Spending on Empty — Hearing, House of Representatives (April 18, 2023)
Summary
Transcript of the hearing Spending on Empty: How the Biden Administration’s Unprecedented Spending Increased Risk of Waste, Fraud, and Abuse at the Department of Energy, before the Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs of the Committee on Oversight and Accountability, on April 18, 2023 (Serial No. 118–21). Hon. Pat Fallon, Chairman of the Subcommittee, presided. Witnesses were The Honorable Teri L. Donaldson, Inspector General, Department of Energy, and Dr. Kathleen Hogan, Principal Deputy Under Secretary for Infrastructure. In the opening statement, Mr. Fallon refers to the alleged COVID relief spending and says hundreds of billions of dollars went to criminals and fraudsters on too many occasions.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Spending on Empty — Hearing, House of Representatives (April 18, 2023).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-118hhrg51893-spending-on-empty-how-the-biden-administration-s-unp-35ff57f654/
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SPENDING ON EMPTY: HOW THE BIDEN
ADMINISTRATION’S UNPRECEDENTED
SPENDING INCREASED RISK OF
WASTE, FRAUD, AND ABUSE AT
THE DEPARTMENT OF ENERGY
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY
POLICY, AND REGULATORY AFFAIRS
OF THE
COMMITTEE ON OVERSIGHT AND
ACCOUNTABILITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
APRIL 18, 2023
Serial No. 118–21
Printed for the use of the Committee on Oversight and Accountability
(
Available on: govinfo.gov,
oversight.house.gov or
docs.house.gov
U.S. GOVERNMENT PUBLISHING OFFICE
51–893 PDF WASHINGTON : 2023
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
JAMES COMER, Kentucky, Chairman
JIM JORDAN, Ohio JAMIE RASKIN, Maryland, Ranking Minority
MIKE TURNER, Ohio Member
PAUL GOSAR, Arizona ELEANOR HOLMES NORTON, District of
VIRGINIA FOXX, North Carolina Columbia
GLENN GROTHMAN, Wisconsin STEPHEN F. LYNCH, Massachusetts
GARY PALMER, Alabama GERALD E. CONNOLLY, Virginia
CLAY HIGGINS, Louisiana RAJA KRISHNAMOORTHI, Illinois
PETE SESSIONS, Texas RO KHANNA, California
ANDY BIGGS, Arizona KWEISI MFUME, Maryland
NANCY MACE, South Carolina ALEXANDRIA OCASIO-CORTEZ, New York
JAKE LATURNER, Kansas KATIE PORTER, California
PAT FALLON, Texas CORI BUSH, Missouri
BYRON DONALDS, Florida SHONTEL BROWN, Ohio
KELLY ARMSTRONG, North Dakota JIMMY GOMEZ, California
SCOTT PERRY, Pennsylvania MELANIE STANSBURY, New Mexico
WILLIAM TIMMONS, South Carolina ROBERT GARCIA, California
TIM BURCHETT, Tennessee MAXWELL FROST, Florida
MARJORIE TAYLOR GREENE, Georgia BECCA BALINT, Vermont
LISA MCCLAIN, Michigan SUMMER LEE, Pennsylvania
LAUREN BOEBERT, Colorado GREG CASAR, Texas
RUSSELL FRY, South Carolina JASMINE CROCKETT, Texas
ANNA PAULINA LUNA, Florida DAN GOLDMAN, New York
CHUCK EDWARDS, North Carolina JARED MOSKOWITZ, Florida
NICK LANGWORTHY, New York
ERIC BURLISON, Missouri
MARK MARIN, Staff Director
JESSICA DONLON, Deputy Staff Director and General Counsel
DAVID EHMEN, Counsel
JEANNE KUEHL, Senior Professional Staff
MALLORY COGAR, Deputy Director of Operations and Chief Clerk
CONTACT NUMBER: 202-225-5074
JULIE TAGEN, Minority Staff Director
CONTACT NUMBER: 202-225-5051
SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY POLICY, AND REGULATORY
AFFAIRS
PAT FALLON, Texas, Chairman
BYRON DONALDS, Florida CORI BUSH, Missouri, Ranking Minority
SCOTT PERRY, Pennsylvania Member
LISA MCCLAIN, Michigan SHONTEL BROWN, Ohio
LAUREN B OEBERT, Colorado M ELANIE STANSBURY, New Mexico
RUSSELL FRY, South Carolina ELEANOR HOLMES NORTON, District of
ANNA PAULINA LUNA, Florida Columbia
CHUCK EDWARDS, North Carolina RAJA KRISHNAMOORTHI, Illinois
N ICK L ANGWORTHY , New York R KHANNA, California
O
(II)
C O N T E N T S
Page
Hearing held on April 18, 2023 .............................................................................. 1
WITNESSES
The Honorable Teri L. Donaldson, Inspector General, Department of Energy
Oral Statement ........................................................................................................ 5
Dr. Kathleen Hogan, Principal Deputy Under Secretary for Infrastructure,
Department of Energy
Oral Statement ........................................................................................................ 6
Opening statements and the prepared statements for the witnesses are avail-
able in the U.S. House of Representatives Repository at: docs.house.gov.
INDEX OF DOCUMENTS
* Questions for the Record: to Dr. Hogan; submitted by Rep. Perry.
* Questions for the Record: to Dr. Hogan; submitted by Rep. Donalds.
* Questions for the Record: to Hon. Donaldson; submitted by Rep. Perry.
The documents listed above are available at: docs.house.gov.
(III)
SPENDING ON EMPTY: HOW THE BIDEN
ADMINISTRATION’S UNPRECEDENTED
SPENDING INCREASED RISK OF
WASTE, FRAUD, AND ABUSE AT
THE DEPARTMENT OF ENERGY
Tuesday, April 18, 2023
HOUSE OF REPRESENTATIVES
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY
POLICY, AND REGULATORY AFFAIRS
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:22 p.m., in room
2154, Rayburn House Office Building, Hon. Pat Fallon [Chairman
of the Subcommittee] presiding.
Present: Representatives Fallon, Donalds, Perry, Fry, Luna,
Edwards, Langworthy, Brown, Stansbury, and Norton.
Mr. FALLON. This hearing on the Subcommittee on Economic
Growth, Energy Policy, and Regulatory Affairs will come to order.
We want to welcome everyone.
Without objection, the Chair may declare a recess at any time.
I recognize myself for the purpose of making an opening state-
ment.
The Biden Administration’s rampant spending spree has put
American taxpayer dollars at even greater risk of waste, fraud, and
abuse, which obviously none of us want. We just have to take a
look at the alleged COVID relief spending, hundreds of billions of
dollars just shoved out the door into the hands of, on too many oc-
casions, criminals and fraudsters. This Committee has and will
continue to conduct oversight over that money. That is our job, and
that is what we were all elected to do.
Today’s Subcommittee hearing will examine the Department of
Energy’s budget and spending. According to the DOE’s Inspector
General, the Inflation Reduction Act, the Infrastructure Investment
and Jobs Act, and the CHIPS and Science Act have created enor-
mous challenges at the Department. In fact, the Inspector General
said that these are ‘‘historic and unprecedented times’’ at the De-
partment in light of the massive spending.
President Biden and congressional Democrats’ spending spree
grew the Department’s budget—get this—from $45 billion in 2022,
exactly 45.3 billion, to over $100 billion in just one year in 2023.
You know, it has doubled, historic and unprecedented times, abso-
(1)
2
lutely. Under the Inflation Reduction Act, the Infrastructure In-
vestment and Jobs Act alone, Democrats directed the Department
to distribute $336 billion in loans on extremely tight deadlines, and
that is critical. Under one program alone, the Department will
need to distribute approximately $32 million per day on average in
loans to meet the September 30, 2026 deadline. The speed and
complexity of the review process raises concerns about whether the
Department can successfully oversee these funds.
The IG also identified several common risks within the Depart-
ment programs, which will get worse under the new spending and
loan programs. These risks include, but aren’t limited to, the ineffi-
cient oversight of projects at the transaction level, inadequate in-
ternal controls at both the Federal and recipient levels, potential
conflicts of interest and undue influence and compliance problems
with contract and grant terms and conditions. Given these serious
challenges, Congress must evaluate the safeguards in place at the
Department to prevent fraud, waste, and abuse of American tax-
payer dollars.
