Abby L. Harvey
GHG Monitor
8/28/2015
The Department of Energy’s Office of the Inspector General has investigated allegations of misuse of American Recovery and Reinvestment Act funding for the FutureGen 2.0 carbon capture and storage program by project subrecipient Air Liquide. The IG “received a complaint alleging that a Project subrecipient had misused funds in excess of $10 million,” according to an Aug. 10 IG Report. GHG Monitor has confirmed that the subrecipient at the center of this allegation is industrial gas producer and supplier Air Liquide. GHG Monitor was unable to determine who made the allegations.
According to the allegation, Air Liquide directed employees to mischarge labor to the FutureGen project without producing work, spent funds during a period when there could be no beneficial work performed, improperly billed for labor expenses, and inflated overhead expenditures.
The Inspector General’s Office was “unable to substantiate the first two allegations,” according to the report: “We received conflicting testimony in regard to management’s direction to employees on charging to the Project. Although the conflicting testimony was troubling, the evidence was insufficient to support a conclusion that employees had actually charged time to the Project when they were not working on it.”
Furthermore, the allegation that funds were spent when no beneficial work could be performed has been challenged. “We were informed that during the time the mischarging allegedly occurred, significant front-end design work was underway. This appeared to contradict the complainant’s assertion that beneficial work could not be performed,” according to the report.
In response to the allegations, an Air Liquide representative told GHG Monitor this week that the company “is committed to conducting its business with the utmost commitment to professional and ethical standards and compliance with all applicable laws and regulations.”
The FutureGen 2.0 project received $1 billion in ARRA funding in 2009. However, as it appeared unlikely the project would meet the September 2015 spending deadline for the funds, the Department of Energy suspended funding. FutureGen 2.0 was to be an oxy-combustion carbon capture and storage retrofit project located in Illinois.
FutureGen Alliance CEO Ken Humphreys told GHG Monitor last week that the alliance had no prior knowledge of the alleged misuse of funds. “We first learned of the specific allegations against Air Liquide from the public IG report. From the report, it appears that none of the allegations were substantiated during the IG’s initial inquiry; although a routine DCAA audit continues. Maintaining the public’s trust is imperative, so the Alliance supports whatever audits are necessary to bring the matter to a successful close,” Humphries said.
According to the IG report, the DOE investigation has been halted while the Defense Contract Audit Agency conducts an audit of the project. “We suspended our inquiries into these areas to avoid a duplication of effort,” according to the report.
