know this. I think you understand 

the intent of the question. Did you know that the first loan had 

been—— 

Mr. KOEHLER. And I would like to help, sir. 

Mr. MEADOWS. Okay. 

Mr. KOEHLER. The loan for the Karma program included financial due diligence, due diligence on the marketing side, on the sales 

side. The same work has to be done on the KX, on the Atlantic program, because of the KX at the time. But the Karma was much furVerDate Aug 31 2005 14:29 May 29, 2013 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 C:\DOCS\80920.TXT APRIL
63 

ther along, so we had much more information already, which the 

Department of Energy investigated, and the second loan was basically getting started, the investigation and the marketing initiatives and everything else. And I knew from A.T. Kearney, for example, that a marketing study cannot be done overnight, so my 

concern here was how much more work do we have to put into this 

before we can move forward on the Karma program. 

Mr. MEADOWS. All right. But you had been told that the $169 

million loan would be turned down by itself, is that correct? 

Mr. KOEHLER. I was told by the Department of Energy that the 

approval for both programs would be easier made as basically—— 

Mr. MEADOWS. So you were not told that it was turned down by 

itself. I thought you just said that you knew that it had been 

turned down by itself. 

Mr. KOEHLER. The Department of Energy came back to us and 

told us that we have to go through the KX development, KX approval, we have to explain how we do it, then both programs together could be approved. 

Mr. MEADOWS. So the DOE said that you had to combine these 

two, is that what you are saying? 

Mr. KOEHLER. It was still two separate programs. 

Mr. MEADOWS. But they said in order to be approved you had to 

approve both of them, is that correct, Mr. Whitcombe? Is that true? 

Mr. WHITCOMBE. It would make sense that you would make a 

loan approval, even for two separate programs, at the same time, 

because you are providing a consolidated outlook of the company. 

It would make it much more streamlined to present to credit committee, credit review board, and the secretary so everyone understands what the business plan is. 

Mr. MEADOWS. All right, so did you or did you not turn down the 

$169 million loan originally asked for? Was it turned down? 

Mr. WHITCOMBE. What you mentioned, we turned it down on policy considerations, as I believe the request for finance manufacturing in Finland, and by law we couldn’t manufacture in Finland, 

so it isn’t even turned down; we couldn’t even have proceeded on 

that course at all. 

Mr. MEADOWS. So you are saying that it was illegal to do that. 

Then how did we reconfigure it and then somehow make it legal? 

Mr. WHITCOMBE. We can only make loans against eligible expenses for costs in the United States. 

Mr. MEADOWS. So you told them to go back and get their pen and 

paper out and try to figure out a way to combine these where we 

could possibly make it legal, because the first request was not 

legal? Is that what you are saying? 

Mr. WHITCOMBE. No, I am not saying that at all, sir. We advised 

them on their first request that was for overseas operations and 

that it would be better for you to make an application, we would 

go to credit committee to approve, if it was so approved, for eligible 

expenses to be deployed in the United States. As simple as that. 

Mr. MEADOWS. So yes or no, was the first loan turned down? Yes 

or no? Or do you not know? You are under oath. 

Mr. WHITCOMBE. I understand that, sir. 

Mr. MEADOWS. Just yes or no, was it turned down? 

64 

Mr. WHITCOMBE. It wasn’t turned down; it never went to credit 

committee. 

Mr. MEADOWS. All right. So then what is the basis for combining 

the two loans? So we don’t turn it down and now we say you have 

to go $169 million is not enough to risk of the taxpayers’ money, 

let’s make it a little bit more riskier and let’s go with over $500 

million and make it really risky. Is that what you are saying? 

Mr. WHITCOMBE. This is for the two different vehicles, correct? 

Mr. MEADOWS. Right. One vehicle that had not been even built 

at the time that the loan was approved and one that was futuristic. 

Mr. WHITCOMBE. Fisker running the business. The Fisker is 

going to run the business for two different vehicles and, as you 

noted, there is carryover parts, they are tied together. 

Mr. MEADOWS. Sixty percent. 

Mr. WHITCOMBE. Sure. 

Mr. MEADOWS. Well aware of it. 

Mr. WHITCOMBE. It makes much more sense. 

Mr. MEADOWS. So it would make much more sense on a risky 

venture that is a risky technology to risk more taxpayer dollars. 

You are a credit guy and you have been in it a long time. How 

could that make more financial sense? 

Mr. WHITCOMBE. I made no comment about risk. What I said is 

in terms of understanding the entire business related to the Nina 

and the Karma, as far as making its loan application, because all 

the employees of a company, all the designers, all the engineers, 

all the potential sales force, are focusing on both issues. So it would 

be very difficult to make a loan approval based on just one part of 

the business, it wouldn’t make any sense. 

Mr. MEADOWS. So your decision was to make it bigger would 

make it better, is that correct? 

Mr. WHITCOMBE. No, I didn’t say to make it bigger would make 

it better. 

Mr. MEADOWS. I know you didn’t say that. I am saying is that 

your decision? 

Mr. WHITCOMBE. Ultimately, it would as a larger loan application. 

Mr. MEADOWS. Last question, Mr. Chairman. 

It appears that the White House and the DOE were more interested in making this move for a second loan because it reopened 

an automobile plant in Delaware. Do you feel like the DOE did 

that, entered into any of the decision at all in terms of overemphasizing the requirement to have this second loan approved, Mr. 

Fisker? 

Mr. FISKER. No. 

Mr. MEADOWS. All right, so you know that that had nothing to 

do with it? 

Mr. FISKER. I don’t believe it did. 

Mr. MEADOWS. Okay. 

You, Mr. Koehler? 

Mr. KOEHLER. It was never a discussion we had with the Department of Energy, no. 

Mr. MEADOWS. All right, so when you went to get a plant in 

Delaware, it had nothing to do with any funds that you were about 

to receive. 

65 

Mr. KOEHLER. No, because the plan we had already, before we 

talked to the Department of Energy, was that our second car 

should be built in the U.S.; and the fact that we couldn’t build the 

Karma in the U.S. was simply based on we couldn’t find a manufacturer for this car in the U.S. at the time. 

Mr. MEADOWS. All right. So I know you looked at more than one 

location. Why did you do it in Delaware and not in Michigan? You 

were the COO. 

Mr. KOEHLER. Correct. We looked at several plants. We looked 

even at the West Coast plant Tesla is using right now. The main 

focus for us was 40 percent of the production was for the U.S. and 

60 percent for export. So having a plant closer to a port was much 

better for us. At the same time I was looking for a plant that was 

not shut down for some period because the equipment is in better 

use and the workers are still available. 

Mr. MEADOWS. Okay. And how many of these vehicles were ever 

produced in the United States? 

Mr. KOEHLER. The Atlantic is in development right now and no 

cars have been produced. 

Mr. MEADOWS. So zero? Zero? 

Mr. KOEHLER. Correct. 

Mr. MEADOWS. How many of the Karmas were produced here? 

Mr. KOEHLER. The Karma is produced in Finland. 

Mr. MEADOWS. So zero? So there has been no American car built 

with this DOE money, is that correct? 

Mr. KOEHLER. The Finland operation is assembling of the car, 

but the parts and components, to a large stake, come from the U.S. 

and are shipped to Finland. 

Mr. MEADOWS. Mr. Chairman, I thank you for your indulgence. 

I yield back. 

Mr. JORDAN. I thank the gentleman. 

Just a couple quick questions. I appreciate the gentlemen’s patience; you have been here a long time and we will get to the second panel here rather shortly. 

Mr. Whitcombe, have you ever done official Department of Energy business, any type of business on your private email account? 

Mr. WHITCOMBE. No, sir. 

Mr. JORDAN. Okay. Thank you. 

Mr. Koehler, did the fact that the Department of Energy insist 

that you take loans for both cars, did that hamper your business 

at all? 

Mr. KOEHLER. No, because what we had to do, we went through 

the kind of due diligence with the Department of Energy and parallel, at the same time, we raised money for the Karma so we were 

able to continue with the Karma program. 

Mr. JORDAN. Okay. 