In a series of reports, the Inspector General highlighted the need
to address waste, fraud, and abuse in the Agency’s Financial As-
sistance Awards, Clean Energy Demonstration Projects, the Loan
Programs Office, and the Weatherization Assistance Program.
Across these programs, the Inspector General highlighted insuffi-
cient staffing as a chief concern. The Department apparently need-
ed to go on a hiring blitz to fill vacancies, and new rules are raising
questions about the qualifications and technical skills of the new
hires who are brand new to the Department. Some of these pro-
grams receiving billions of dollars have not been used in decades,
meaning their oversight personnel are simply not existent. Yet
even while the Department has been filling these vacancies, it has
also been distributing funds. Combine this with the hiring blitz,
with ongoing vacancies and positions intended to oversee these
funds, and we are looking at high risk of disaster.
If that wasn’t enough cause for concern, reports already indicate
funds from the Infrastructure Investment and Jobs Act are going
to, of all places, China. The Department awarded Microvast, a lith-
ium battery company, $200 million of taxpayer money despite the
company’s primary operations taking place not the United States,
not an allied nation, but in China, placing it at serious risk by in-
fluence of the Chinese Communist Party. Congress and the Amer-
ican people must be assured that taxpayer dollars are not going to
entities, of course, owned, operated, or susceptible to control or in-
fluence of the CCP.
Today, we welcome our witnesses from the Department as well
as the Inspector General and look forward to their testimony about
how their offices will ensure that the Department of Energy can
and will be good stewards of taxpayer dollars.
I now recognize the Ranking Member Stansbury for the purpose
of making an opening statement.
Ms. STANSBURY. Thank you, Mr. Chairman, and I want to wel-
come our witnesses who are here with us today. This last Congress,
our congressional Democrats made landmark and generational in-
vestments in infrastructure, clean energy, and domestic manufac-
turing when they enacted the Infrastructure Investment and Jobs
3
Act, the Inflation Reduction Act, and the CHIPS and Science Act.
Our extreme colleagues on the right want to cast these laws as
wasteful, despite the extraordinary benefits they will provide for
the American people and the planet, in order to curry brownie
points with special interests and climate deniers. Let me be clear.
The investments that we are making through these bills will lower
costs, create jobs for millions of Americans, increase domestic man-
ufacturing and energy production, and combat climate change.
As Democrats, we are committed to championing positive invest-
ments in domestic energy and manufacturing as well as providing
good, well-paying jobs for all Americans. In fact, the Inflation Re-
duction Act has already catalyzed more than 100,000 clean energy
jobs and led to increased investment by businesses and manufac-
turing across the United States. This includes in the West, in Colo-
rado, where private sector company, CS Wind, plans to expand the
largest wind turbine factory in the world.
In North Carolina, Toyota has invested $2.5 billion in an electric
vehicle battery facility, and Wolfspeed has committed to building
the world’s largest carbide materials factory. In South Carolina,
BMW has announced $1.7 billion to shift to electric vehicle manu-
facturing, and Bosch has announced $260 million in investment in
the production of electric motors. And in Texas, where SK Signet
announced plans to build an electric vehicle charger manufacturing
facility, Tesla is investing $770 million to expand its vehicle fac-
tory, and Air Products and AES announced a combined $4 billion
investment in the future of our energy economy.
As this hearing gavels in just days away from Earth Day, it is
important for us to talk about why these historic investments are
so critical to combating climate change and moving our economy to-
ward a clean energy future. It is absolutely vital that we shift to
clean energy sources. Such efforts are our best chance at avoiding
the most devastating impacts of climate change. That is why Demo-
crats’ investments in the Bipartisan Infrastructure Law and the In-
flation Reduction Act are so significant in helping to pave the way
for the future.
I would also like to point out that investing in our communities
is not a waste. The communities that most need these investments
are the ones that are most likely to suffer from the impacts of cli-
mate change. Roughly $1.8 billion out of $4.5 billion that is slated
for clean energy initiatives in the Inflation Reduction Act will go
to low-income American homes. In addition, the Administration’s
Justice40 Initiative aims to ensure that 40 percent of the benefits
achieved through these investments in climate action and clean en-
ergy will flow to our under-served communities.
We know that the Department of Energy is committed to respon-
sibly stewarding these funds and ensuring that these historic in-
vestments are put to work for the American people and help to
serve our most vulnerable communities. But as we sit here today,
Republicans’ concerns seem to stem from special reports that go
back over a decade when the Department of Energy has already
worked tirelessly to address concerns and to administer these in-
vestments that are so crucial for our climate and clean energy fu-
ture and our national labs in science and technology programs. Our
President is committed to ensuring that these funds are used ap-
4
propriately. And, in fact, the President’s budget for this year in-
cludes almost a 55-percent increase for the Inspector General at
DOE.
When Republicans claim that they are conducting real oversight,
they are focused on programs and agencies that have worked spe-
cifically to fortify against fraud, waste, and abuse with talking
points that literally have very little relationship to reality. The Ad-
ministration has prioritized preventing fraud, waste, and abuse
across the Federal Government and ensuring that the benefits of
the Infrastructure Law, the Inflation Reduction Act, and the
CHIPS Act are no exception. And I look very much forward to hear-
ing from our witnesses today. And with that, Mr. Chair, I yield
back.
Mr. FALLON. Thank you. I am pleased to introduce our two wit-
nesses today. Teri Donaldson served as an Inspector General of the
United States Department of Energy, and Dr. Kathleen Hogan is
the Principal Deputy Under Secretary and Acting Under Secretary
for Infrastructure at the Department of Energy. I look forward to
hearing from each of you this morning, or this afternoon rather, on
this important topic.
Pursuant to Committee Rule 9(g), the witnesses will please stand
and raise your right hands.
Do you solemnly swear or affirm that the testimony that you are
about to give is the truth, the whole truth, and nothing but the
truth, so help you God?
[A chorus of ayes.]
Mr. FALLON. Let the record show that the witnesses all answered
in the affirmative. We appreciate you both being here today and
look forward to your testimony. Let me remind the witnesses that
we have read your written statements and they will appear in full
in the hearing record. Please limit your oral statements to five
minutes.
As a reminder, please press the button on the microphone in
front of you so that it is on, and the Members can hear you. When
you begin to speak, the light in front of you will turn green. After
four minutes, the light will turn yellow, and then the red light will
come on, and that is that time and cue, as you may suspect, to
wrap it up.
I recognize Inspector General Donaldson to please begin her
opening statement.
STATEMENT OF HONORABLE TERI DONALDSON
INSPECTOR GENERAL
U.S. DEPARTMENT OF ENERGY
Ms. DONALDSON. Thank you, Chairman Fallon and Ranking
Member Stansbury, for inviting me to testify today and talk a little
bit about the types of fraud, waste, and abuse that we might en-
counter given some of the risk factors within the landscape at the
Department of Energy.
The Chairman mentioned probably the most significant risk fac-
tor, which is sheer volume of dollars. So, in Fiscal Year 2022, the
budget for the Department was a little over $44 billion. Under-
neath IIJA, IRA, CHIPS Act, and the legislation giving a billion
dollars to Puerto Rico for solar, that number is now at $478 billion
5
when you include the loan-related dollars, so from $44 to $478 is
a really big hop. Also, these statutes created 71 brand new pro-
grams, which is a staggering number.
This is, by the way, the largest amount of money under all of
these bills did, in fact, go collectively to the Department of Energy,
and this is the largest number of new programs collectively, so
there is a lot going on in Dr. Hogan’s world right now just with this
huge volume of very important issues being worked on. New pro-
grams do bring particular risks as the Chairman mentioned. By
definition, you are utilizing newly designed and untested internal
controls, so that is a big risk factor. Also, a lot of the money in this
situation will go to states, local governments, and tribes, and it is
not at all clear whether states, local governments, and tribes are
ready to take it.
So, there are readiness assessments being done, and there are
issues associated with that. One of their questions is how much of
the money are they allowed to use to conduct oversight. So, there
are many questions being asked there and those are very impor-
tant. You do not, by virtue of granting money to others, remove the
Federal nature of the money, so the risks just travel right along
with it.
