Executives of an energy company that received $250 million in federal money made donations to members of Congress while the company was facing bankruptcy.
Even as advanced battery maker A123 Systems struggled for financial viability, it played the Washington insider game, where political money and access go hand in hand.
The Massachusetts firm dished out nearly $1 million to hire a powerhouse lobbying firm with close ties to President Barack Obama between 2007 and 2009, and two of its top executives made personal donations to several high-profile Democrats in Congress as it won federal funding for its efforts to build the next generation of lithium batteries for electric vehicles.
And its president and CEO, David Vieau, an early financial backer of President Barack Obama, scored five invitations to the White House in 2009 and 2010, including a meeting he attended with the president, White House logs show. And when the company opened a new Michigan plant, Obama made a high-profile call to congratulate.
The company offered a compelling storyline for an administration eager to create jobs and spur alternative energy: it would employ hundreds of new workers at two plants in the politically critical state of Michigan that was hoping to revive its lagging auto industry.
The efforts paid off.
The company managed to get several lawmakers in both parties to support its request for federal funding, securing almost $6 million during the end of the Bush administration and then a $250 million grant from the American Recovery and Reconstruction Act after Obama took office.
A123's stimulus grant accounted for 12.5 percent of the stimulus' $2 billion fund to support the manufacturing of advanced electrical vehicle components, making it one of the biggest beneficiaries among 29 companies that split the momney.
And the firm scored a spot on a 2011 Obama administration's trade mission to India, a country hungry for alternative energy technologies. The trip put A123 in elite company as just one of only about 300 American companies to get invited on a trade mission during Obama's first term in office.
The company drew praise from both sides of the aisle, including from Samuel Bodman, Bush's Energy secretary, and from Obama himself who called the firm's new Michigan plant when it opened Sept. 13, 2010 and even boasted how he had met with Vieau personally at the White House.
"You guys are making us proud," the president said. "The work you’re doing will help power the American economy for years to come."
But all the promise and political influence couldn't overcome the realities of a startup industry. And when electric vehicle sales lagged and the firm had to replace defective cells in a battery it made for a Fisker electric car, the company teetered toward collapse.
By the time it filed for bankruptcy Tuesday -- the fourth major clean energy company backed by the Obama administration to fail -- it had already collected more than half the taxpayer money it had won from the stimulus. And it reignited an election-year debate over the government's screening process for picking clean energy loan and grant recipients.
Republicans and Democrats immediately traded barbs from Michigan to Washington, a process certain to play out for several days as the merits of government support for the clean energy sector remains a hot topic of debate. The GOP jumped at the chance to portray the company as a failed pet project of the Obama administration, but as reported by the Washington Guardian, several Republican lawmakers have been advocates for cleaner car technology, including current Michigan Senate candidate Pete Hoekstra.
Whatever the arguments in the election, the company's efforts to win political influence are undisputed.
Senate lobbying records show A123 hired the powerhouse lobbying firm of Skadden Arps, paying it $380,000 in 2007, $480,000 in 2008 and $110,000 in 2009 to help it secure government backing. The firm has connections across the lobbying company, including four lawyers who served as fundraising bundlers for Obama's 2008 election. Lobbyist Leslie Goldman - the Energy Assistant Secretary for International Affairs under President Jimmy Carter - handled A123's lobbying, disclosure records show.
Among the company's early accomplishments was getting several members of Congress to support its case for federal funding.
Inside the White House, A123's Vieau won invitations to several events, including at least one meeting with President George W. Bush to show off the company's technology in 2007. More recently, the CEO was invited to at least five events or meetings in 2009 and 2010 at the Obama White House, attending at least three of them. One was a small meeting with just seven people and Obama on April 30, 2010, the White House visitor logs show.
Obama referenced the meeting when he called the company's new factory a few months later. "I met with David and some of the A123 team here at the White House back in April, and it’s incredibly exciting to see how far you guys have come since we announced these grants just over a year ago," the president said.
White House spokesman Eric Schultz did not return repeated calls and emails seeking comment Wednesday.
Vieau was an early supporter of Obama, donating $2,300 to the then-senator’s 2008 campaign. His generosity to Democrats continued. He donated a total of $5,000 to the Democratic Senatorial Campaign Committee between 2010 and 2011; $2,000 to Massachusetts Sen. John Kerry in 2010; and since 2009 almost $5,000 to Rep. Edward Markey, who represents Massachusetts’s 7th district near the company's headquarters, according to Federal Election Commission donation records.
One of the company’s vice presidents, Mujeeb Ijaz, also made some donations, chiefly $2,300 this year to Rep. Gary Peters, a Democrat in Michigan where the company has two plants,including one producing lithium batteries for cars. Peters was one of 17 Michigan members of Congress who wrote a letter to Energy Secretary Steven Chu in 2009, advocating that some Recovery Act money be given to A123 to support job growth in the state.
The company doesn't have its own political action committee and neither Vieau nor A123 officials returned phone calls seeking comment.
A123 Systems is a Massachusetts-based company that makes lithium batteries for electric cars. The company received $250 million in grants from the Recovery Act, but has now declared bankruptcy, drawing fire from Republicans who are comparing it to Solyndra (another energy company that went bankrupt after taking federal money).
The American Recovery and Reinvestment Act of 2009, or Recovery Act, is an $831 billion program advocated by President Barack Obama that was designed to inject money into a stagnating economy and provide jobs while improving the infrastructure of the U.S.