Mr. Whitcombe, I am going to have you look at just a couple 

more documents, if you could. First is just the minutes. So, to the 

minority, this is just the minutes of the meeting of the Department 

of Energy Credit Review Board. So pretty basic. The very name at 

the top is Mr. Poneman, Deputy Secretary of Energy. My understanding is he is currently the acting secretary. Is that accurate, 

Mr. Whitcombe. 

Mr. WHITCOMBE. I believe he was just sworn in, sir. 

66 

Mr. JORDAN. Okay. So he is, right? 

Mr. WHITCOMBE. I believe so, sir. 

Mr. JORDAN. Okay. If he was sworn in, he is the acting secretary. 

Turn to the second page here. We have some statements from the 

minutes or some pullouts from the minutes talking about the involvement of Mr. Poneman. Now, again, this is April 11th, 2012. 

Deputy secretary asks if the company was adhering to its business 

plan; the company had been revising the plan, lowering the targets, 

equity. Deputy secretary indicated the loan loss reserve credit subsidy, deputy secretary asks if there was a scenario that would lead 

to DOE’s resuming the disbursements. So obviously the minutes report Mr. Poneman was actively involved. 

Then I want to put up, a month later, actually six weeks later 

we have a communication from Department of Energy lawyers, Ms. 

Beard and Ms. Richardson, it looks like, and it now says the deputy secretary should be recused from loan program deals and specifically lists because he has an interest in the following companies, 

Fisker being one of those. 

So, again, you can comment on it if you want, but it seems like 

we have the guy who is the deputy secretary at the Department 

of Energy engaging in discussions regarding loans of taxpayer 

money when he has a financial interest in those companies. We 

have lawyers communicating Department of Energy lawyers, not 

some outside consultant, Department of Energy lawyers communicating that he should not be engaged in this conversation. 

Any comment, Mr. Whitcombe? 

Mr. WHITCOMBE. I am sorry, sir, I can’t comment to the acting 

secretary’s personal business. 

Mr. JORDAN. Were you aware of the recusal? 

Mr. WHITCOMBE. I was aware, yesterday, of the recusal. 

Mr. JORDAN. Okay. All right. 

Just one last thing I want to do with Mr. Fisker, if I could. So, 

Mr. Fisker, again, back to where we left off, it has been widely reported that Kleiner Perkins has an interest in your company. Some 

of the principal players there are John Doerr, Ray Lane, Al Gore. 

We know that, it has been widely reported in the news that Mr. 

Doerr is involved in President Obama’s Economic Recovery and Advisory Board. So here is what I am trying to figure out and here 

is what the question the American taxpayers would ask. So you 

have these individuals without dispute, widely reported in the 

press, very connected politically with the Administration, who also 

happen to have a financial interest in Fisker, who were at the 

White House multiple times, and yet you say they didn’t do anything to help you secure the loan. 

Mr. FISKER. Chairman, I would like to set the record straight. 

The only representative from Kleiner Perkins that was involved 

with Fisker is Mr. Ray Lane. He is the only representative that is 

involved with Fisker. 

Mr. JORDAN. But it is accurate, I mean it has been widely reported in the press, Mr. Fisker, there was a big article in Time 

magazine a few years ago about the influence Mr. Doerr has with 

this Administration relative to the green energy industry, and he 

is a principal in Kleiner Perkins. Is that accurate? 

67 

Mr. FISKER. Yes, but I am not aware of what Mr. Doerr does in 

his spare time or elsewhere. 

Mr. JORDAN. All I am suggesting is, I am just pointing out the 

facts. He is a principal at Kleiner Perkins; they have a major investment in your company; he is part of the Economic Recovery 

and Advisory Board; he has had meetings with Jonathan Silver 

about the same time that there was a hold put on your loan; and 

yet you say there was no political influence at all. 

Mr. FISKER. Not that I am aware of. 

Mr. JORDAN. Okay. So do you think it is fair, then, for the American taxpayers to ask the question? Okay, no political influence involved getting this loan, and yet you lost $200 million of taxpayer 

dollars, you were under-collateralized, you couldn’t meet payroll, 

you had a CCC rating, and you got taxpayer money. So again I always come back to this basic question: It has to be one or the 

other. It is either complete incompetence from the Department of 

Energy, and that may in fact be the case. Mr. Whitcombe hasn’t 

given us a whole lot of answers. He couldn’t tell me, of the other 

four companies, what their credit ratings were. There were only 

five companies that got your money. He couldn’t tell me what the 

other credit ratings were. We know what Fisker was; it was bad. 

So it may be complete incompetence. But it has to be one or the 

other. I am just asking you, as a guy who is no longer involved in 

Fisker, even though it has your name, you are no longer involved, 

you are out. Which do you think it is, incompetence on their part? 

That is the question the American taxpayers are asking. 

Mr. FISKER. Mr. Chairman, I do believe that, first of all, we followed all the procedures in applying for the loan. I think Fisker 

Automotive has contributed in a huge way to develop new technology that is recognized to be part of the future. Whether we want 

to develop here in the U.S. or whether we want to buy it from 

somewhere else, it is going to be part of the future, and I think it 

is extraordinary what the people here in America have done at 

Fisker Automotive in developing this automotive technology. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

Mr. Chairman, earlier this afternoon the chair took the extraordinary step of disallowing a piece of evidence to come into the 

record. This was a Washington Post article entitled, Four 

Pinocchios for an Unproven Romney Claim of Crony Capitalism. 

Now, rather than burden this panel with an insistence on a vote 

of the full panel on a challenge to this ruling on the admissibility 

of this article, I would propose to read briefly from it. 

The Washington Post wrote this. This was in the Fact Checker: 

Hoping to turn attention away from questions about his departure 

from Bain Capital a decade ago, Mitt Romney, this week, has 

sought to focus attention on what he calls President Obama’s crony 

capitalism. We have dealt with this charge before, but this week 

it seems the Romney campaign has upped the ante, trying to make 

a connection between the President’s contributors and the President’s policies. We will deal with some of these claims in more detail at a later date, but today we will look at the question of Fisker 

Automotive. This case keeps coming up, and it really feels like 

whack-a-mole. Romney now has raised the stakes by asserting a 

connection between the loan and campaign contributors, and his 

68 

campaign was sufficiently proud of his statement that he emailed 

it to reporters. The facts: Fisker has developed a luxury plug-in 

electric sedan called the Karma that retails for $108,000, currently 

manufactured in Finland. It hopes to develop a $50,000 sedan 

named the Atlantic that would be manufactured in Delaware. Earlier this week Romney aides held a briefing for reporters. Senior 

Advisor Ed Gillespie singled out John Doerr, a wealthy venture 

capitalist at Kleiner Perkins Caufield & Byers, who was instrumental in funding Netscape, Amazon, Google, and other Internet 

companies. ‘‘You know, you have John Doerr who raised a lot of 

money for President Obama, you know, got appointed to an economic recovery advisory board,’’ Gillespie said, ‘‘and then his firm 

had a big investment in Fisker Automotive, which got over half a 

billion dollars in loan guarantees from the Department of Energy, 

which did not result in jobs being created in America but actually 

jobs being created overseas in Finland, but Kleiner Perkins did 

quite well.’’ Gillespie appears to be suggesting that because Doerr 

raised money for Obama, he was rewarded with a big loan for a 

company in which his firm invested. But the logic is more the political equivalent of bank shot in pool and the ball doesn’t quite get 

in the pocket. First of all, the Kleiner partner most closely associated with the Fisker investment is Ray Lane, who features the 

Fisker logo on his Kleiner Web page. There is even a You Tube clip 

of him getting into his Karma sedan. The contributions database 

at OpenSecrets.org shows that Lane contributes to some Democrats, but mostly Republicans; and he gave money to Rudolph 

Giuliani and John McCain in 2008, not Barack Obama or other 

Democrats running for president. He also contributed to George W. 

Bush in 2008 and Bob Dole in 1995. However, he has praised the 

Obama Administration for its willingness to back alternative energy ventures, saying it would be silly to think an automobile company could be created without Government help. And speaking of 

Kleiner, a regular contributor to Romney and a $100,000 contributor to Romney’s super PAC, Restore our Future, is Meg Whitman, 

the database shows. Whitman, now chief executive of Hewlett 

Packard, was a strategic advisor to Kleiner in 2011. 

And I will stop there, Mr. Chairman. That is The Washington 

Post article to which objection was raised. And rather than demand 

a vote of the committee, I read that into the record. Thank you, Mr. 