I will also comment briefly on the lack of funding for Department
oversight, you know. As all of you know, the Department is the
front line of defense. IIJA awarded only three percent for adminis-
trative costs, a little more flexibility under IRA, which I think was
really good news but administrative costs focused primarily on
moving the money out the door to its intended use. Oversight is a
small part of that. Oversight is making sure that the dollars actu-
ally landed where Congress wanted them to land, some of the im-
portant projects mentioned by Congresswoman Stansbury, so it is
really important. It is that look in the rearview mirror to make
sure the dollars were delivered where they were supposed to go.
I will also quickly point out one of the most, sort of obvious, risk
factors in this package was that my shop, the Office of the Inspec-
tor General, was woefully under-funded in all four bills. So, in the
CHIPS Act, the Office of the Inspector General received zero. The
$1 billion appropriation for solar in Puerto Rico, my office received
zero. In IRA and IIJA, we did receive some amount of money, but
compared to the other inspectors general whose agencies received
money, ours was the tiniest fraction of that, and this is really im-
portant.
And I appreciate that the President has included a bump up, you
know, in his proposed budget in recognition of this. It is still going
to leave a shortfall that is enormous in terms of my budget, which
allows me to conduct audits, inspections, and evaluations. So, I al-
ways say there is no substitute. You can do a lot of planning, a lot
of coordinating with others, but there is no substitute for having
the people and the technology to do those targeted projects that
allow you to find where the system is breaking or broken, and
allow you to work on those big fraud cases that we all know are
coming just because this is a lot of money moving fast. But we are
trying to work as hard as we can on the front end to minimize that.
So, quickly, I will mention what I think is the most important
tool in the tool bag. In addition to people, I mentioned technology.
6
Data analytics is a gift to the world of inspectors general and a gift
to Federal agencies, that if they properly utilize it, can be on the
front end of oversight and prevent a lot of the fraud, waste, and
abuse. So, data analytics is something that Congress has been
heavily endorsing since 2015 with the Fraud Reduction and Data
Analytics Act; again, in 2018, Foundations of Evidence Based Pol-
icymaking Act; Payment Integrity Act 2019. Those are all very im-
portant pieces of legislation where the Federal Government has
recognized you have to acquire and scrub quality data in order to
have data analytics really work for you.
I am looking forward to your questions. Thank you very much.
Mr. FALLON. Thank you. The Chair now recognizes Dr. Hogan,
and please begin your opening statement.
STATEMENT OF KATHLEEN HOGAN
PRINCIPAL DEPUTY UNDER SECRETARY AND
ACTING UNDER SECRETARY FOR INFRASTRUCTURE
U.S. DEPARTMENT OF ENERGY
Ms. HOGAN. Chairman Fallon and distinguished Members of the
Subcommittee, thank you for this opportunity to provide an update
on the Department of Energy’s efforts to safeguard taxpayer dollars
in the implementation of the Infrastructure Investment and Jobs
Act and the Inflation Reduction Act, known as IIJA and IRA.
So, IIJA and IRA really are truly historic investments in renew-
ing American infrastructure and supporting American energy secu-
rity for decades to come. And we at the Department are working
hard to swiftly implement these laws so we can get these resources
out to communities, in your districts, and in every corner of the
country as quickly as possible. We also acknowledge and respect
that when Congress appropriated these resources, you entrusted
the Department with investments using taxpayer dollars, and we
take this responsibility incredibly seriously. And every day, our
team of experts and professionals are working hard to ensure that
taxpayer dollars provided to us by Congress are being spent effec-
tively, efficiently, and responsibly.
Through the implementation of IIJA and IRA, we are striving to
lower energy bills for American households, improve energy reli-
ability and security, and ensure that America is positioned to lead
the world in manufacturing the energy technologies of the future.
And the Department appreciates the passion and interest of Mem-
bers on both sides of the aisle in your efforts to make sure these
investments reach your districts. We at the Department are happy
to continue to work with Congress and provide information and up-
dates as we continue to implement these laws thoughtfully and re-
sponsibly.
You know, beginning in January 2022, very shortly after the
IIJA was signed into law, our team began engaging with the DOE
Office of Inspector General on behalf of and in coordination with
the program offices responsible for implementing IIJA. We sought
then, as we do now, to better understand how DOE can proactively
improve its oversight of this funding. And over the past 15 months,
the Office of the Under Secretary has coordinated 27 meetings with
the OIG and DOE program officials to discuss program design and
implementation. These meetings are designed to provide the oppor-
7
tunity for an engaged, open, and transparent conversation about
program design, risk mitigation strategies, best practices, and les-
sons learned. And, you know, the topics of discussion have ranged
from DOE’s approach to Build America Buy America requirements
to how specific provisions are being implemented.
From the very start, the Office of the Under Secretary for Infra-
structure and program officials across the Department have dem-
onstrated a thorough transparency with our Inspector General with
regard to our plans and activities. In turn, the Office of the Under
Secretary has really gained substantial insights from our OIG on
what trends are now being seen with respect to recent investiga-
tions and reports, the latest scams and methods that criminals are
using to defraud the Government, and common mistakes that fund-
ing recipients make. And with this knowledge, we are better posi-
tioned to maximize the impact of this funding and reduce fraud,
waste, and abuse. We have also shared with the OIG the critical
process improvements the Department has made over the last dec-
ade across multiple program offices to strengthen our protections
and mitigate risks associated with our financial assistance and
loan guarantee programs.
The Department truly appreciates the OIG’s perspective consid-
erations for the implementation of the IIJA, which did come in the
form of a number of special reports last year. While these are not
the end products of the typical audit process, they contain and col-
lect helpful historical context and guidance on best practices. You
know, one example, one key concern the Inspector General has
highlighted in the 2022 reports is about adequate staffing at the
Department and the need to provide the necessary oversight of
funding programs and projects. You know, we have been focused on
hiring a sufficient staff from day one with a particular focus on
project and program oversight specialists, grant management and
contracting specialists, and financial and audit oversight staff to re-
sponsibly oversee the significant investment Congress has made.
And as we continue to do this work, we remain steadfast in our
commitment to be responsible stewards of taxpayer dollars and will
continue to take proactive steps as necessary to prevent fraud,
waste, and abuse as we really work to deliver the benefits that this
money can do for the future of the country.
And we really look forward to continue our work with you and
thank you for the opportunity to be here, and we look forward to
your questions.
Mr. FALLON. Thank you. I now recognize myself for five minutes
of questions.
IG Donaldson, in your report titled, ‘‘Management Challenges at
the Department of Energy, Fiscal Year 2023,’’ you warned about a
greatly increased risk of fraud, waste, and mismanagement given
the massive spending flowing through the Department. So, you
posed critical questions in your report, one of which you asked ‘do
these spending bills allow the Department to create an appro-
priately sized oversight infrastructure to ensure that these funds
are delivered as Congress intended.’ Can you expound on that?
Ms. DONALDSON. I can. So, historically, the Department—well, it
has always been probably the leanest Federal agency. So, over 90
percent of its dollars historically pass through and end up with its
8
contractors. So, when I came on board in this position, now four
years and change ago, I inherited a lot of reports noting that there
were problems during the audits, and the Department would even
acknowledge they were under-resourced for oversight. So, there
would be a set of requirements. Only some of them were being met
or followed. They simply didn’t have the people, so that was a real
theme that I inherited in this job.
So, when the new bills came along, that was, I think, the very
first question we had talked to the Department of Energy about is,
are you going to be able to make up some of that shortfall with the
allocations in those earmarks for administrative cost? What
amount of that will you actually be able to use for auditors and
oversight? And I think they are still working through those issues.
Mr. FALLON. So, what you are saying is even when they were at
a budget of $46 billion, there were concerns about their oversight
capability?
Ms. DONALDSON. Noted by my predecessors——
Mr. FALLON. OK.
Ms. DONALDSON [continuing]. And GAO.
Mr. FALLON. Now, with double that kind of budget that now ex-
plodes, fair enough to say that that concern would be greatly in-
creased?
Ms. DONALDSON. They will need to dedicate a lot more resources
to oversight. That is correct, sir.
Mr. FALLON. Dr. Hogan, what has the Agency’s response been to
this critical question? Are you satisfied with the response?
