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Is your tax money paying for jobs in Finland?
A TV ad running in eight states blames President Barack Obama for sending stimulus money overseas while Americans are out of work.
"Tell President Obama, American tax dollars should help American taxpayers," the narrator says. Instead, $2.3 billion in tax credits funded jobs in Mexico, Finland and China, the ad claims.
Americans for Prosperity, a group dedicated to "educating citizens about economic policy" that works closely with tea party activists and has been funded by the conservative Koch family, released the ad April 26, 2012.
Here’s the string of claims, starting with an image of the president signing a bill:
Washington promised to create American jobs. We passed their stimulus. But that's not what happened. Fact: Billions of taxpayer dollars spent on green energy went to jobs in foreign countries. The Obama administration admitted the truth, that $2.3 billion of tax credits went overseas, while millions of Americans can't find a job. $1.2 billion to a solar company that's building a plant in Mexico. Half a billion to an electric car company that created hundreds of jobs in Finland. And tens of millions of dollars to build traffic lights in China.
We rated one claim from the ad, about stimulus tax credits supposedly funding a plant in Mexico, a Pants on Fire falsehood. A second claim, on building traffic lights in China, we rated Mostly False. In this fact-check, we’re examining if those tax credits included "half a billion to an electric car company that created hundreds of jobs in Finland."
(We've also checked many other exaggerations about the stimulus.)
The ad said its source for the Finland claim was an ABC News article, "Car Company Gets U.S. Loan, Builds Cars In Finland."
A loan for U.S. work
The first clue something’s wrong is in that ABC News headline. A car company got a "U.S. loan." That’s not the same thing as a tax credit. Taxpayers expect to get loan money back, with interest. (Though, they don’t always. See: Solyndra.)
Things get even more wrong from there.
That U.S. loan program? It's the Advanced Technology Vehicles Manufacturing program through the Energy Department. And it's not funded by Obama’s stimulus bill — otherwise known as the American Recovery and Reinvestment Act of 2009. It is, in fact, a program signed into existence by President George W. Bush in 2007 and first funded by legislation Bush signed in 2008.
The program was designed to support development of advanced technology vehicles.
The Bush administration was in charge when the automaker filed its application. The Obama administration was in charge when the company’s loan was approved. The stimulus bill had nothing to do with it.
Now, the ad could have raised relevant criticism of the Energy Department’s loan programs. Watchdogs inside and outside government have argued since the Bush administration that the programs haven’t included safeguards sufficient to protect taxpayers. Instead, the ad says stimulus tax credits funded overseas jobs. That’s the claim we’re weighing here. And that’s just not the case.
Fisker Automotive, a U.S. automaker with global headquarters in Anaheim, Calif., got its $529 million federal loan to develop and produce two lines of plug-in hybrid electric vehicles — the Karma and the Nina.
The project was expected to create about 2,000 jobs in Wilmington, Del., where the Nina would be manufactured, according to the Energy Department.
Part of the loan — $169 million — paid for design, engineering and other work in the United States on the Fisker Karma. A larger part — $359 million — was slated to help buy and reconfigure a shuttered General Motors plant in Delaware to build the Nina.
Here’s where Finland enters the story: Before its Energy Department loans were approved, Fisker had decided it would manufacture the Karma at a plant in Finland. The company argued there simply wasn’t a U.S. plant available for the type of car they were building. But 65 percent of the parts for the Karma, based on cost, would come from U.S. suppliers.
"There was no contract manufacturer in the U.S. that could actually produce our vehicle," Henrik Fisker, the company's founder, told ABC News. "They don't exist here."
The loan for the design of the car "was only used for the U.S. operations" and could not be spent overseas, according to Fisker and the Energy Department.
Meanwhile, most of the loan has yet to be disbursed. Fisker says it stopped taking loan money from the Energy Department in May 2011, after drawing $190 million — most of it for Karma design and development. Its Nina project, now called the Atlantic, has been delayed.