Chairman. 

Mr. JORDAN. I thank the gentleman. I would just point out that 

maybe The Washington Post would change its decision based on today’s hearing, the evidence we have brought forward. Time magazine had a story like this. Your March 15th, 2010 quote from the 

President of the United States when John Doerr was at the White 

House, it said, John, before a group that included Treasury Secretary Geithner, Economic Advisor Larry Summers, Chief of Staff 

Rahm Emmanuel, you’ve got the floor. Second paragraph: In the 

past few years, however, Doerr’s interest in Beltway policies deepened as he bet hundreds of millions of dollars in private capital on 

green energy startups, many of which were seeking Federal subsidies and regulatory aid. 

So, again, you are asking the taxpayers to not assume Mr. Doerr 

cared about it, Mr. Lane cared about it when they were investors 

69 

in the company and they meet with the White House and are on 

the President’s Economic Advisory and Review Board. I just don’t 

think that stands up to common sense that the American people 

have. 

I would also point out, when you are talking about Pinocchios, 

Mr. Romney holds no office. The Washington Post, just six weeks 

ago, gave the Secretary of Education four Pinocchios out of four 

Pinocchios for lying to the American people when he stated 40,000 

teachers were going to lose their job because of sequester. There is 

a public official a cabinet secretary getting four Pinocchios. This is 

a candidate from last year’s campaign. 

With that, we want to thank our witnesses on the first panel. I 

appreciate your patience and time. You all are dismissed. Thank 

you. 

We will quickly move to our second panel and we will take testimony from our second witnesses. 

[Pause.] 

Mr. JORDAN. It is going to be sparse, as you can imagine. Thanks 

for sticking around. I know it was difficult. Mr. Cartwright just 

stepped out, but he will be right back in. I can swear you in, 

though. We will swear you in, then as soon as Mr. Cartwright 

comes back in, we will get right to testimony. So if you would stand 

up, raise your right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth, so help you God? 

[Witnesses respond in the affirmative.] 

Mr. JORDAN. Let the record show both answered in the affirmative. 

Okay, we have Mr. Nicolas Loris, who is the Herbert and Joyce 

Morgan Fellow at The Heritage Foundation, and Ms. Zoe Lipman, 

who is an independent consultant focused on issues related to fuel 

economy and advanced vehicles. 

You know the deal, you have five minutes, more or less. We will 

wait for Mr. Cartwright, then we will start with Ms. Lipman and 

then Mr. Loris. 

Ms. Lipman, thank you. You are up. 

STATEMENT OF ZOE LIPMAN 

Ms. LIPMAN. Good evening, Chairman Jordan and Ranking Member Cartwright. Thank you very much for inviting me to give some 

context around the Advanced Technology Vehicle Manufacturing 

Loan Program. 

I am Zoe Lipman. I am a consultant focusing on policy and 

projects that connect clean energy and transportation innovation 

with economic recovery. But previously I spent 10 years at the National Wildlife Federation, where I headed our advanced automotive and fuel economy work, and before that our climate policy 

in the Midwest; and in both of those contexts the question of how 

clean energy and advanced technology progress go forward, we innovate in our core industries and we rebuild the economy at the 

same time is absolutely critical. 

I wanted to talk a little bit about where the ATVM came from, 

because it originated from the same kind of interest in seeing us 

70 

lead in the next generation of advanced energy and efficiency technologies, but at the same time rebuild the American economy. 

Others have talked about how this program was part of the 2007 

energy bill, a bipartisan program signed into law by President 

Bush. I would add that it is something that had the consistent support not just of labor, of environmental groups, but also of the 

Chamber of Commerce. It really is something that brings together 

the interests in this Country around how we go forward as a Nation. 

In the 2007 energy bill, it did two things that affected the auto 

industry. One was it authorized a large increase in the fuel economy standards, the first in decades, that did so under a new attribute-based system that was both more competitively fair and ensured that consumers, no matter what kind of vehicle they drove, 

saw improvements in fuel economy. But at the same time it recognized that making that kind of big step forward, a next generation 

of vehicles, requires very significant investment, tens of billions of 

dollars annually in the industry; and that investment could come 

from anywhere and it could be made anywhere. 

Today, not just companies, but countries are competing aggressively to see who will lead in the next generation of technology. In 

a global economy, we have a global economy, we don’t have to be 

the only manufacturer of the next generation of vehicle technology, 

but we need to be one of the leaders if our economy is going to be 

strong going into the future. Effective market-based public-private 

partnerships like the ATVM make it more attractive to invest in 

U.S. facilities and that spur and attract business innovation are 

critical to this process. 

Now, I want to stress that the ATVM program are loans. As we 

have talked today, where companies are successful, they will be 

paid back with interest, and the vast majority are. 

Second, the program does not pick technologies; it sets a standard, a criteria, and the portfolio of loans that it has considered support the full range of technologies, from innovations that improve 

the fuel economy of the Ford F–150 without impacting horsepower 

to new made-in-America electric batteries in Tennessee. 

Now, we have seen a rundown of the programs and the funding 

in previous testimony. As people know, the bulk of the funding 

went to Ford for numerous projects, as well as to other startups 

such as VPG, building an innovative six-passenger van accessible 

to wheelchairs and fueled with natural gas. So Fisker is just one 

of a rather impressive portfolio of loans that have been, as people 

have said, up to now 98 percent successful. 

The taxpayer is doing well with this program, and communities 

and businesses are doing even better. I want to create just a quick 

picture of some of those loans. 

We have everything from loans where, if we look at the Ford 

manufacturing facilities in Michigan, that they are flexible facilities bringing hybrid powertrains back to the U.S. that were previously made in Japan; we see electric vehicles and batteries being 

made for the first time in the U.S. in Tennessee; and we see innovations that flow not just to the big auto companies and the assemblers here, but to the ecosystem of suppliers across the Country 

that are supported by these. 

71 

Finally, I want to say that investment in manufacturing here is 

not just an investment in jobs today, but in innovation for tomorrow. And I am happy to take further questions about how that has 

worked with this program, but it has been highly successful. 

[Prepared statement of Ms. Lipman follows:] 

72 


Insert offset folio 13 here 80920.013

Testimony of Zoe Lipman 

u.s. House of Representatives 

Committee on Oversight & Government Reform 

Subcommittee on Economic Growth, Job Creation & Regulatory Affairs 

"Green Energy Oversight: Examining the Department of Energy's Bad Bet on 

Fisker Automotive" 

April 24, 2013 

Good morning, Chairman Jordan, Ranking Member Cartwright. Thank you for inviting me to give some 

background on the Advanced Technology Vehicle Manufacturing loan program. 

I am Zoe Lipman, a consultant focusing on policy and projects that connect clean energy and 

transportation Innovation with economic recovery. Previously I spent ten years with the National 

Wildlife Federation where lied NWF's work on fuel economy and advanced and electric vehicles, and 

before that NWF's climate policy program in the Midwest. In all of these areas, determining how we 

meet our energy and climate challenges, innovate in core industries, and rebuild our economy at the 

same time is a central question. 

The ATVM was born out of just this kind of understanding - and out of pragmatic bipartisan 

compromise. The ATVM is not new - it was created as s136 of the bipartisan 2007 Energy 

Independence and Security Act - the 2007 Energy Bill - signed into law by President Bush. That bill did 

two major things in that affect the auto industry: It required the first major increase in fuel economy in 

decades, and did so under a new attribute-based structure that put full-line manufactures like Ford, 

General Motors and Toyota on a more competitively equal and consumer friendly footing 

And it recognized that retooling factories to meet this challenge was a significant undertaking, and one 

that it was critical to do in this country if we were going to capture the full economic benefits of a new 

generation of vehicles. The engineering and retooling costs associated with meeting the new fueleconomy standards and consumers desire for more efficiency run to the tens of billions of dollars year 

across the entire industry. This money might be invested anywhere. 

Today, not just companies, but countries, are competing aggreSSively to lead in the next generation of 

advanced energy and transportation technology. In a global economy we don't need to be the only 

player in these rapidly growing industries but we need to be one of the leaders if our economy is to 
73 


Insert offset folio 14 here 80920.014

remain strong into the future. Effective, market based, public private partnerships like the ATVM which 

make it less expensive to invest in U.S. facilities, and spur and attract business innovation are critical. 

