Just past 12:30 a.m. on a Sunday in 2009, Fisker Automotive COO Bernhard Koehler sent an email to a Department of Energy loan officer, bluntly stating the urgent need to close on a loan guarantee for the electric vehicle company: "I'm sorry if I'm being very direct right now, but we don't have much time."
Without a loan guarantee, said Koehler, the company would be forced to lay off employees and lose investors. "We are oversubscribed in this equity round with DOE support -- and nowhere without it," he wrote.
That's according to an email released by the financial intelligence company PrivCo, which has been publishing documents for the last week on Fisker's loan guarantee through the DOE's Advanced Technology Vehicle Manufacturing Program.
As of this writing, the Department of Energy had been unable to find and directly verify the email for Greentech Media. PrivCo's CEO, Sam Hamadeh, wouldn't comment on where the document came from, but said in an interview that he had verified its authenticity. (The email is likely part of a recent document dump by the House Oversight and Government Reform Committee, which showed DOE officials were increasingly troubled about Fisker's health.)
Here's the bottom half of the email from Koehler to the loan officer. You can find the full text -- and a somewhat hyperbolic interpretation -- at PrivCo's website.
Weeks after this email, the DOE gave preliminary approval for a $529 million loan guarantee. In 2011, after providing nearly $193 million to Fisker to build out its manufacturing operations, DOE froze the loan when the company missed key milestones. And nearly four years later, Fisker has stopped production of its electric vehicles, laid off three-quarters of its staff and is struggling to stay out of bankruptcy.
So what does this email tell us?
It certainly raises red flags about why the DOE would pursue the loan given how distressed Fisker's COO made the company out to be. Unfortunately, it's hard to know how the department responded without seeing the full exchange. Context is important and publishing a single email fails to provide the whole story. On the other hand, even without knowing the full response, Koehler's email is definitely a bright, flashing warning sign of a company in trouble.
"The response was obvious, because three weeks later they got a preliminary loan guarantee," said PrivCo's CEO Sam Hamadeh. "If I were a loan officer at a commercial bank and I received a desperate email from a client...begging me for a loan and telling me they were basically insolvent, they would not be getting a loan. In fact, it would be my responsibility to tell a senior compliance officer to flag any other loans provided to that person."
The email once again opens up questions about why and how the DOE made decisions about backing certain recipients. It also provides more attack points for those who don't believe the DOE should be investing in specific companies -- even those politicians railing on the program who previously requested loan guarantees in their districts.
It's also important to remember that the DOE declined to provide loans to at least a half-dozen other electric car manufacturers. Meanwhile, the vast majority of the loans in the entire loan guarantee portfolio are performing well and will likely cost taxpayers $2 billion less than budgeted.
Hamadeh explained that PrivCo's $20,000 investigation of Fisker (yes, $20,000), which the Department of Energy said "contains errors" in claiming what officials knew about the company's inability to meet milestones, is non-political. But the documents released by PrivCo and House Republicans -- combined with the press coverage of Fisker's increasingly dire status -- are certainly setting off a political firestorm in Washington reminiscent of the months after Solyndra went bankrupt.
We'll publish more context as it becomes available.