Ms. HOGAN. I mean, we are working hard to bring the staff on
that can provide the necessary oversight for these projects. I think,
as we have talked about, many of these programs are new. That
is interesting in that it gives us the opportunity to bring people on
to participate in the design of these programs really before we get
into the project management with the dollars on the street, which
means we can be hiring for where we need to be sort of six months
ahead and bring people on and train them up, which is something
we have been focused on——
Mr. FALLON. OK.
Ms. HOGAN [continuing]. Across the board.
Mr. FALLON. And a second question was asked in the report, do
these massive spending bills allow the Department’s OIG to exe-
cute its statutory obligations to protect these funds. And can you
expound on that, IG Donaldson?
Ms. DONALDSON. Yes, I can. The funding issues I mentioned a
moment ago are really quite remarkable. As I said, without fund-
ing, you simply can’t cover that portfolio. So, even now, we are
shifting some from our existing portfolio, which is hugely important
work—environmental liabilities, pit production—and trying to sort
of squeeze in some resources to have all of these meetings with Dr.
Hogan’s shop and prepare. But that doesn’t mean that we auto-
matically will have the resources to do audits, inspections, and in-
vestigations. We won’t, right? So, we are trying to do the planning
to where when additional money arrives, we will be able to do that.
But right now, we are in a bad situation funding-wise.
Mr. FALLON. Yes. Dr. Hogan, on March 22d, Chairman Comer
and myself wrote to Secretary Granholm seeking documents and
9
information related to IG Donaldson’s report and the DOE funding
announcements. Yesterday, DOE submitted some of these docu-
ments. In one email from May 9, 2022, a staff member in the OIG’s
office stated, ‘‘We believe administrative remedies, such as suspen-
sion and debarment, should be considered by the loan programs of-
fices and instances, such as Solyndra, where company officials pro-
vide misleading information or provide false statements.’’ Has the
DOE implemented this recommendation?
Ms. HOGAN. We implement a full set of mitigation strategies
across the portfolios that we run.
Mr. FALLON. But respectfully, have you implemented this par-
ticular recommendation?
Ms. HOGAN. The Federal Government and DOE have disbarred
entities from being able to participate in Federal business if they
cross certain lines, yes.
Mr. FALLON. So, you are implementing this recommendation?
That is what you are saying? Yes? Yes?
Ms. HOGAN. Yes.
Mr. FALLON. OK. Great. OK. So, you know, as we all know,
Solyndra is the same company that in 2009 received half a billion
dollars from the Energy Department, despite having submitted a
misleading application, laid off its employees, shutdown, and filed
bankruptcy two years after receiving the funds. The last question,
can the Department commit to producing the rest of the documents
that we requested by the end of this week?
Ms. HOGAN. We are working through the document requests that
you have, and we will——
Mr. FALLON. Can you commit to it, though?
Ms. HOGAN. We will get to you as many documents as we can
get as quickly as we can.
Mr. FALLON. We would really appreciate that. It is a pretty sim-
ple request, and that is it. Considering the money involved, I think
it would help us do our oversight job. Thank you very much. The
Chair recognizes the gentlelady from Ohio, Ms. Brown.
Ms. BROWN. Thank you very much. The 117th Congress was one
of the most productive in our Nation’s history. Congressional
Democrats, with the help of some Senate Republicans, sent
groundbreaking legislation to President Biden’s desk, like the Bi-
partisan Infrastructure Law and the CHIPS and Science Act. In
addition, Democrats unilaterally passed what will go down as one
of the most important pieces of legislation in American history: the
Inflation Reduction Act.
These bills make up part of the most expansive, forward think-
ing, and restorative agendas in modern history. Democrats are tak-
ing steps to propel our Nation’s infrastructure decades into the fu-
ture, promoting our strategic and national security interests, as
well as passing the largest-ever investment in our climate. That
means clean jobs and investment. The Inflation Reduction Act has
already led to the creation of 100,000 jobs and, as my colleague
pointed out, billions of dollars in investment by domestic manufac-
turing companies since its passage last year. Meanwhile, the plan
from my colleagues on the other side includes proposing the cut
from the lifesaving programs, like Medicaid, while holding the pay-
10
ment of our Nation’s debt hostage. That right there is backward,
catastrophic, and the Republican agenda.
Now, let us talk about how the Biden Administration is respon-
sibly stewarding taxpayer dollars. In June 2022, the Department of
Energy’s Office of Inspector General issued a report on preventing
fraud, waste, and abuse in the Loan Programs Office. Dr. Hogan,
can you tell us how much of the Department’s budget has actually
increased per year because of IIJA and the IRA?
Ms. HOGAN. Yes. I mean, our budget is substantially larger be-
cause of the IIJA and the Inflation Reduction Act, with $68 billion
coming in through the IIJA and additional $30-plus million coming
in through the Inflation Reduction Act. At the same time, we know
that this is a historic investment in our future for the purpose of,
you know, improving the economic opportunity for our communities
and building jobs. And we don’t view this as a one-year appropria-
tion-type opportunity. It really is a many, many year effort to move
out and help our communities improve their economic opportunity.
So, you know, say it is a 10-year-ish-type opportunity. You can
take the $100 billion that is coming into the Department of Energy
divided by 10. So, it is sort of like a $10 billion average increase
in the budget to the Department. That is not a perfect way to do
it because there are different timelines associated with different
provisions. But that is what we are looking to do, is build the ca-
pacity to work with our applicants and with our communities over
the next decade to truly make the difference that these dollars can
make that Congress has trusted us with.
Ms. BROWN. Thank you so much. Back to the report. Dr. Hogan,
has the Loan Programs Office taken steps to remedy the areas
identified in the special report, and if so when were those reforms
implemented?
Ms. HOGAN. Yes, the Loan Programs Office is a very different of-
fice today than what it was so many years ago. It has been able
to stand up a number—expanded staff, but not just expand its
headcount. It has been able to invest and build out new capabilities
to assess, in a due diligence way, technical risk and business risk
or the program for the projects that it is reviewing, as well as we
have been able to build out any number of additional review capa-
bilities within the Agency and across agencies, bringing in the ca-
pabilities of our Treasury Department, as an example. So, it is a
very different program today.
Ms. BROWN. And, Dr. Hogan, what are the most significant
changes that you anticipate at the Department of Energy as a re-
sult of the Bipartisan Infrastructure Law and Inflation Reduction
Act?
Ms. HOGAN. I am sorry. What is that?
Ms. BROWN. Most significant changes you anticipate at the De-
partment of Energy?
Ms. HOGAN. You know, the Bipartisan Infrastructure Law and
IRA really have brought to the Department the opportunity to
work with our communities and build out manufacturing, and help
just capitalize on what is going to be a major opportunity to build
jobs and be global leaders in the manufacturing that will go with
a clean energy economy. So, I think——
Mr. FALLON. The gentlelady’s time has expired.
11
Ms. BROWN. Thank you.
Mr. FALLON. Thank you. The Chair now recognizes gentleman
from South Carolina, Mr. Fry.
Mr. FRY. Thank you, Mr. Chairman, for having this hearing
today, and thank you to both of our witnesses for being here.
Thanks to President Biden’s tremendous spending spree, the
DOE has seen a massive budget growth just this year alone. I
think my biggest concern and what we echoed, Inspector General,
is that, is the Department ready to handle that? The Infrastructure
Investment and Jobs Act and the Inflation Reduction Act gave the
Department of Energy $100 billion in appropriated funds, $336 bil-
lion in loan authorizations, and $30 billion from the CHIPS and
Sciences Act. Let us take a closer look at what these chunks of
money do.
And the Inflation Reduction Act included $9 billion for home en-
ergy rebates and appliance upgrades, meaning the Federal Govern-
ment will pay you $840 just to install an electric stove and up to
$14,000 for high efficiency electric home rebates. The Infrastruc-
ture Investments and Jobs Act sets up an additional, as we talked
about, dozens of programs. The CHIPS Act includes $250 million
for a new carbon material science. This money doesn’t grow on
trees. It is coming straight from the pockets of hardworking Ameri-
cans.
So, Dr. Hogan, I want to turn to you. Given the speed at which
this was passed and given the OIG report, do DOE employees face
significant pressure from this Administration to exhaust the funds
now available under the IIJA and the IRA?