Section 136 authorized up to $7.58 in potential spending to enable up to $258 in loans. These loans 

were to retool or build factories in the US to manufacture vehicles that achieved greater than 25% 

higher fuel economy than a like vehicle. 

These are loans. Where companies are successful (and the vast majority are) those funds will be paid 

back to the treasury. The $7.58 authorized presumed a significant default rate - far higher than what 

has been experienced even with the current problems faced by fisker. 

Second, the program does NOT pick technologies - it sets a performance target and the portfolio of 

loans support the full range of fuel saving technologies - from advanced internal combustion engines 

that are transforming fuel economy - without sacrificing horsepowerl- in the new ford f150 pickup, to 

US made electric vehicles and batteries manufactured by Nissan in Tennessee. 

Starting in 2009, EPA and DOT, working together, extended these fuel-economy and carbon pollution 

standards, providing a clear globally competitive regulatory framework through 2025. This framework 

not only provides the certainty companies need for large scale investment but facilitates cost effective 

investment across global markets. 

At the same time - in the midst of a downturn in which few in the private sector were aggressively 

investing -- Congress appropriated the funds to implement the s136 or ATVM loans and made $88 in 

loans to five companies across the full advanced vehicle technology spectrum. In addition to Fisker, 

which recieved $193Mof a potential $529M loan, these include loans to major automakers and startups, across technologies and the nation. They include: 

• $5.98 to Ford which received loans to innovate, upgrade, and retool to build far more efficient 

gasoline, hybrid and electric vehicles and their powertrains in 11 plants across the country: 

o engine plants in Dearborn, Michigan; Cleveland, Ohio; and Lima, Ohio 

o transmission plants in Livonia, Michigan; Sterling Heights, Michigan; and Sharonville, 

Ohio 

o assembly plants in Chicago, Illinois; louisville, Kentucky; Dearborn, Michigan; Wayne, 

Micnigan; and Kansas City, Missouri 

• $1.458 to Nissan to retool their factory in Smyrna, Tennessee to bring production of their 

electric vehicle - and at an adjacent facility, its battery - to the United States. 

• $465M to Tesla- who has said it will repay its loans early - to retool the former NUMMI facility 

in Fremont, CA to build its second generation al/ electric sedan 

• $50M to the Vehicle Production Group to produce a 6 passenger, wheelchair accessible vehicle 

in Indiana that runs on Compressed Natural Gas 
74 


Insert offset folio 15 here 80920.015

As this committee has heard before, the success rate of DOE's larger loan portfolio is extremely high, but 

even the ATVM portfolio with a much smaller number of projects looks very good. Even if the full 

$193M to Fisker must be written off, that loss is less than 2.4%ofthe funds loaned and less than 3% of 

the budget authority for this program. The taxpayer is doing well, and communities and businesses are 

doing even better. 

Rolling up the projects I mentioned, the program has spurred and speeded reinvestment in hard-hit 

manufacturing communities across the nation and retained, brought back and/or added more than 

35,000 direct jobs .These loans have gone primarily major automaker facilities, which in turn support 

dozens or hundreds of supplier locations. Each of these plants depends on an ecosystem of suppliers of 

not just parts, but also of machine tools, steel, glass, rubber, advanced materials and electronics just 

to name a few. As the assemblers reinvest, it means new markets, innovation and investment in 

suppliers as well. And, importantly, all these things mean jobs for American workers 

Back in 2010 the UAW, NRDC and others authored a report that found that increasing fuel economy to 

40mpg by 2020 would add up to 150,000 jobs above business as usual- but with a Significantly greater 

proportion of those jobs in the US if fuel economy improvement was coupled with programs like the 

ATVM. A year later another study, Supplying Ingenuity found 150,000 workers in 47 states currently 

building components that improve fuel efficiency. It is these hundreds of companies that also stand to 

gain where policies like the ATVM encourage local advanced manufacturing investment. Building a 

robust, innovative supply base not only makes it easier for companies to manufacture here for global 

platforms, but more attractive for foreign companies to reinvest here to supply the American market. 

In other words, innovation to improve fuel economy means added content on every vehicle, and added 

content means more jobs. Programs that encourage investment in domestic manufacturing like ATVM 

mean more of those jobs HERE. 

Investing in manufacturing the next generation of vehicle technology in America is not just about more 

jobs today - it's about the competitiveness of our economy for tomorrow. Manufacturing is a critical 

component of our innovation policy. 

Domestic advanced manufacturing is essential to ensure that investments in science and R&D here 

don't end up building new companies abroad but provide the engine of business and job growth at 

home in the critical emerging industries. What's more, we increasingly see that if we do not continue to 

manufacture advanced technology we fail to generate the critical next generation innovation. 

Is it the A TVM perfect? No, but many have suggested that there should be more of it, not less. For 

example, several legislators, as well as labor and environmental organizations have urged that the 

program be broadened to make it easier for automotive suppliers and for medium and heavy duty and 

transit vehicle manufacturers be able to access the loans. Others have raised concerns that the program 

has become so cautious that valuable projects in the pipeline could not be funded. Some additional risk 

is inevitable in order for our economy is to move faster, further and over the long term to lead. 
75 


Insert offset folio 16 here 80920.016

Now clearly, when we are dealing with taxpayer money we need to have sound oversight and be 

mindful of risk, but we need to balance the risk in individual projects with the bigger risk for our 

economy if we fail to move quickly to compete with other nations in the next generation of clean energy 

and fuel saving technology. 

It's important to note that the transformation in automotive technology we're talking about here, isn't 

just building jobs and businesses. New more fuel efficient vehicles are also achieving the biggest single 

step forward in energy security and in cutting carbon pollution that we have ever made as nation, while 

saving consumers hundreds of billions of dollars and bringing them great new products. It underscores 

that aggressively inventing and making next generation advanced energy and transportation products 

and sustaining growth in a competitive global economy naturally run together. 

The ATVM has helped do that, it has done that by setting leading performance standards, leveraging the 

ingenuity of the private sector to take diverse business and technological approaches to meeting that 

challenge. It has done that in states and communities across the nation. There is nothing wrong with 

making it easier to create jobs building advanced technology in America, and there is a lot right with it. 

The ATVM program is one example of what it takes to keep the United States competitive with other 

nations that have set their sights on capturing the next generation of auto-industry jobs and all the 

economic benefits that go with those Jobs. Taking a step back, that is a success. 

I thank the committee for this opportunity to testify and I'm happy to answer any questions. 
76 

Mr. JORDAN. Thank you, Ms. Lipman. 

Mr. Loris. 

STATEMENT OF NICOLAS LORIS 

Mr. LORIS. Chairman Jordan and Ranking Member Cartwright, 

thank you for giving me this opportunity to discuss the Department 

of Energy’s bad bet on Fisker Automotive. My name is Nicolas 

Loris, and I am the Herbert and Joyce Morgan Fellow at The Heritage Foundation. The views I express in this testimony are my 

own and should not be construed as representing any official position of The Heritage Foundation. 

Investigating any potential cronyism between Fisker’s investors 

and its Federal supporters, and investigating any negligence on the 

DOE’s part throughout the loan process are worthwhile and necessary actions to protect American taxpayers and promote transparency in the Federal Government. But I would like to take my 

time to discuss the underlying cause of these problems, and that 

is the Federal Government’s involvement with investment decisions 

that are better left for the private sector. 

The Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program, as well as its loan guarantee programs, 

create a mechanism that reward special interest politics over market viability. The result is a systematic economic damage inflicted 

well beyond any loss the taxpayers may incur. 

When we politicize the economic process by allowing the Federal 

Government to highly influence decisions and investments, the incentive to lobby for those handouts is greater and the incentive to 

innovative lower cost and rely fully on private investment is substantially weakened. Such a process skews the rules of free enterprise. 

A dollar invested in a Government-backed project cannot simultaneously be invested into another company. DOE loans and loan 

guarantees pull capital out of the market and dictate who should 

receive it. This crowds out opportunities for new ideas and innovative technologies that may not reach the market because capital is 

diverted to projects that have higher political rates of return rather 

than economic ones. These programs are not jobs creators, but 

merely shifting labor and capital to where the Government wants. 

