Senators seek to block stimulus money from overseas

By Frederic J. Frommer
AP Writer

Washington — A group of Democratic senators wants the Obama administration to suspend an economic stimulus program aimed at financing renewable energy because of concerns that it’s creating jobs in foreign countries.

The request came in a letter to Treasury Secretary Timothy Geithner attributed to Ohio Sen. Sherrod Brown and three others.

An Energy Department spokesman responded that the stimulus program has helped generate foreign investment in the U.S. wind industry. He called it the “opposite of outsourcing” and said it should be encouraged.

The Treasury Department declined to comment.

The letter to Geithner also was attributed to Sens. Chuck Schumer of New York, Robert Casey of Pennsylvania and Jon Tester of Montana.

The senators asked that the moratorium remain in place until they can pass legislation mandating stimulus aid flow only to projects that preserve and create U.S. jobs, according to the letter obtained Tuesday by The Associated Press.

The letter cited a report by the Investigative Reporting Workshop that found that a majority of the program’s grants went to foreign-owned companies, and that a majority of the turbines bought with the money were built by foreign manufacturers.

“This is not the intended use of Recovery Act funds,” according to the letter.

Dan Leistikow, a spokesman at the Energy Department, which was sent a copy of the letter, said the program has helped put Americans to work, and said it pays for only projects built in the U.S.

He said the Recovery Act has helped attract more than $10 billion of foreign investment into this country’s wind industry, including new manufacturing plants.

“It’s the opposite of outsourcing, and we should encourage — not discourage — those kinds of investments,” Leistikow said.

While some of the grants go to foreign-owned companies, administration officials argue that more than half the components, measured by their value, are built in this country and all the energy projects are installed in this country.

Late last year, a joint venture was announced involving China’s Shenyang Power Group, Cielo Wind Power LP of Austin, Texas, and a private equity firm, U.S. Renewable Energy Group, to build a $1.5 billion Texas wind energy project. A letter to Energy Secretary Steven Chu attributed to Schumer asked that Chu reject federal money for the project because the wind turbines are to be made in China.

“The idea that stimulus funds would be used to create jobs overseas is quite troubling,” according to the letter, “and, therefore, I urge you to reject any request for stimulus money unless the high-value components, including the wind turbines, are manufactured in the United States.”

According to a letter attributed to Chu in response, the program in question is “available to all qualifying entities; it is not a discretionary grant program administered by the Department of Energy.”

On Tuesday, Walt Hornaday, president of Cielo Wind Power, said the company has not yet applied for federal money. He said it is looking at several federal grant programs, including one that would provide 30 percent of approved costs, or around $450 million.

He took issue with Schumer’s characterization of jobs, saying most of those created for the project would be in the United States.