DOE's loan office closed $1.4 billion of its $250 billion authority

The Department of Energy's Loan Programs Office -- since renamed the Office of Energy Dominance Financing -- exists to lend federal money to energy and manufacturing projects too risky for private banks.▸ Two new loan programs added since 2021 increased its available loan authority many times over, to more than $400 billion. Two 2025 oversight reports examine what the office has done with that authority and who is deciding how to use it. GAO⧉ found the office is years behind its own pace for approving loans, with review guidance too inconsistent to guarantee accurate decisions. DOE's own inspector general⧉ found the office couldn't document that most of a sample of its new employees were ever screened for conflicts of interest -- and that one of them helped approve billions of dollars in loans touching their own former employer.

The clearest example is the Energy Infrastructure Reinvestment Program, created in August 2022 with $250 billion in loan authority that expires September 30, 2026.▸ As of September 30, 2024, the office had closed exactly one loan under it, for about $1.4 billion. Another $108.3 billion sat in submitted applications still working through the pipeline. GAO's own assessment: the program will almost certainly fall short of its full $250 billion authority before that authority disappears.

That program isn't an outlier.▸ The office set internal targets for how many applications it would move to conditional commitment and financial close each year. In 2023, it aimed to move at least 36 applications to conditional commitment; it actually moved 9. It aimed to close 17 loans; it closed 1. Applications also take longer than they used to -- the median time to complete each of the three review phases is 19% to 41% longer than GAO found in a 2012 review of the same office.

The office did pick up the pace late in 2024: in the final three months of the year, after GAO's own data cutoff, it reported offering 13 new conditional commitments worth $41.2 billion and closing 11 more loans worth $24.4 billion -- together, about half the total value the office has ever closed across all five of its loan programs.▸ Even with that surge, GAO found the office still missed its 2022-2024 targets and remains unlikely to use the full authority Congress gave it before that authority lapses.

GAO found the office's application-review guidance contradicts itself in places and, in 11 instances, points staff to templates and documents that officials said no longer exist or were never used.▸ Spreadsheet-scoring templates had their own errors: one formula treated a "not applicable" entry as an automatic failing score, cutting one project's rating from 2.75 to 2.2 on one measure; a separate scoring scale overlapped so badly that a single numeric score could land in two different credit-rating categories. Reviewing a sample of 283 application documents from 23 loan applications, GAO found 23 incomplete, 2 missing outright, 15 with unclear or absent sign-offs, and 10 containing technical errors -- including miscalculated scores and chemical formulas wrong enough to misname the compound involved.

One gap concerns DOE's own regulations: projects seeking Section 1703 loans must be "innovative" at the moment the office issues its final term sheet, but the office actually makes that determination months earlier, during initial intake, with no required step to check again later.▸ For the two Section 1703 projects GAO examined, at least 11 months passed between that early determination and the term sheet. In one case, the technology changed enough in between -- losing features engineers had flagged as the innovative part -- that GAO couldn't confirm the project still qualified when the loan guarantee was actually issued. GAO recommended closing that gap; DOE was the only one of GAO's four recommendations it declined to accept, arguing its existing process already covers it.

DOE's inspector general set out later that year to answer a narrower question: does the Loan Programs Office manage conflicts of interest for its own federal employees?▸ Reviewing a sample of 40 new hires out of 179 brought on between 2021 and 2024, it found potential conflicts of interest or an appearance of lost impartiality in 8 of them -- none of which the office had caught on its own. In one case, a former financial-industry executive participated in approving matters involving their own former employer, work they should have been recused from.

The bigger problem was structural: the Department's standard pre-employment conflict screening only applies to employees converting from contractor roles or joining senior executive ranks.▸ That left 24 of the 40 sampled employees -- 60% -- with no pre-employment conflict review at all. Two of those 24 turned out to have real conflicts. One was a supervisory loan specialist who sat on a company's board while working on matters touching that company. The other authorized interagency package concurrence -- sign-off needed to move loans forward -- for multiple loans worth billions of dollars in which their former employer served as financial advisor or investor, despite a recusal specifically meant to prevent exactly that. Separately, 9 of the 40 employees never got required approval for outside positions they held, and for 7, the office gave the Department's ethics office incomplete information to review -- in one case naming only one of a new hire's six former contractor employers.

The inspector general traced these gaps to a lack of internal structure: the loan office had no conflict-of-interest standard operating procedure of its own and no dedicated ethics official in its legal division, even though neither is technically required.▸ It also noted an earlier, related audit from August 2025 that found the same office lacked an effective framework for managing conflicts of interest among its contractors, too. DOE concurred with all three of the inspector general's new recommendations -- write an office-specific conflict policy, designate an ethics official, and resolve the specific conflicts identified.