And to be clear, there is nothing wrong with more renewable energy or alternative fuels replacing conventional sources of energy. 

But that shift will be more effective when driven by market forces, 

not dictated through Government policy. 

And the market incentive for alternative fuels and technologies 

already exists. We have a robust demand for transportation and 

fuel. In fact, Americans spent $480 billion on gasoline and bought 

nearly 13 million new vehicles in 2011 alone. Globally, the transportation fuels market is a multi-trillion dollar one. If any alternative fuel technology captures a mere slice of that market, they 

will make billions of dollars in profit annually. 

And this is precisely why we don’t need the Department of Energy’s ATVM loan program, as well as the loan guarantee programs. 

Markets make these investments and take risks all the time. But 

rather than privatizing the gains and socializing the losses, risk 

and reward are properly aligned. 

77 

It is also important to stress that whether a loan or a loan guarantee recipient is profitable or bankrupt, the policy is a failure. 

Any success of a loan is not the same as success of a policy. First, 

there are companies like Fisker, where the DOE loan artificially 

made this dubious investment appear more attractive and lowered 

the risk of private investment. Private investors sunk over $1 billion into Fisker, but much of that private financing came after the 

Department of Energy approved and closed the loan for Fisker. 

These investors look at Government loans as a way to substantially 

reduce their exposure. 

A project may be an economic loser, but can attract private investment when the Government covers a substantial portion of the 

downside with guaranteed loans. It essentially becomes heads, the 

investor wins, and tails, the taxpayer loses. These bad gambles 

turn into good ones when Federal Government money is involved, 

and now taxpayers are potentially on the hook for the $170 million 

of loans Fisker drew down. 

Supporters of these DOE programs argue a few failures are 

worth the risk and the number of success stories far outweigh 

bankrupt companies or ones that are facing difficult financial 

times. But the fact is that even if a project receives a DOE loan 

or loan guarantee, it is a mistake to attribute that company’s success to the Federal Government’s investment. Many companies receive investments from the private sector because their technology 

is promising and worth the risk. In these cases, especially when 

the Government handouts go to more established companies like 

Ford, the DOE’s loan partially offsets private sector investments 

that would have been made without the Federal backing. 

Layering on additional subsidies further misallocates labor and 

capital to promote politically favored technologies and diminishes 

the role of market signals that truly drive innovation and economic 

activity. More stringent Government oversight and risk assessment 

may marginally improve the protection of the taxpayers’ money, 

but the best option is to get rid of the loan program altogether and 

allow competition to drive investment. This protects the taxpayer 

and will ensure that only the most promising new energy technologies move forward. 

Thank you, and I look forward to your questions. 

[Prepared statement of Mr. Loris follows:] 

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Insert offset folio 17 here 80920.017

~%undatio • LEADERSHIP FOR AMERICAfl. 

214 Muslluchusetls Avenue, NE. Washingtun DC 10002. (101) 546-4400. heritage.org 

CONGRESSIONAL TESTIMONY 

Green Energy Oversight: 

Examining the Department of 

Energy's Bad Bet on Fisker 

Automotive 

Committee on Oversight and Government 

Reform Subcommittee on Economic Growth, 

Job Creation, and Regulatory Affairs 

April 24, 2013 

Nicolas Loris 

Herbert & Joyce Morgan Fellow 

The Heritage Foundation 
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Insert offset folio 18 here 80920.018

My name is Nicolas Loris. I am an energy policy analyst and the Herbert & Joyce 

Morgan Fellow at The Heritage Foundation. The views I express in this testimony are my 

own, and should not be construed as representing any official position of The Heritage 

Foundation. 

I want to thank the members of the Oversight and Government Reform Subcommittee on 

Economic Growth, Job Creation, and Regulatory Affairs for this opporttmity address you 

concerning the Department of Energy's Bad Bet on Fisker Automotive. 

For decades the federal government has taken choice away from the individual and 

overridden preferences by mandating more stringent fuel efficiency in place of power, 

weight, and safety. Over the years the federal government has intervened even more in 

the automobile market by subsidizing the production and consumption of alternative 

vehicles and fuels with tax credits, mandates, grants, loan guarantees and loans. More 

specifically, the Department of Energy's Advanced Technology Vehicles Manufacturing 

(ATVM) loan program awarded $8.4 billion in loans to five companies from September 

2009 to March 2011. 1 

Fisker Automotive, the recipient of a $529 million loan from the Department ofEuergy 

(DOE) has come under dire fmancial straits. Investigating any potential cronyism 

between Fisker's investors and its relationship with the federal government and any 

negligence on the part of the DOE in underwriting and approving the loan are worthwhile 

and necessary actions to protect American taxpayers and promote transparency in the 

federal government - a goal championed by President Obama since he first ran for 

president in 2008. 

What is equally ifnot more important, however, is to emphasize what led to these 

problems in the first place and that is the federal government's involvement with 

investment decisions that are better left for the private sector. The government's 

intervention in the market decreases the incentive to innovate and increases the incentive 

to use the political process and lobby for handouts. Federal loans and loan guarantees 

promote cronyism that rewards political connectedness over market viability. Market 

viable technologies should not need fmancial support from the taxpayer. Whether a 

company that receives a Department of Energy loan is profitable or not, the program is 

misguided. Rather than seek to improve and reform DOE loan and loan guarantee 

programs, policymakers should eliminate them. 

Economic and Environmental Realities of the Electric Vehicle 

When President Obama took office, he touted an ambitious goal of putting one million 

electric vehicles on American roads by 2015. The Department of Energy recently 

lowered that projection to 250,000 electric vehicles, about .1 percent of all vehicles in the 

1 U.S. Department of Energy Loan Programs Office. The Financing Force Behind America'8 Clean Energy 

Economy, accessible at https:lflpo.energy.gO\-fOpalle id=45 (accessed April 22, 2013). 
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United States. 2 The economic and technological challenges of electric vehicles are large 

and the enviromnental benefits are dubious, at best. 

While consumers have concerns about electric vehicles' battery range, battery life 

expectancy and replacement costs, the primary reason for low electric vehicle demand is 

cost. Consumers must pay a premium for electric vehicles with the expectation that the 

savings in fuel costs will negate the higher sticker price and the electric vehicle purchase 

will eventually be a money-saver. But consumers are reluctant to pay that premium and 

are rightly skeptical that the fuel savings will make up the difference. One way of doing 

the comparison is to calculate how much more a new car buyer could afford in car 

payments with the monthly fuel savings. Using a 5 percent interest rate over 10 years 

(similar to new-car fmance rates), The Heritage Foundation calculated that the additional 

fmancing available from monthly fuel savings would come nowhere close to the premilUn 

paid for an electric vehicle. 3 

A September 2012 Congressional Budget Office report affirmed this. The CBO analysis 

found that plug-in hybrid electric vehicles will cost $12,000 more over the lifetime of the 

vehicle than a similar-sized gas-powered vehicle, even after factoring in fuel savings 

using a 10 percent discount rate. 4 Even a generous tax-payer funded $7,500 credit does 

not make up the difference. CBO also concluded that "All-electric vehicles are closer to 

being cost competitive with conventional vehicles than are plug-in hybrids with the same 

size battery, but the tax credits would still need to be about SO percent higher than they 

are now to fully offset the higher lifetime costs of an all-electric vehicle.,,5 

Fisker is in a category of its own when it comes to economic challenges. Fisker's luxury 

Karma was priced at $103,000. PrivCo, a research analysis firm focusing on privatelyheld companies, calculated that Fisker spent an astounding $660,000 on each vehicle 

produced. 6 Three important questions must be answered. 1.) Why are taxpayers helping 

to foot the bill with a $7,500 tax credit for a vehicle that costs over $100,000? 2.) Is this 

the type of risk we want to take with taxpayer-loaned money? 3.) Did the A TVM loan 

significantly hedge the risk of investors and would have they obtained that much private 

fmancing without the federal goverument's loan? 