The News Journal in Wilmington, Del., reported the payments to Fisker stopped after the company failed to meet Energy Department milestones set as conditions for the loan.
"Our loan documents require borrowers to meet certain milestones and other conditions prior to receiving loan proceeds," department spokesman Damien LaVera told PolitiFact. "As has been widely reported, Fisker has experienced some delays in its sales and production schedule -- which is common for start-ups.
"As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America."
That makes it an open question when the Delaware plant will produce Fisker autos. As of April, it only employed a small maintenance team. In the meantime, it's not getting loan money.
An ad from Americans for Prosperity starts with an image of Obama and says the stimulus bill sent tax credits overseas, such as "half a billion to an electric car company that created hundreds of jobs in Finland."
The reality: Half a billion in loans from a Bush-era program were approved for Fisker Automotive. But they weren’t tax credits, weren’t part of the stimulus bill, and didn’t go to Finland. And so far, the company has only gotten $190 million in those loans, far less than the half a billion.
Instead, the U.S. company spent a third of the money on U.S. engineering of a new electric vehicle. It chose to manufacture the car in Finland, without U.S. help. Another two-thirds of the loan, which it may or may not get, will go toward retooling a shuttered GM plant in Delaware.
The ad strings together disparate statements to tell a concocted story. The result is simply False.
Americans for Prosperity, "AFP Wasteful Spending Ad," April 26, 2012
Americans for Prosperity, "AFP Ad Scrutinizes Wasteful Use of Taxpayer Dollars," April 26, 2012
PolitiFact, "Ad says stimulus tax credits funded a solar company building a Mexico plant," May 2, 2012
PolitiFact, "Ad says stimulus tax credits funded traffic lights in China," May 3, 2012
New Yorker, "Covert operations: The billionaire brothers who are waging war against Obama," Aug. 30. 2010
NPR, "Who's raising money for tea party movement?" Feb. 19, 2010
Los Angeles Times, "Koch brothers now at heart of GOP power," Feb. 6, 2011
Americans for Prosperity, "About Americans for Prosperity," accessed Nov. 11, 2011
Washington Times, "'Green' jobs no longer golden in stimulus," Sept. 9, 2010
ABC News, "Car Company Gets U.S. Loan, Builds Cars In Finland," Oct. 20, 2011
Inteview with Damien LaVera, spokesman for the Energy Department, May 2, 2012
Fisker Automotive, Fisker Automotive Fact Sheet, accessed May 2, 2012
Energy.gov, "Fisker, Tesla, and American Auto Innovation," Oct. 20, 2011
Fisker, "Press Releases: Fisker Statement re: Misleading News Reports," Oct. 21, 2011
Fisker Automotive, "Fact Sheet: Fisker Karma and Fisker Automotive," Feb. 16, 2012
Energy Department Loan Programs Office, "Fisker Automotive," accessed May 2, 2012
Energy Department Loan Programs Office, "About the ATVM Loan Program," accessed May 2, 2012
Department of Energy Loan Programs Office, "The Financing Force Behind America’s Clean Energy Economy," accessed May 2, 2012
Energy Department, "Department of Energy Announces Closing of $529 Million Loan to Fisker Automotive," April 23, 2010
Federal Register, "Advanced Technology Vehicles Manufacturing Incentive Program," Nov. 12, 2008
Wilmington, Del., News Journal, "Can Fisker keep its promise?" Feb. 13, 2012, via Nexis
Wilmington, Del., News Journal, "Fisker catches flak on GOP campaign trail" April 19, 2012, via Nexis
Taxpayers for Common Sense, "DOE Loan Guarantees: Overview, Risks and More," Nov. 3, 2011
Government Accountability Office, "New Loan Guarantee Program Should Complete Activities Necessary for Effective and Accountable Program Management," July 2008
Government Accountability Office, "Further Actions Are Needed to Improve DOE’s Ability to Evaluate and Implement the Loan Guarantee Program," July 2010
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