An electric car start-up and its sister company sued the Energy Department on Thursday, claiming Secretary Steven Chu and his agency awarded money to politically favored firms and strung along their firms and others in a “fixed” race for federal funds.
In addition to complaints of cronyism, XP Vehicles and Limnia said they have evidence suggesting the Energy Department improperly shared their patented technology with competing companies that won federal funding.
XP Vehicles had sought a $40 million federal loan in 2009, proposing to make a lightweight sport-utility vehicle of space-age materials, and was ultimately rejected. Limnia had devised a rechargeable energy storage system that would power the car.
The two firms made their complaints of unfair treatment in two separate lawsuits in Washington, in the U.S. District Court and the federal claims court. They are seeking total damages of about $675 million.
“XP and Limnia are fighting against the Department of Energy’s lack of fairness in favor of politics, as well as its flagrant abuse of taxpayer dollars to harm small business and benefit political cronies,” said Dan Epstein, executive director of Cause of Action, a nonprofit watchdog group that helped the sister companies file their suits. Epstein previously worked as Republican counsel for the House Oversight and Government Reform Committee, which has investigated several clean-technology loans.