Furthermore, the enviromnental benefits from going electric are questionable. Ifreducing 

greenhouse gas emissions is a goal, subsidizing the production and constunption of 

electric vehicles is one of the least effective tools to combat climate change. A 2012 

2 Bj0l1l Lomborg, "The Electric Car's Short Circuit," Project Syndicate. April!!, 201. accessible at 

bl!I>:ifwww.project-synrucate.org/conunentarylthe-faIse-promise-of-electric-cars-by-bj-m-lomborg 

3 By Nicolas Loris and David W. Kreutzer, Ph.D., "Economic Realities of the Electric Car. Heritage 

Foundation WebMemo No 3116, January 24. 2011. accessible at 

http://wv.w.heritage.orgiresearchireportsi2011/01!ecollotuic-realities-of-the-electric·car 

4 Congressional Budget Office, "The Effects of the Federal Tax Credit for the Purchase of Electric 

Vehicles." September 2012. accessible at !J!tp;! /"'" w. cbo. govisitesidefaulVfiles/cbofilesi attaclunellts/09-

20-12~t!lectric-YeDk!e~1 

51bid. 

6 PrivCo, "FISKER AUTOMOTIVE'S ROAD TO RUIN: How a "Billion-Dollar Startup Became a BilliollDollar Disaster" http://W\~.pl.ivco.com/fisker-automotives-road-to-mill (accessed April 22. 2013). 

2 
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report from the Journal of Industrial Ecology found that the manufacturing of electric 

vehicles produces over double the carbon dioxide emissions than that of a conventional 

car. 7 Further, if the car charges with electricity powered by coal and the battery needs 

replacement, the greenhouse gas reductions are marginal, at best. 

Profitable or Not, DOE's A TVM is a Failure 

In October of2011, DOE's Director of Public Affairs Dan Leistikow wrote on the 

Department of Energy's webpage, "Two years ago, critics said we shouldn't be investing 

in American auto manufacturing because the industry wouldn't survive. They were wrong 

then and they're wrong today. From well established names like Ford to innovative 

startups like Tesla and Fisker, America's auto industry is being reinvented, and the 

Department's loan program is helping play an important role."s 

Three years after the DOE closed its ATVM loan for Fisker Automotive, the company is 

on the verge of bankruptcy. The DOE loan artificially made this dubious investment 

appear more attractive and lowered the risk of private investment. For instance, private 

investors sunk $1.1 billion into Fisker but much of the private financing came after the 

Department of Energy approved and closed the loan for Fisker. Fisker, fomled in August 

2007, raised $94 million before the DOE approved the loan in September 2009. 9 Fisker 

raised another $57 million between the time DOE approved and closed the loan in April 

2010. After.DOE closed the loan, Fisker raised over $1 billion in various rounds of 

venture capital funding. 10 

Private investors look at government loans a way to substantially reduce their risk. Even 

if a project may be an economic loser but has a huge upside, private companies can invest 

a smaller amount if the government provides a loan. Those investments are especially 

attractive if the federal government complements loans with other policies like targeted 

tax credits, DOE research dollars, and fuel efficiency standards that allow electric 

vehicles to accumulate credits and then trade them with non-compliant manufacturers. If 

the project fails, private investors still lose money, but the risk was artificially distorted. 

Now taxpayers are potentially on the hook for the nearly $200 million of loans Fisker 

drew down. When economically uncompetitive teclmologies and companies cannot 

survive without the taxpayer's Clutch, there is a good reason these companies cannot fully 

attract private financing. These investors are using political calculus to hedge their bets. 

Success Stories are Dot a Result of the Program 

7 Troy R. Hawkins, Bhawna Singh, Guillaume Majeau-Bettez and Anders Hammer Stremman, 

"Comparative Environmental Life Cycle Assessment of Conventional and Electric Vehicles," Journal of 

Industrial Ecology Volume 17, Issue I, pages 53-64, Febmary 2013 

'Dan Leistikow, "Fisker, Tesla, and American Anto Innovation," U.S. Department of Energy, October 20, 

2011, accessible at http://energy.gov!al'ticJes/fisker-tesfa-and-american-auto-innovation (accessed April 22, 

2013). 

9 Fisker raised $68 million of the $94 million after submitting tbe loan application. 

10 PrivCo. "FISKER AUTOMOTIVE'S ROAD TO RUIN:How a "Billion-Dollar Startup Became a 

Billion-Dollar Disaster" htlj}:!IWv.w.pr;vco.comlfisker-automotives-road-to-ntin (accessed April 22, 2013). 

3 
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Whether it is the Department of Energy's A TVM loan program or its 1703 and 1705 loan 

guarantee programs, supporters argue a few failures are worth the risk and the munber of 

success stories far outweigh bankrupt companies or ones facing difficult financial times. 

But even if a project receives a DOE loan or loan guarantee, it is a mistake to attribute 

that company's success to the federal government's investment. 

There are companies that would. and often do. receive investment from the private sector because 

their technology is profitable or because investors find their technology promising and want to 

pursue the risk. In these cases, the DOE's loan partially offsets private-sector investments that 

would have been made without the federal backing. Tesla, the recipient of a $465 million 10lln 

through the ATVM program. had its initial public offering in June 2010. Although the car 

manufacturer reported $75 million in losses over the final three quarters in 2012, Tesla expects to 

report its frrst ever quarterly profit. 1I 

Whether Tesla remains profitable remains to be seen. And because mauy of the projects 

for both DOE A TVM and loan guarantees are in relatively early stages of development, 

labeling them successes is premature-and if they do go bankrupt, the taxpayer fimds are 

merely providing a lifeline. However, ifTesla's electric vehicles are the wave of the 

filture, they should have secured investment and loans through the private sector. 

Sinlilarly, Ford and Nissan North America ATVM loans to retool their factories to 

produce more fuel efficient and electric vehicles should have been completely privately 

financed outside of DOE. Having the federal government provide the loan privatizes the 

benefits and distributes any potential losses among the taxpayers. 

Furthermore, a successful federally-backed company does not mean it is a good deal for 

energy consumers. Representative Paul Ryan (R-WI) recently received criticism for 

including two solar-generation projects that received loan guarantees in his budget plan 

as "failed" projects despite the fact that Mesquite Solar 1 's project in Phoenix is 

generating electricity and SolarReserve's project is under construction and recently 

entered a contract to sell power to California's largest utility. 

Both companies are selling to California's Pacific Gas and Electric Company (pG&E). In 

fact, in Mesquite Solar l's case, they entered into a contract with PG&E before receiving 

the loan guarantee. 

California law mandates that the utility must purchase 25 percent of its electricity from 

renewable sources by 2016 and 33 percent by 2020. With respect to SolarReserve 

entering into a contract with utility PG&E, the state utility commissioner acknowledged, 

"This is expensive, there's no getting around it, but I think this technology is something 

that's worth investing in." Those investments should be determined in the free market not 

artificially skewed by using the political process to pick one technology over another. 

11 Jose Pagliery, "Tesla expects its first-ever profit," CNNMoney, Aprill, 2013. accessible at 

htlp:lfmolley .cnn.corul20 l3!04iOlinews/companiesJtesla-profitiindex.html (April 22. 2013). 

4 
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If electricity generated by these projects were competitive with other somces of energy, 

there wouldn't be a law mandating its use. Instead, families are forced into buying pricier 

electricity and taxpayers are on the hook if the project fails. 

One of the conditions of the A TVM program is that the applicant must be "fmancially 

viable without the receirt of additional federal funding for the proposed project other 

than the ATVM loan." 1 If that is the case, then these companies should seek private 

capital, not government capital. The demand for the vehicle will detennine whether that 

company or technology is financially viable. A truly financially viable company should 

not have a problem secw'ing private investments. 

The Incentive for Alternative Fuel Technology Already Exists 

Oil's dominance as a transportation fuel is not because a government program is lacking 

or because more taxpayer investments are needed to jumpstart a transfOlIDation in the 

fuel indUStry. At present, even with consistently higher prices, oil is the most efficient 

and economic somce of transportation fuel. 

Americans spent $481 biIlion on gasoline in 2011. 13 Globally, the transportation fuels 

market is a multi-triIlion-dollar one. If any alternative fuel technology captured a mere 

slice of that market, it would captme billions of dollars in profit annually. The market 

demand for transportation fuel is incentive enough to spm competition in the industry. 

Breaking into this market is not a problem of the so-called valley of death where good 

ideas are not able to attract substantial investment. It is a valley of wealth waiting to be 

had. 

