Watchdog Faults Hiring at Energy Department Loan Office

A senior official in the U.S. Energy Department’s loan office hired a friend for one position and forwarded the names and resumes of 10 people to a contractor, which may have influenced its hiring practices, a report from the department’s inspector general said today.

The contractor, which, like the official, wasn’t named in the report, hired all 10 of the people, the report said. The contractor said it didn’t feel pressure to hire the individuals, which it said were all qualified for the positions.

The loan programs office manages a portfolio of billions of dollars in outstanding loans to clean-energy companies and auto manufacturers, part of an effort by the administration to promote technologies that release less carbon dioxide emissions in response to climate change.

“The appearance of favoritism in the federal hiring process and active involvement in the contractor staffing process could erode the public trust in the hiring process and could damage the relationship between the department and its contractors,” according to the report by the inspector general, the agency’s auditor.

Congressional Republicans have criticized the office for trying to pick “winners and losers” among companies. The office gave a $535 million loan guarantee to Solyndra LLC, the solar panel maker that went bankrupt two years later. The office says the failure rate has been less than originally estimated by the law that set up the office.

Applicants Screened

The loan program official who was the subject of the inspector general’s report “acknowledged screening applicants’ resumes and, in some cases, conducting preliminary phone and in-person interviews of certain applicants prior to referring specific resumes to the contractor for employment consideration,” the report stated.

The report was signed by Sandra Bruce, assistant inspector general for inspections.

The loan programs office said it established interview panels and limited hiring authorities to only a few officials, excluding the person who was the subject of the inspector general’s report, in an effort to strengthen its hiring practices.

While the inspector general’s office said it verified the senior officer’s contention that the friend hired to work in the office was qualified for the position, the report said the hiring may have been influenced by the prior relationship.

Officials told the inspectors that the office had trouble attracting qualified applicants to fill slots where specific technical expertise was required.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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