Ms. HOGAN. We are working hard to balance the urgency that we
think it is important to get these resources out on the street and
benefit people. At the same time, we are balancing that with what
we think we need to do to do it right. So, do we feel urgency? Yes,
but we are doing it, we believe, with a balance to think through
effective design, think through effective controls, and to engage
many of the so-called co-implementers for these provisions in what
it will take to do it well.
Mr. FRY. Again, I want to turn to permitting real quick. How
does slowdowns in permitting affect your ability to properly dis-
tribute the funds that expires in just a few short years?
Ms. HOGAN. As you know, permitting is a huge issue, and fig-
uring out how to make permitting happen as efficiently and as ef-
fectively and smoothly is something that we are all interested in
doing. At the same time, what we have been doing at the Depart-
ment is engaging with our sister agencies to streamline whatever
it is we have the opportunity to do. And Congress did give us some
additional dollars in the Inflation Reduction Act to bring more re-
sources to bear, so there don’t have to be bottlenecks where we can
just move things through it quickly.
Mr. FRY. Do you anticipate permitting delays because of existing
laws? Is that correct?
Ms. HOGAN. Permitting is an important part of what we need to
do, again, to do project review. So, absolutely, permitting is some-
thing that is part of many of the projects that we will be under-
taking.
12
Mr. FRY. Real quick, Dr. Hogan—I am crunched for time a little
bit—but how do permitting delays impact the U.S. ability to utilize
energy sources in general?
Ms. HOGAN. I mean, that is a complex problem, and we would
be happy to engage with you. I mean, there are certain provisions
and ways to move forward on Federal lands, and there are certain
provisions, you know, on other properties. So, we are doing what
we can to streamline and move efficiently where we can. And
again, we would really appreciate a fulsome conversation about
how to do permitting effectively so that we can get the benefits for
what these dollars offer this country around manufacturing jobs, et
cetera.
Mr. FRY. Dr. Hogan, which DOE programs are most vulnerable
to those permitting delays?
Ms. HOGAN. You know, there are a number of demonstration
projects. There are transmission projects. And the way permitting
intersects with these projects will be different based on where they
are and where they will be constructed.
Mr. FRY. In a briefing with Committee staff, DOE mentioned
interagency conversations with the Department of Interior, as an
example, to address these permitting issues. In your opinion, which
areas of the permitting process are in most need of reform, and has
DOI been receptive to DOE’s permitting concerns?
Ms. HOGAN. We are having very good conversations with our sis-
ter agencies about what it is we can do to streamline permitting,
and, again, we would love to come up and talk with you further
about where we see opportunities to improve these.
Mr. FRY. In your opinion, just right now, what do you think is
in most need of reform from a permitting perspective?
Ms. HOGAN. It is a deeper conversation, so again, we would love
the opportunity to come up and have a deep conversation with you.
Mr. FRY. Thank you, Mr. Chairman. I yield back.
Mr. FALLON. Thank you. The Chair recognizes the gentlelady
from Washington, D.C., Ms. Holmes Norton.
Ms. NORTON. Thank you, Mr. Chairman. Dr. Hogan, in 2022, the
Department of Energy Office of Inspector General issued four spe-
cial reports. These were prospective reports anticipating potential
areas of risk rather than identifying new risk areas. They serve to
highlight for the Agency and for Congress various areas identified
in previous DOE OIG reports. So, Dr. Hogan, how did the Depart-
ment engage with OIG on these reports?
Ms. HOGAN. Yes. So, as you stated, these are reports that our In-
spector General wrote from really pulling together a lot of informa-
tion from past audits that had been developed. So, we did not par-
ticipate in the same way we would with a deep audit where they
would be engaging with us and getting information because the in-
formation body more or less existed.
But what I will say is, we are just so appreciative of the Inspec-
tor General producing these reports for us, and engaging in con-
versations around the findings that they have, and the trends and
patterns that they pulled out from these reports. They are really
so helpful to help us get organized around where to look as a sort
of foundational approach to the controls and systems that we will
be building into our work going forward.
13
Ms. NORTON. Well, Dr. Hogan, three of four special reports iden-
tified insufficient staffing as a risk to the administration of funds
and performance of oversight functions. What steps has the DOE
taken to address this concern and increase staffing?
Ms. HOGAN. So, we are working hard right now to buildup the
staff that we need to deploy so that we can manage the funding
through these two laws and minimize fraud, waste, and abuse. You
know, again, many of the programs that were provided to the De-
partment by Congress are new programs, which means they need
a fair amount of design work up front, stakeholder engagement
work through requests for information. So, we are bringing the
teams on to do that work, and then simultaneously hiring for the
project management staff we will ultimately need when we get to
the point of project management. So, really, we are moving out on
all fronts from a hiring perspective.
Ms. NORTON. Well, Dr. Hogan, how is the DOE addressing cyber-
security threats related to implementation of the Infrastructure In-
vestment and Jobs Act and the Inflation Reduction Act?
Ms. HOGAN. Another really important question. That is some-
thing that is also part and parcel of our daily work. I mean, we
have gone through the bill and IRA provision so that we under-
stand where we believe the greatest cyber risks are. And then we
are engaging in the design of these programs and what will be re-
quired by the applicants to develop cybersecurity plans, that will
be again necessary as part of the whole project. We call that sort
of designing cybersecurity in from the get-go as opposed to trying
to bolt it in at the back end.
Again, we are bringing forth our cyber experts through our Office
of Cybersecurity, Energy Security, and Emergency Response, as
well as our cyber capabilities from our information officer, our chief
information officer, and are working to bring the best of what we
can to these projects.
Ms. NORTON. Well, is it true, Dr. Hogan, that DOE was aware
of these risks described in the special reports prior to their
issuance in 2022 and had already been instituting the OIG’s rec-
ommended reforms in a proactive manner?
Ms. HOGAN. Yes. What is nice about what the OIG brought forth,
is really going back and looking at the many types of issues that
have happened over time and pulling them together in one place.
But some of the, you know, information that was there, like around
the weatherization program, as an example, was from the era of
2012 and from the Loan Programs Office, you know, maybe up to
2015, 2016. So, the Department was aware of these things, and the
Department has been actively putting controls in place or building
out capabilities as necessary to address these issues for many
years. But, so, from those programs perspective——
Mr. FALLON. The gentlelady’s time has expired.
Ms. HOGAN. Sorry.
Mr. FALLON. The Chair recognizes gentleman from North Caro-
lina, Mr. Edwards.
Mr. EDWARDS. Thank you, Mr. Chair. On October 19, 2022, the
Department of Energy announced the availability of $2.8 billion
under the law for manufacturing of batteries for electric vehicles
and the electric grid. Reports later indicated that the Department
14
of Energy awarded Microvast, a lithium battery company, $200
million of American taxpayer dollars despite the company’s pri-
mary operations taking place in China. I have a bit of an interest
in China this afternoon. Dr. Hogan, are you aware of funds under
the Infrastructure Investment and Jobs Act, the Inflation Reduc-
tion Act, or the CHIPS and Science Act going to China, Chinese
companies, or companies susceptible to control or influence by the
Chinese Communist Party?
Ms. HOGAN. We are not aware of any dollars going to companies
as you describe.
Mr. EDWARDS. What are you doing to prevent the transfer of
funds to other adversarial companies, entities, or nations?
Ms. HOGAN. We at the Department have a history of doing due
diligence around any potential applicant for these types of solicita-
tions. We do vetting, leveraging information we get through our in-
telligence and counterintelligence experts at the Department. We,
based on the times that we now have and the magnitude of dollars
that we are now talking about, are amping up the efforts that we
have had to date. We have established a new vetting center to coa-
lesce this type of information and expertise so that we can double
down on the types of assessments you are discussing, you are
bringing up.
Mr. EDWARDS. And, so, are you assuring this Committee that
these dollars could not and will not be distributed to Chinese enti-
ties?
Ms. HOGAN. These dollars will not go to Chinese entities.
Mr. EDWARDS. Is that in policy or in law? What would be the pro-
hibitive source to ensure that those dollars don’t go to Chinese enti-
ties?
Ms. HOGAN. I think it is both, but I will find that answer for you.
Mr. EDWARDS. All right. Inspector General Donaldson, does the
OIG recommends safeguards to prevent American taxpayer dollars
from going to entities owned, operated, or susceptible to control or
influenced by the Chinese Communist Party?
Ms. DONALDSON. Yes, sir, without a doubt.
