The Department of Energy (DOE) Title XVII Loan Guarantee Program is coming up for some much needed scrutiny after two companies funded through the program went bankrupt this fall, losing taxpayers potentially up to $600 million. The Obama administration has asked former treasury official Herb Allison to conduct a two-month review of the program. Allison served as the assistant secretary of the Treasury for financial stability until September 2010 and served as president of Fannie Mae during the Bush administration. He is working with law firm Arnold & Porter and investment bank Greenhill & Co., and the review will look at all projects currently funded through the loan guarantee program as well as the DOE's monitoring process for the program. His report is expected out sometime in February. Furthermore, the Government Accountability Office, which has done periodic reviews of the loan guarantee program since its inception in 2005, will also release a report in January or February to review the due diligence process of the program.

Taxpayers for Common Sense has been a long time critic of the program ever since it was passed as part of the Energy Policy Act of 2005. The program has serious structural flaws which fail to appropriately protect taxpayer dollars, as evidenced by the recent bankruptcies. Among many issues, the program underestimates costs, assumes unreasonable default risks, guarantees too high a percentage of projects, and lacks meaningful transparency. See our materials on the program, its pitfalls, and further information on some of the companies seeking loans through the program.