Markets adapt to changes in resomce demand and supply through the price mechanism. If 

vehicles powered by natmal gas, electricity, or biofuel became economically competitive 

consumers would respond, and alternative-fuel vehicle and necessary supporting 

infrastructme would be built A common argument for federal support of alternativefuel vehicles is that consumers will not buy the cars if they have no place to re-charge or 

re-fuel them thus creating a chicken-and-egg problem, but markets overcome the 

chicken-and-egg problem all the time. Diesel cars and diesel pumps and cellular 

telephones and cellular towers are just two examples of investments that expanded 

rapidly. Good economic ideas will do that but it will not be as the result of a govenunent 

program or a politician in Washington thinking he knows which is the most promising 

altemative to a gas-powered car. 

The Fundamental Problems with DOE Loans and Loan Guarantees 

12 United States Department of Energy, ATVM. !.lttl!§iLltlQ.energy.gov/7page id;43 (accessed April 22. 

2013). 

\3 Janice Podsada, "Americans Spent Record Swn on Gasoline in 2011," January 3,2012. 

http://articles.couranl.coml2012-01-03Ibusinesslhc-gasoline-l'ecord-spending-2011-20111230_1_tomkloza-oil·price-infonnation-service-crude (accessed April 22, 2013). 

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Fisker Automotive provides another critical piece of evidence as to why the Department 

of Energy should not be attempting to serve as a venture capitalist. Both the loan and 

loan guarantee programs are some of the most pernicious ways that governments distort 

markets and harm American families and businesses alike. DOE loans and loan 

guarantees: 

• Reduce Capital Availability for Less Politically Favored Companies: As 

anyone looking to start a business or buy a home in recent years can attest, 

acquiring a loan can be very difficult. DOE loans and loan guarantees make that 

process even more difficult because the government essentially pulls capital out 

ofthose limited reserves and dictates who should receive it. While sure-bet 

companies can still get a loan, those that are more on the margin may lose that 

opportunity. 

• Reduce Americans' Access to Technologies and Services: Capital is in limited 

supply. A dollar loaned to a government-backed project will not be available for 

some other project. This means that the higher-risk, higher-reward companies that 

drive innovation and bring new services and teclmologies into the marketplace 

may not get support, while companies with strong political connections or those 

that produce something that politicians want do. 

• Skew the Rules of Free Enterprise: The more government participates in the 

market as an investor, the greater its temptation to shape the mles to advance its 

own interests. Further, because they are not risking their own money, politicians 

and bureaucrats will bear almost no responsibility for the outcome of the 

investment. This allows them to take credit when an investment succeeds and 

deny blame when it fails. 

• Beget Corruption and Cronyism: Programs such as loan guarantees create a 

symbiotic relationship between government officials and specific businesses. In 

essence, both have very strong incentives for the other to be successful. In this 

relationship, the politician helps the business gain market advantage, and the 

successful business helps the politician advance his political agenda. The result is, 

at best, a brand of cronyism where businesses develop strong relationships with 

public officials to ensure that public policies support their economic interests. 

By attempting to force government-developed teclmologies into tIle market, the 

government diminishes the role of the entrepreneur and crowds out private-sector 

investment. This practice of the government picking wiImers and losers denies energy 

teclmologies the opportunity to compete in the marketplace, which is the only proven 

way to develop market-viable products. When tIle government attempts to drive 

teclmological commercialization, it circumvents this critical process. 

Fisker is not the first Department of Energy investment failure and it very likely that it 

will not be the last. More stringent oversight and risk assessment may marginally 

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improve the protection of the taxpayers' money, but the best option is to get rid ofthe 

loan program altogether and allow free-market competition to drive energy investment. 

This protects taxpayer money and will ensure that only the most promising new energy 

technologies move forward. 

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7 
86 

Mr. JORDAN. Thank you both. 

Ms. Lipman, right to Mr. Loris’s point, look, we want all the 

great things you were talking about, we want this technology, we 

want advanced new things happening. We are America, a Country 

of innovation and entrepreneurs and everything else. But Mr. Loris 

makes a perfect point. Not only in this situation with Fisker did 

taxpayers lose $200 million, but the fact that we have the program 

jeopardizes all those, if you heard Mr. Whitcombe, 150 other applicants who didn’t get the dollars, and now the investment capital, 

the private investment capital that is out there, they are saying, 

you know what, I think it is better to put my money behind some 

company that has the implicit, well, not implicit in this case, the 

formal backing of the taxpayer, of the United States Government. 

So of those 150 companies, and a whole bunch of others who 

didn’t apply who are out there, they may get crowded out, they 

may not get the investment they need where that next big idea is 

just waiting to bloom if they can just get the help. So not only do 

we have taxpayer money getting wasted, we, I think, very logically 

have a bunch of companies who might otherwise get investment 

from the private sector but don’t. 

Ms. LIPMAN. Well, I think there are a number of responses to 

that. One is I agree with Mr. Loris that it is not the success of individual projects; it is the success of the policy. And I think while, 

clearly, the program is not perfect, no program would be; it is in 

the process of evolution always, as all of our Government programs 

should be, the question is not what is the risk to individual 

projects, but what is the risk to the Nation if we fail to move faster, 

further, for the longer term. 

Mr. JORDAN. Well, you are making my point. There might be one 

of those 150 companies who didn’t get help who, if the Government 

is not involved in this, some private investors say, you know what, 

I like that idea. That is the next Thomas Edison there; I am going 

to put private money there. But you know what? Think about it, 

Nissan got money. Nissan is a successful company. So there are investors out there saying I can put my money with this entrepreneur, it looks good, but maybe I will go with the big company 

that has Government backing; I will put money there and get the 

return. You understand? 

Ms. LIPMAN. I do. The question isn’t whether or not we are going 

to move into these next technologies. And the question isn’t whether or not there is going to be investment. The question is whether 

there is going to be investment in American manufactured technology; whether that investment is going to be made here, whether 

the innovation that comes out of our labs and out of our private 

companies is going to turn into jobs in America. 

And we have tested not doing anything on that. We have tested 

it for the last three decades in which we have seen a decline in 

America’s manufacturing share in this critical engine of innovation 

and growth, and what we have seen in the converse in the last few 

years, and the ATVM has been one of the key pieces there, there 

has been a lot of talk today, if I could finish for a moment. 

Mr. JORDAN. I just have a minute. 

Ms. LIPMAN. About the creditworthiness of these loans. When the 

ATVM was, not when it was originally authorized, but when the 

87 

money was, I guess the money was actually authorized by Congress 

the end of 2008, that was a time in which no auto company, let 

alone an innovative one, could have gotten money from anywhere 

in the private sector. It was very dark times for investment in advanced technology. And these are precisely the times and the 

places and, going forward, the technologies we need to attract investment here. 

Mr. JORDAN. I want to get Mr. Loris’s comment because, frankly, 

my understanding, in Ohio manufacturing jobs are starting to come 

back. 

Ms. LIPMAN. Absolutely. 

Mr. JORDAN. Particularly in the energy area. We just added steel 

jobs in Youngstown, Ohio, and that hasn’t happened in 50 years because of technology developed in the private sector, particularly in 

the energy business, that is being used on private land all over the 

State, the eastern part of our State. 

Mr. Loris, I will give you a last time to comment, then I will go 

to our ranking member. 

Mr. LORIS. And there is a success story where we see the market 

is working, that we have access to our energy resources and, as a 

result, you have chemical companies wanting to come back to the 

U.S., you have manufacturers who want to rebuild old shuttered 

steel towns, and you are saving consumers a lot of money through 

lower energy prices. 

But I would like to rebut that last point. Fisker was formed in August 2007 and it raised $94 million before DOE even got into the 

loan process. If they thought this was a profitable company or successful, they could continue to go through rounds of venture capitalism. But Fisker raised another $57 million between the time 

DOE approved the loan and closed the loan in April of 2010. After 

DOE closed the loan, Fisker raised over $1 billion in various 

rounds of VC funding, so this just speaks to my point that investors can significantly hedge their bets once the Department of Energy gets involved, and if private investors and VCs think this is 

such a good idea, they should be able to take that risk and reap 

the reward on their own. 

Mr. JORDAN. Great point. 