Mr. EDWARDS. What about other adversarial entities or nations?
Ms. DONALDSON. We feel exactly the same about all the nations
of concern.
Mr. EDWARDS. And what are those safeguards?
Ms. DONALDSON. Well, the Department has been working on this
for years, and thankfully working with involving the Office of the
Inspector General on the area that we refer to as research security.
So, there are several ways that you can try to combat this. I think
the U.S. General Accounting Office is about to launch an audit of
the Department on technology transfers. But when technology is
leaving our facilities, technology that the taxpayers have paid for,
that is a very important issue, and we all know that a lot has al-
ready flown the coop.
So, you do that through a series of careful disclosures in connec-
tion with grants and other sorts of financial assistance tools, and
then if those disclosures are inaccurate, you have to prosecute
those people. It is very important that you have a strong message
of deterrence in connection with those disclosures. That is your
basic grant fraud.
15
Mr. EDWARDS. And, so, for either of you, I started my comment
with some background information that $200 million of American
taxpayer dollars were used for companies doing operations in
China. In spite of the safeguards, how did that happen?
Ms. HOGAN. Well, let me first sort of correct the record there. So,
the company that was selected for negotiation for an award,
Microvast, is a U.S. company. That said, that company has not yet
received any money. It was selected for a negotiation and is in that
process where we are continuing to do the type of due diligence we
are discussing.
Mr. EDWARDS. Thank you, Mr. Chair. I see my time has expired.
Mr. FALLON. Thank you. The Chair now recognizes the
gentlelady from New Mexico, Ms. Stansbury.
Ms. STANSBURY. All right. Thank you, Mr. Chairman, and again,
welcome to our witnesses today. It is a pleasure to have you here,
and we appreciate the work that you do.
You know, I want to just say at the outset here that I have been
proud to be part of one of the most productive Congresses ever in
the history of the United States. In fact, this last Congress, we
passed more generational legislation than has passed in decades in
this country that includes the Bipartisan Infrastructure Bill. It in-
cludes the Inflation Reduction Act, which not only makes the larg-
est investment in Department of Energy Programs, it makes the
largest investment in clean energy and climate programs ever in
the history of this country and in the history of any country on the
planet ever. It is massive. It is a huge investment. And the reason
why we made that investment is to tackle the global climate crisis
so that our planet does not cross a global tipping point as we are
pursuing a clean energy future.
And in addition to that, we passed the CHIPS Act to address our
national security issues around the manufacturing of CHIPS to
help modernize our national labs, which the Department of Energy
oversees, to update our science and innovation around all of our
clean energy issues, and to ensure that we are repatriating tech-
nologies that actually make us vulnerable to these foreign influ-
ences that actually we have been discussing here today.
So, taken as a collective, these pieces of legislation, which this
Congress passed with the support of our President, were really de-
signed to tackle three crises that the United States was facing: re-
building our economy in the wake of disastrous manufacturing poli-
cies for decades, which off-shored millions of American jobs to other
countries, and which, of course, made our country vulnerable in the
wake of a global pandemic and affected us with global supply chain
shortages and inflation, which we are still experiencing today. It
threatened our national security as so much of our actual infra-
structure and technologies that we use for our national security are
now manufactured overseas, and, of course, the global climate chal-
lenge.
And of course, the Department of Energy, Dr. Hogan and Honor-
able Donaldson, are really at the forefront of tackling these chal-
lenges across all three of those crises. So, I am delighted to have
the opportunity to talk to you about them here today. And for me,
these really touch close to home because I represent New Mexico’s
1st congressional District, which is also home to Sandia National
16
Laboratories, whose core mission is actually to address all three of
those crises—the global climate crisis, our energy security, our na-
tional security—and to help stimulate manufacturing and repa-
triate American manufacturing back home.
So, we have heard a lot of strange claims today about the pur-
pose of these bills and how the funds will be used. But I just want
to make sure that we are completely clear on this one piece, which
I think keeps coming up over and over here, which is about the na-
tional security implications of these bills.
So, Dr. Hogan, you know, let us turn to the CHIPS Act first. Is
not the reason that we passed the CHIPS Act primarily, the big
push this last year in addition to all of the science and technology
and labs, things that we included, was actually to address our na-
tional security risks from China and chip manufacturing overseas?
Ms. HOGAN. I believe that is why we passed that, absolutely.
Ms. STANSBURY. And, in fact, in addition to that, these invest-
ments that we are making in major energy infrastructure, you
know, the kinds of investments that we are talking about, these
private sector companies and these public private partnerships,
will help to build that clean energy infrastructure that will make
us not only energy secure in this country, but more competitive
internationally. Is that true?
Ms. HOGAN. Yes. There is a huge investment wave ahead of us
as we seek to have a global clean energy economy and a huge op-
portunity for new manufacturing and quality jobs that go with
that.
Ms. STANSBURY. And, you know, I want to just end on this note,
which is that I know, Dr. Hogan, you have been involved with the
IPCC for many years and, in fact, have been honored nationally,
including in association with the Nobel Prize in the IPCC’s work.
We know that global climate change is already happening. The im-
pacts are already being felt here at home. Is it not true that the
reason we passed the Inflation Reduction Act is that it will help
us reduce our climate emissions if we are effective in implementing
it by 30 percent or 40 percent by 2030?
Ms. HOGAN. Yes. These two laws together are really powerful in
bringing together the climate protection that you are speaking to
as well as the economic opportunity and, really, economic opportu-
nities for communities in every corner of every state.
Ms. STANSBURY. Thank you, Ms. Hogan, and that is exactly why
we passed these bills, and we are grateful for your implementation
and vision.
Mr. FALLON. The Chair now recognizes the gentleman from
Pennsylvania, Mr. Perry.
Mr. PERRY. I thank the Chairman. Thank you, ladies for being
here. I am going to start right with what I would consider kind of
the fox guarding the hen house. As you know, many of us know
Secretary Granholm sat on the board of Proterra, which is an elec-
tric vehicle company, from 2017 to 2021. Now, she sold her shares
in Proterra, but we know that she also promoted, in November
2021 at the JFK Airport, where she stood in front of Proterra-made
business buses, Proterra-connected vehicles to advertise the
SuperTruck 3, and for other government funding programs. Just to
give you some numbers in case you are not aware, over $76 million
17
of the $200 million in funding announced in the event went to
heavy vehicle manufacturers associated with Proterra, including
Daimler Trucks, Ford Motor Company, and General Motors.
My concern is there is a trend at the Department of Energy of
money going to politically favored entities. As you know, during the
Obama Administration that was Solyndra, A123 systems, Fisker, et
cetera, and ironically, Secretary Granholm provided funding to
A123 and Fisker, both having operations in Michigan, as the Gov-
ernor of Michigan. And as you are likely aware, these two entities
were sold for pennies on the dollar to the Chinese.
To both our witnesses, in your respective roles, how are you
going to safeguard the hundreds of billions of dollars literally at
your fingertips when the head of the Agency continues to promote
projects for her former employer? Ms. Donaldson?
Ms. DONALDSON. Well, as you know, Congressman, there are a
set of laws that control conflicts of interest. That is a project that
is of great interest to me and probably one of the projects we will
be launching in the next few weeks in connection with the new
funds. So, it is very important that you gather information about
those conflicts, that there be prohibitions, those sorts of things. It
is a challenging area, especially when you realize how all the new
staffing you are ramping up and you are hiring all these people,
it presents an opportunity for people to sort of sneak in that, can-
didly, might intend to go back to——
Mr. PERRY. And we are going to get into that, and I appreciate
your response. Dr. Hogan, anything from your end on this?
Ms. HOGAN. You know, we are putting solicitations on the street,
we are getting applications in, and we are reviewing those applica-
tions with subject matter experts from within the Department and
externally in a way that is totally separate from the political core
in the Department, so——
Mr. PERRY. So, we are making sure that the application process,
that the money just doesn’t end up in the pockets to Democrat do-
nors and Chinese Communist Party-backed entities. The applica-
tion process is what we are relying on. I just want to confirm what
you just said.
Ms. HOGAN. Yes.
Mr. PERRY. OK.
Ms. HOGAN. It is a merit-based, risk-based application process.
