WASHINGTON (AP) -- The Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the financing after questions were raised about the company's statements, newly released documents show.
An Energy Department official said in a June 2010 email that Fisker's bid to draw on the federal loan may be jeopardized for failure to meet goals established by the Energy Department.
Despite that warning, Fisker continued to receive money until June 2011, when the Energy Department halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including launch of the company's signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.
The December 2011 credit report said "DOE staff asked questions about the delays" in the launch of the Karma "and received varied and incomplete explanations," leading to the suspension of the loan. Fisker had received a total of $192 million of the $529 million loan before it was suspended.
In the June 2010 email, Sandra Claghorn, an official in the Energy Department loan program office, wrote that Fisker "may be in limbo due to a lack of compliance with financial covenants" set up by the department to protect taxpayers in the event of default. Another document, from April 2010, listed milestones that Fisker had not yet met.
Aoife McCarthy, a spokeswoman for the Energy Department, said the June 2010 email was taken out of context.
"The document shows that one person at a meeting discussed the possibility that Fisker might not meet a financial commitment" required by the Energy Department, McCarthy said in an email. The department received the needed certification five days later and subsequently made the loan payment, she said.
The documents were released Wednesday by the House Oversight and Government Reform committee, which is looking into the federal loan to the troubled car maker. Continuing financial and production problems has led to the lay-off of three-fourths of its workers.
White House spokesman Jay Carney accused congressional Republicans of leaking the documents in an effort to embarrass the Obama administration.
"The committee's efforts to stoke false controversy by selectively leaking a few out-of-context documents just do not stand up to scrutiny," Carney said Wednesday.
The potential loss of $171 million would be largest loss of federal loan money since the 2011 failure of solar panel maker Solyndra. That company's collapse, which came despite a $528 million loan from the Energy Department, has triggered criticism of the Obama administration's green energy program. Fisker received money from a similar loan program started under the Bush administration.
The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the car maker for the 2009 loan. A payment from Fisker was due Monday but was not made, an Energy Department official said.
A top Energy Department official said the department acted "decisively" to protect taxpayers' interests since Fisker's financial woes became clear nearly two years ago. Nicholas Whitcombe, former acting director of the car loan program, said the department stopped payments to Fisker in June 2011 after the company failed to meet 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," Whitcombe told the committee. The Energy Department is "committed to ensuring that the taxpayers' interests are protected to the maximum extent possible," he added.
But Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it is hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money.
"The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face," said Jordan, R-Ohio.
Jordan called the loan program "one of the most disastrously mismanaged and corrupt programs in U.S. history," a claim committee Democrats scoffed at.
Rep. Elijah Cummings, D-Md., said the loan program, which has benefited car companies such as Ford, Nissan and Tesla, was exceeding expectations. The Fisker loan represents less than 2 percent of the car-loan program, Cummings and other Democrats said.
"There is no evidence that the (Energy) department did anything wrong with this loan," Cummings said. "No evidence that politics played any part in the award to Fisker."
Henrik Fisker, the company's namesake and founder, testified Wednesday that he was proud of the company's "cutting edge technology," which he said could "pave the way for a new generation of American car manufacturing."
Fisker, who resigned as board chairman in March, disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.
"At that time, we already had significant financial backing from private investors," Fisker said. In all, the company received more than $1 billion in private financing, he said.
The company met initial milestones set up by the Energy Department before informing the department that it would not meet future goals on time, Fisker said. He denied that any political influence was used to obtain the loan or in negotiations over its terms.
"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 Energy," Fisker said.
Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.
Fisker said the company was hurt badly by the 2008 recession and by the bankruptcy of A123 Systems, a Massachusetts company hired by Fisker to make batteries for the Karma. A bankruptcy judge granted Fisker $15 million in a claim against A123 for breach of warranty, a fraction of Fisker's initial claim.
Fisker has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.
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