The gentleman from Pennsylvania is recognized. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

Mr. Loris, I have some questions for you. Thank you for coming 

here today and expressing your opinions. Now, you have said your 

opinions are not necessarily those of The Heritage Foundation, is 

that correct? 

Mr. LORIS. That is correct. 

Mr. CARTWRIGHT. You are currently the Herbert and Joyce Morgan Fellow at The Heritage Foundation? 

Mr. LORIS. Yes. 

Mr. CARTWRIGHT. Does that make you an employee there? 

Mr. LORIS. It does. 

Mr. CARTWRIGHT. Okay. But my impression is that you are saying that your opinions are not those of The Heritage Foundation? 

Mr. LORIS. That is correct. 

Mr. CARTWRIGHT. Now, my copy of your opinions is printed on 

Heritage Foundation stationery. Is that what you meant to do? 

88 

Mr. LORIS. That I did mean to do, yes. 

Mr. CARTWRIGHT. Okay. And just so we are clear, did you get 

anybody at The Heritage Foundation, your employer, to review 

your opinions before you expressed them here today? 

Mr. LORIS. I did. 

Mr. CARTWRIGHT. Okay. So they are aware that you are here giving your opinions before this panel, are they? 

Mr. LORIS. They are. 

Mr. CARTWRIGHT. Okay. Now, my question is about the Energy 

Independence and Security Act of 2007. 

Mr. JORDAN. Would the gentleman yield for one second? 

Mr. CARTWRIGHT. Certainly. 

Mr. JORDAN. I just want to make a point. It shouldn’t be a surprise that The Heritage Foundation is supporting free market principles. 

Mr. CARTWRIGHT. We are not sure what they are supporting here 

today. We only have Mr. Loris. 

Mr. Loris, I read your testimony and you spend a considerable 

amount of ink on the Fisker company. You mention Tesla, but you 

don’t mention Ford anywhere in your testimony, do you? 

Mr. LORIS. No, I do not. 

Mr. CARTWRIGHT. Okay. And then you move from an examination 

of Fisker and then you move into a criticism that basically says 

DOE loans and loan guarantees reduce capital available, reduce 

Americans’ access to technology, skew the rules of free enterprise, 

beget corruption and cronyism. It seems to me you sort of morph 

into a general attack on the Energy Independence and Security Act 

of 2007 creation of these loan guarantee programs, correct? 

Mr. LORIS. That is correct. 

Mr. CARTWRIGHT. Okay. At the time, in 2007, when they were 

signed into law by our President of the United States, George W. 

Bush, did you express your displeasure or your disagreement with 

President George W. Bush at the time? 

Mr. LORIS. I was not working for Heritage Foundation at the 

time, but there is past research that we heavily criticized that bill 

and thought it would be bad for consumers and energy consumers. 

Mr. CARTWRIGHT. You have correctly anticipated my next question. Even though you were not yet employed by The Heritage 

Foundation in 2007, it is the case that The Heritage Foundation 

itself was critical of this bill that President Bush signed into law 

in 2007. 

Mr. LORIS. That is correct. 

Mr. CARTWRIGHT. So it might be a fair assumption to say that 

they agree with your testimony here today, the opinions you have 

expressed in front of this panel, is that right? 

Mr. LORIS. That is correct. 

Mr. CARTWRIGHT. So my question is if what you do is you examine the experience at Fisker and then you ramp that into your general opinions and conclusions about the validity and the appropriateness of the Energy Independence and Security Act of 2007 

and these loan program guarantees, why didn’t you include Ford 

Motor Company, why didn’t you include Nissan? We have seen 

today, in the hearing before this panel, that the vast, the vast majority of the money that was invested by the American public in 

89 

this alternative energy endeavor went to those other companies; 

not to this Fisker company, but to the other companies that are actually making a go of it and it is a 98 percent, were you in the 

room when we talked about the 98 percent? 

Mr. LORIS. I was. 

Mr. CARTWRIGHT. A 98 percent successful enterprise, these Federally guaranteed loans, so that we could bring our United States 

up to speed with modern technology in the automotive industry. 

You were in the room when we heard the 98 percent figure? 

Mr. LORIS. Yes, sir. 

Mr. CARTWRIGHT. You don’t mention that anywhere in your testimony, either in writing on The Heritage Foundation stationery or 

verbally here in the hearing room, am I correct in that? 

Mr. LORIS. I did broadly speak about whether or not these programs or these projects are successful. That doesn’t make the policy a success. You have companies like Ford and Nissan; they are 

huge companies, they are big boys. They should be able to make 

these investments on their own; they should be able to take out 

loans from banks and do it that way, rather than relying on the 

Government’s crutch. It is not the ATVM program. 

Mr. CARTWRIGHT. Mr. Loris, is it your opinion that the Federal 

Government must now go back and confiscate and take back the 

DOE money from the Ford plant in Lima, Ohio right now, irrespective of how well Ford is doing with the program? 

Mr. LORIS. No. I think they should remove the loans going forward on any availability of that ATVM program to administer the 

loans. 

Mr. CARTWRIGHT. Again, I thank you for coming here with your 

opinions, Mr. Loris. 

Mr. LORIS. Thank you. 

Mr. JORDAN. You get off easy. 

We want to thank you both for being here. I appreciate you staying around for the first panel and your willingness to testify here 

on our second panel. 

We are adjourned. 

[Whereupon, at 5:56 p.m., the subcommittee was adjourned.] 

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The Honorabk Jim Jordan 

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WilShirigtoii;D.C:- 205 15-61 'l3 . 

April 17, 2013 

Re: Subcommittee Letter of April 9, 2013 

Dear Chairman Jordan: 

I represent Fisker Automotive and write in response to your April 9, 2013 letters to Mr. 

Tony Posawatz and Mr. Bernhard Koehler requesting the testimony of both senior executives at 

a Subcommittee hearing on April 24, 2013. 

Fisker Automotive appreciates the Subcommittee's interest in examining the support 

offered to the company in the form of loans from the Department of Energy through the 

Department's Advanced Technology Vehicles Manufacturing (ATVM) loan program. The 

company has coopemted with the Oversight and Government Reform Committee's investigation 

of this matter since it began last summer - when it produced more than 1,500 pages of 

documents and other materials pursuant to the Committee's request - and it intends to continue 

to coopemte with you. 

Unfortunately, neither Mr. Posawatz - the current Chief Executive Officer of the 

company, nor Mr. Koehler - the Chief Executive Officer for Europe and the Middle East, are 

available to testify on April 24th. Both are intimately involved in critical day-to-day efforts to 

find a path forward for the company in the United States and Europe. Appearing at an April 24th 

hearing, with only two weeks notice and at such a critical time for the company, would 

substantially hinder its ongoing efforts to obtain fmancing, to continue negotiations with 

stakeholders and other interested parties, and to address the challenges arising from the 

company's current financial position. All of these efforts are intended to maximize value for 

stakeholders such as the Department of Energy and, of critical importance, the American 

taxpayer. 

Hong Kong London Los Angeles Munich New York Palo Alto San Francisco Shanghai 

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The Honorable Jim Jordan 

Aprill7,2013 

Page 2 

KIRKLAND &. ELLIS LLP 

If the Subcommittee is willing to undertake a reasonable delay of the hearing currently 

scheduled for April 24th, Fisker Automotive commits to work with you and provide an 

appropriate witness for a hearing on a new date chosen by the Subcommittee. Thank you for 

your consideration of this request. 

Please do not hesitate to contact me at (202) 879-5260 if I can be of further assistance. 

Sincerely, 

~:.!u~JL~ 

cc: The Honorable Matthew Cartwright, Ranking Minority Member 

Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs 

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Evans, Denise 

From: 

Sent: 

To: 

Subject: 

--Original MeSllageShlkeny, Ann IAnn.Shikany@Hq.Doe.Goy]on behalf of SilYer, Jonalhan 

[Jonathan.SllYer@hq.doe.gov] 

Thursday, June 23,20111:63 PM 

'jonalhan@jonalhansllYer.nel' 

FW:back? 

From: John Doerr (rnaHIo:jdoerr@kpcb.com] 

sent: Thursday, June 23,2011 8:61 AM 

To: Silver, Jonatlian 

Subject: back? 

Are you beck In office? Please suggest a lime to talk. 

John