Mr. PERRY. All right. And to the IG, Ms. Donaldson, do all the
FERC Commissioners honor the ethics commitments, since we are
on the subject? I mean, do you feel that they do?
Ms. DONALDSON. Well, the commissioners are bound by those——
Mr. PERRY. Well, yes, I know we are bound by—we take an oath
around here, but I wonder if half the people have read the Con-
stitution. Have there been any concerns raised to your office about
the independence, integrity, or conflicts of FERC commissioners?
Ms. DONALDSON. We have had allegations in the past pertaining
to FERC. I don’t think we have any open matters pending to——
Mr. PERRY. So, for example, is there one on the FERC Commis-
sioner Allison Clements regarding outstanding ethics issues be-
cause she has not updated her ethics agreement to account for her
husband’s work in the industry, the very industry that she regu-
lates? Moreover, there are reports that the commissioner has
18
briefed funders of far-left organizations on FERC priorities. Are
you aware of these things? Can you enlighten us on these occur-
rences?
Ms. DONALDSON. I don’t believe we have an open matter fitting
that description, sir.
Mr. PERRY. So, are you saying that the matter has been resolved?
Ms. DONALDSON. I don’t think we have ever opened one. If you
give me one moment, I will confirm that, but I don’t think we have
ever opened a matter of fitting that description. Yes, I don’t think
so.
Mr. PERRY. So, are you saying that there is no matter open and
at this point you are unaware? Are you unaware of this cir-
cumstance where a husband works for the industry?
Ms. DONALDSON. I will say that I am unaware of it. It is possible.
We have a pretty, you know, big apparatus for taking in new mat-
ters. It is possible it is coming through, and I just haven’t been
briefed on it yet.
Mr. PERRY. Could you——
Ms. DONALDSON. But I could get back to you on that, sir.
Mr. PERRY. I would appreciate that.
Mr. PERRY. I would appreciate your report to the Committee re-
garding any information in that regard, and I thank the Chairman.
I yield.
Ms. DONALDSON. Sure.
Mr. FALLON. Thank you. The Chair now recognizes the
gentlelady from Florida, Mrs. Luna.
Mrs. LUNA. To follow up on some questions asked by Mr.
Edwards earlier, what is the DOE’s process to catch the taxpayer
dollars that were going to Chinese-affiliated companies? Like, do
you have an oversight that looks into people before you award con-
tracts? The reason I ask that is because, obviously, the CCP has
been known for corporate espionage. And obviously, with you guys,
I am sure that there needs to be probably a bigger set of oversight
and security for that before you guys are awarding government
contracts.
Ms. HOGAN. Yes, and again, thanks for this question. We know
it is a big issue, a big concern to you and to us. So, you know, we
do due diligence on every applicant that we are thinking is in the
zone of being meritorious for an award. So, we do due diligence
around ownership issues with countries of greatest concern, and we
are doubling down on our capability to do that. So, we have always
done that in what we call a pre-selection phase, and by ‘‘selection,’’
I mean it is a meritorious project. And we would like to select and
then actually enter into a deeper negotiation to get to the point
where you actually award money, a lot of standard terms and con-
ditions that companies need to agree to, to get a government
award. And during that whole post-selection process, we do even
more due diligence around these types of foreign concerns.
Mrs. LUNA. Are you guys doing anything currently to promote
domestic energy production?
Ms. HOGAN. We are doing a lot to promote domestic energy pro-
duction and utilization of domestic supply chain.
Mrs. LUNA. So, one of the biggest issues that I am currently see-
ing exists in Congress is a lot of people will talk about clean en-
19
ergy, but it is not really clean, especially, when it is tied to China
or Chinese productions, for example, windmill manufacturers,
right? So, I guess what I am trying to say is, instead of facing a
global climate crisis, we are facing the global China crisis. And I
am that you would agree—kind of ‘‘yes’’ or ‘‘no’’ real quickly, do you
agree that China is one of the biggest threats to our climate as a
whole?
Ms. HOGAN. China is a big emitter of greenhouse gases, correct.
Mrs. LUNA. And those greenhouse gases do not stay contained in
the China region, correct?
Ms. HOGAN. Right. It is a global——
Mrs. LUNA. OK.
Ms. HOGAN [continuing]. Pollutant, right.
Mrs. LUNA. Yes. How about you, Honorable Donaldson?
Ms. DONALDSON. That is a little out of the lane for an inspector
general.
Mrs. LUNA. No, I mean, it is just your opinion. I would like to
know because you guys are obviously in important positions, and
I want to see your view and perspective on that.
Ms. DONALDSON. That is certainly what is reported.
Mrs. LUNA. OK. So, I think that if there is any way that you
guys can help kind of tailor that and make sure that we are not
doing anything to really enable these companies and corporations,
I think that that would be the best thing.
I guess my last question for you would be, we are currently see-
ing that China has an insanely big monopoly on critical minerals
that we need to produce some of these things for electric vehicles.
What would you say would be the best way that we here in the
United States could handle that instead of outsourcing some of
these operations to other countries like China, for example, the do-
mestic harvesting production?
Ms. HOGAN. We are very interested in building out the critical
mineral material supply chain in the United States to the extent
that the United States will embrace this in different ways. You
know, it is in many parts of that landscape. In addition, I think
we are very engaged with a number of international allies so that
we can have strategic alliances——
Mrs. LUNA. Real quickly. Sorry.
Ms. HOGAN [continuing]. Where we can work together.
Mrs. LUNA. What allies are those, just so I know?
Ms. HOGAN. Like Canada, Australia. There is a list of countries
that also have resources that we work with around opportunities
for critical minerals and materials.
Mrs. LUNA. Do you know if anyone has ties to BRICS, any of the
BRICS countries?
Ms. HOGAN. We can get back to you on that.
Mrs. LUNA. OK. The reason I ask is because BRICS is currently
working to undermine the U.S. dollar as a whole by forming an al-
liance in their debt with China, so I just want to make sure. Thank
you very much. Mr. Chairman, I yield my time.
Mr. FALLON. Thank you. The Chair now recognizes the gen-
tleman from Florida, Mr. Donalds.
Mr. DONALDS. Thank you, Chairman. Inspector General, hello.
How are you? Dr. Hogan, hi. A couple of things. Quick question.
20
The Department of Energy has considered TRISO fuel—T-r-i-s-o—
as the most robust nuclear fuel on Earth. However, the United
States does not have a domestic supply of Halo or other small
amounts at DOE and must currently rely on Russia to fuel our Na-
tion’s innovative advanced reactors. In your opinion, what level of
investments should Congress provide to establish and build out
America’s Halo-producing capability?
Ms. HOGAN. We are very interested in the United States having
a strong nuclear industry. We are very happy to come back and
talk with you about what that takes. As you know, it is com-
plicated, and the war in Ukraine and the position that Ukraine and
Russia are now in has made something that we need a different
strategy on.
Mr. DONALDS. Dr. Hogan, do you think the American people un-
derstand that we get most of our uranium from Russia?
Ms. HOGAN. Yes. I don’t know what the average citizen thinks
about that, but certainly we are at a point now with the war in
Ukraine and with Russia that we need another strategy in this
country.
Mr. DONALDS. Let me ask you this question. The Nuclear Regu-
latory Commission, do you think they have the capability and the
wherewithal to actually permit new commercial reactors in the
United States for use, not for study?
Ms. HOGAN. I think they have the capability to permit reactors,
yes.
Mr. DONALDS. So, what is the problem? What is the holdup?
They haven’t created a new one. All right. Let me rephrase that.
They have not allowed a commercial reactor for use since they were
created. So, what is the holdup?
Ms. HOGAN. I don’t know, but again, I am happy to have a broad-
er conversation with you. We have got amazing nuclear energy ex-
perts at the Department of Energy and happy to come up and talk
with you about what we see as the strategies for this country for
the future.
Mr. DONALDS. When you say the strategies for the future, I
mean, you got to help me understand. Is the Department of Energy
even processing this stuff right now? Like, do not get me wrong—
I get it. The line of question on nuclear fuels and nuclear reactors
is probably not something you guys prepped for over at DOE com-
ing over here today. I understand that. But is there any discussion
going on at the Department of Energy for actually creating sustain-
able base-load power for America because if it is the position of the
Biden Administration and, frankly, Secretary Granholm that every
American should buy an electric vehicle to the tune of $61,000 a
year when most Americans can’t afford spending $61,000 for the
car, they can’t afford to buy that.
