* Watchdog says underworked staff watched movies, played
* Complaint was made in October 2012
* Company has reimbursed DOE for $842,189 in costs
* Obama attended groundbreaking of plant in 2010
By Ros Krasny
WASHINGTON, Feb 13 The U.S. Department of Energy
has been criticized by its own internal watchdog for poor
oversight of millions of dollars in grants to a U.S. subsidiary
of South Korea' LG Group that have not so far resulted in any
products used in vehicles sold to the public.
"Work performed under the grant to LG Chem Michigan had not
been managed effectively," Gregory Friedman, the DOE's inspector
general, concluded in a report dated Feb. 8 and made public on
Specifically, the report said workers at the Michigan plant,
a subsidiary of chemicals company LG Chem Ltd, sometimes had
little to do and spent their time watching movies, playing cards
and board games, or volunteering at local organizations - all on
the U.S. taxpayers' dime.
LG Chem Michigan was awarded more than $150 million in
funding under the 2009 Recovery Act to help construct a $304
million lithium-ion battery cell manufacturing plant.
A groundbreaking at the plant, then known as Compact Power
Inc, in July 2010 was attended by President Barack Obama and
Jennifer Granholm, who was then governor of Michigan.
The project's goal was to design, construct, start up
and test a production facility for lithium-ion polymer
batteries, create more than 440 jobs, and produce enough battery
cells annually to equip 60,000 electric vehicles by the end of
But LG Chem continues to supply from its South Korean
facilities, not from Michigan, the cells that are used by GM in
the final assembly for the battery packs used in the electric
Chevrolet Volt. And only about half of the expected jobs have
A GM spokesman referred questions to LG.
The report said management at LG Chem Michigan "stated that
it had initiated actions to address the issues identified." A
U.S. spokesman for LG Chem Michigan could not immediately be
reached for comment.
The inspector general said his office received a complaint
in October that the company had misused grant funds.
"The complainant asserted that employees ... had little work
to do and were spending time volunteering at local non-profit
organizations, playing games and watching movies at the expense
of the federal government and taxpayers," Friedman wrote.
"The review confirmed the allegations. Specifically, LG Chem
Michigan inappropriately claimed and was reimbursed for labor
charges incurred by a variety of supervisory and staff employees
for activities that did not benefit the project," Friedman
"Even though the facility had produced a large number of
test cells, the plant had yet to manufacture battery cells that
could be used in electric vehicles sold to the public."
LG Chem Michigan so far has far reimbursed the Energy
Department for $842,189 in costs that the inspector general
found to be "unreasonable and unallowable."
Some of those costs entailed time billed while employees
were volunteering at Habitat for Humanity, animal shelters and
outdoor nature centers, among others - sometimes on an almost
"The amount of time spent volunteering ranged from one day
for certain employees to five days per week for others," the