Senate Minority Leader Harry Reid is proud of winning taxpayer support for a "green energy" company which former employees accuse of fraudulently obtaining federal grant money, his office told the Washington Free Beacon
Two former employees of Ormat Technologies filed a lawsuit two years ago
claiming that the firm lied to the Treasury Department in order to obtain more than $130 million in federal grants.
The lawsuit also alleged that Ormat retaliated against one whistleblower by threatening to take away her health insurance when she was being treated for breast cancer.
The Free Beacon reported that, in a series of emails, a Reid spokeswoman defended the senator's work on behalf of Ormat, an Israeli firm which operates geothermal plants in Nevada, and called the allegations "unsubstantiated."
Asked if Reid, who is up for re-election next year, regrets going to bat for Ormat, she replied "LOL. Of course not."
Ormat denies wrongdoing in the case.
The Nevada Democrat has advanced Ormat's interests in Washington, and its chairman, Yoram Bronicki, donated the maximum permitted amount to Reid's 2010 re-election campaign. The firm also donated to a nonprofit organization founded by Reid's top political operative, the Free Beacon reported.
And Reid boasted about getting Ormat
a $350 million Department of Energy loan guarantee and touted his own role in expanding a Treasury Department program that the former Ormat employees claim illicitly provided the firm millions more in taxpayer funds.
The focus of the lawsuit is the federal assistance provided to Ormat through Treasury's section 1603
— created under the Obama administration's 2009 stimulus legislation — which provided grants to owners of commercial solar property.
Former Ormat asset manager Tina Calilung and the firm's former business development administrator, Jamie Kell, claim the company knowingly falsified documentation and manipulated balance sheets in order to obtain and keep the 1603 financing.
The lawsuit claims that Ormat has received almost $136.8 million in payments through the 1603 program "through fraudulent and/or false 1603 grant applications."
"Not only did Ormat wrongfully obtain the 1603 funds, but Ormat continues to file false certifications pertaining to the success, viability and operation of the geothermal projects that received grant funds so as to prevent the funds' recapture. Ormat additionally continues to make false public statements claiming its use of funds obtained from the Government were appropriate," the lawsuit alleges.
It seeks damages under the False Claims Act
The plaintiffs allege that Ormat obtained nearly $123 million in 1603 grants for its California-based North Brawley geothermal plant even though that plant "began producing, selling, and delivering electricity in 2008, before the grant application window," the Free Beacon reported.
The lawsuit alleges that: "In order to obtain the 1603 cash grant, Ormat falsely concocted a placed-in-service date for the North Brawley Plant of January 15, 2010. By this date, the North Brawley Plant had already been generating and selling electricity … for over a year."
The lawsuit claims that Kell was coerced into withdrawing a Freedom of Information Act request in November 2012 when the firm threatened to take away her health insurance as she was undergoing breast cancer treatment.
The FOIA request dealt with the Puna geothermal plant in Hawaii, where plaintiffs claim that Ormat submitted a false application for 1603 funds.
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