If that is her position, is she aware that by doubling the size of
the electric vehicle market in the United States, we don’t have
enough electricity on the grid? Does she realize this? And what is
the plan in the DOE to prevent the grid from going essentially
dark?
Ms. HOGAN. There are a few questions in there. One, we are very
supportive of a nuclear industry in this country. The Department
of Energy has had a nuclear energy research program for a number
21
of years. We are advancing a number of demonstration reactors,
and those are linked, as you probably know, to the need for the
Halo fuel supply. So, we are very interested in figuring out that
roadmap going forward. At the same time, we understand that
electric vehicles take more electricity than the alternative. And
there has been a lot of work to figure out what a modernized grid
should look like and what we can do to invest in the electric grid
in this country to serve the needs of electric vehicles while also
maintaining reliable resilient electricity supply.
Mr. DONALDS. Well, I will say for the record, I am not sitting
here in favor of mass expansion of electric vehicles in the United
States because the component pieces actually are dirtier than the
internal combustion engine if you take into account the mining of
cobalt, lithium, rare earth, et cetera, and then when you have to ac-
tually dispose of the batteries. But in that interim piece when
Americans have to use it, if what the EPA has done, which is basi-
cally going to force Americans to buy electric cars even though they
do not want them, it is not really clear to me that Secretary
Granholm and the Biden Administration have a plan for actually
putting enough electricity on the grid to support America’s needs.
I am out of time. I will yield back to the Chairman.
Mr. FALLON. Thank you. All right. The Chair now recognizes the
gentlelady from New Mexico, Ms. Stansbury, for a closing state-
ment.
Ms. STANSBURY. All right. Well, thank you, Mr. Chairman, and,
again, thank you to our wonderful witnesses. I want to just say,
Mr. Chairman, what a difference leadership makes. I think we see
before us two women leaders who are serving our Nation in the De-
partment of Energy and serving under a female Secretary of En-
ergy. And in a world that has long been dominated for countless
generations by men, I am personally, as a woman in STEM, very
grateful to have you here and for your leadership in the Agency.
You know, my thoughts on this hearing as I was sitting here lis-
tening to my friends across the aisle sort of beat the same drum
over and over again about foreign influence, it actually made me
think of the movie Mean Girls and the quote ‘‘stop trying to make
fetch happen,’’ sort of as if we just say and will this narrative into
being and say it over and over again, somehow it will be what is
actually occurring.
I think we have heard here today, the Department has been
clear, the Administration has been clear. The Department has un-
dertaken significant reforms to ensure that there are appropriate
controls, that there is appropriate due diligence whenever con-
tracting and grant making occurs, to ensure that we are standing
up programs in a way that not only meets the requirements of the
law, but is informed by the communities that will be impacted by
them. And these new programs will be stood up quickly with appro-
priate staffing to get the dollars on the ground to make the impact
that they were designed to.
And, you know, I think sometimes we get lost in the arguments
about why these bills were actually passed. So, I just want to take
a moment to return to that, which is that we passed these three
bills that we are talking about here today: one, to make a huge
generational investment in the crumbling infrastructure this Na-
22
tion, to repatriate our manufacturing back to American shores to
create American jobs, and rebuild our economy and our supply
chains; two, to address the significant national security risk that
was faced by our country, that is faced by our country in the manu-
facturing of CHIPS overseas; and three, and probably most signifi-
cantly, to address our national security and global environmental
security issues around the global climate crisis.
And together, the Bipartisan Infrastructure Law, the CHIPS Act,
and the Inflation Reduction Act literally represent the largest in-
vestment ever in the history of this country in clean energy and cli-
mate change. And I am proud to stand with the Administration, to
stand with our President and my Democratic colleagues, who
helped to make it possible to pass these bills. And I will note my
friends across the aisle, who voted against all of these bills that
will lower costs, that will create millions of jobs over the coming
decades, that will rebuild our economy and make sure that it is a
clean energy economy, and that will help our families.
And I want to say on a personal note, I grew up in a low-income
family. The weatherization programs that we are talking about
here today, these are not just, you know, putting in new windows,
which they are for families. We are talking about people who are
living in trailers and in rural areas and tribal communities across
our country, who are going to have the opportunity to get new ap-
pliances, to get new windows, and to significantly lower their
monthly costs. And all of that money that they will be saving
through that will be able to be put toward putting food on the
table, a roof over their head, and helping their kids go to school.
That is what these bills are all about.
And, so, when we talk about the administration of these funds,
when we talk about what DOE and the amazing staff who are
standing behind you, sitting behind you, in the Department do
every day, they are going to be administering these funds so that
we can put our country on a clean energy path. We can put our
planet on a global climate resilient path, and we can put our fami-
lies on a path to economic security.
So, Mr. Chairman, I appreciate you holding this hearing. I appre-
ciate our witnesses for being here today, and I appreciate the serv-
ice of every single one of our Federal employees who is out there
working every day to get these dollars on the ground. Thank you,
Mr. Chair.
Mr. FALLON. Thank you. You know, the purpose of the hearing
was not to re-debate the need or lack thereof of legislation that was
passed last year. The purpose of this hearing was to talk about the
oversight mechanisms when massive amounts of money is being
spent and are loaned out and to prevent fraud, waste, and abuse,
which should be an absolutely bipartisan mission because not one
person is helped when there is a fraudster taking money away,
when that money is abused, or it is wasted.
And I, you know, heard terms like ‘‘climate deniers’’ and ‘‘fluo-
ride’’ and ‘‘don’t do anything to combat climate change’’ in the
117th Congress. Well, one thing that they did was create historic
deficits, and that is something that we are going to have to talk
about when our entire budget will be gobbled up by interest pay-
ments on our debt.
23
And I like what one of my colleagues said from Florida about
talking about global climate crisis. What about the China crisis?
Let’s be very clear here that the United States, and I am very
proud of the fact, that we have reduced our emissions in this coun-
try because we are responsible. And we have reduced them, I be-
lieve, by about 20 percent over the last 20 years. But let us look
at China. They have increased their carbon footprint by 300 per-
cent over the last 20 years.
And I would love to see the American left talking more about
that because if you really do care about the climate, the No. 1 thing
we should be talking about is China’s emissions and having them
follow the EU and the United States lead and being responsible
global partners. The United States is not a planet. We all live and
share on this one little blue marble, so talking about fraud, waste,
and abuse and trying to be preventative is healthy.
I was actually thinking about this this morning about what my
Democratic friends would talk about because I thought this was
going to be rather bipartisan hearing because this is just about en-
suring that money that has already been allocated, whether you
voted ‘‘yes’’ or ‘‘no’’ on it, is the Inspector General, do they have the
mechanisms in place to ensure that it is spent properly. Because,
you know, to use the IG’s words and not mine, there are an in-
creased risks with new programs. Well, there are 71 new programs,
which mean there is a lot more increased risk, and when an Agen-
cy goes from $45 billion to $100 billion in one year, that is a dra-
matic increase. And, again, using the IG’s words, that is a lot of
money moving fast, and I think that, you know, nobody wants an-
other Solyndra.
I think that we can all agree on that, because not one person
that was in need got any help from that $500 million. Not one envi-
ronmentalist would say that was money well spent, because it
didn’t work. And it was, you know, we were defrauded. And I also
was—I grew up in a home that cost my parents $13,000, so I would
say by any definition that was humble beginnings. And that is why
we live in the greatest country history has ever known because
with a lot of effort and work, you can improve your lot in life. In
a lot of countries, unfortunately, you don’t have that opportunity.
And that is why, again, I just wanted to be real focused on why
we had this hearing was to just prevent that fraud, waste, and
abuse. It did seem like while they say that they are going to under-
take reforms, some of them have not been made yet, but money is
going out the door. That is a dangerous cocktail.
So, in closing, I would like to thank our panelists once again for
their important insightful testimony, and with that and without ob-
jection, all Members will have five legislative days within which to
submit materials and to submit additional written questions for the
witnesses, which will be forwarded to the witnesses for their re-
sponse.
Mr. FALLON. If there is no further business, without objection,
the Subcommittee stands adjourned.
[Whereupon, at 3:39 p.m., the Subcommittee was adjourned.]
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