Sen. McCaskill: Report raises red flags about DOE grant oversight

LG Chem used the grant to help build a $304 million battery cell plant. But McCaskill noted just three of five production lines are ready, and that completing the final two would cost the federal government another $22 million.

While LG Chem agreed to repay the federal government for its half of the roughly $1.7 million of questionable costs, McCaskill said the matter required further investigation.

“In addition, because the Inspector General did not review all of the labor costs submitted for reimbursement by LG Chem, it is possible that the value of unallowable labor costs may be even higher,” McCaskill wrote in a separate letter to LG Chem CFO David Lee.

The Missouri Democrat, who is looking into the matter through her role as chairwoman of a new Senate Homeland Security and Governmental Affairs subcommittee on Financial and Contracting Oversight, asked Chu for DOE’s progress on implementing changes outlined in the inspector general report.

Those recommendations included assessing suspicious costs and recouping overpayments, considering a different use for the battery-making facility, improving grant monitoring and taking action against LG Chem.