State officials defend California clean-truck subsidy program as lawmakers weigh reforms
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California clean-air regulators are defending the state’s Clean Truck and Bus Voucher Project after the Los Angeles Times reported that the $1-billion program is facing accusations of fraud, waste and poor oversight.
Although some state officials and lawmakers are now calling for program reforms, members of the California Air Resources Board insisted this week that their “robust oversight” was responsible for uncovering some of the allegations reported by The Times.
At a legislative committee hearing Tuesday on climate change and electric vehicles, Christopher Grundler, CARB’s deputy executive officer of mobile sources and incentives, said The Times’ reporting was “incredibly disappointing.”
Grundler said the story failed to highlight the program’s successes, or credit CARB enforcement officials for flagging some of the alleged misconduct.
The reporters “focused on a very small subset of firms and vehicles where there was alleged wrongdoing and fraud,” Grundler said. “But, [they] remarkably failed to disclose to their readers that it was the CARB team that uncovered the alleged wrongdoing through our very multilayered, redundant guardrails and checks and balances.”
A premier California green transportation initiative is roiled by accusations of fraud, waste and poor oversight. Officials insist it is managed effectively.
In its story, The Times reported that state authorities have launched an investigation into an EV manufacturer that allegedly received nearly $1 million in public funds for “vehicles that did not exist,” according to a ruling in a civil case involving the manufacturer. Authorities are also looking into whether vehicle identification records were altered in order to “impermissibly double-dip,” and obtain multiple vouchers for a single EV, according to a court petition to enforce investigative subpoenas filed by the state attorney general’s office.
The Times also found that 1 in 4 automakers that have participated in the program have ceased production or exited the zero-emission vehicle market, leaving trucking businesses and transit fleets without crucial support to keep their EVs on the road.
It also obtained mileage records for roughly 2,300 vehicles in the program, and found that nearly half were driven less than the state’s conservative benchmarks. Also, at least 5,340 vehicles in the program, or 45%, burn fossil fuels — either because they are hybrids or run entirely on natural gas.
And even though project officials say the program has prevented the release of nearly 1.5 million metric tons of planet-warming carbon dioxide and 2,200 tons of smog-forming emissions, The Times found that the state has failed to keep accurate records of program vehicles, making it difficult to verify the project’s pollution reduction claim.
The Times also found that at least five manufacturers that had participated in the state program had been investigated for fraud, including the now bankrupt Nikola Corp.
Marc Joffe, president of the Contra Costa Taxpayers Assn., said The Times’ findings on the voucher program should be seen as part of a pattern that includes mismanagement on California High-Speed Rail, the LAX People Mover and OC Streetcar.
Nikola Corp.’s former CEO was indicted for fraud. His company’s vehicles were the most heavily subsidized in California’s $1-billion clean truck incentive program on average.
“State and local governments are collecting large amounts of revenue from cap-and-invest, gas taxes, and sales taxes,” Joffe said. “They then plow these funds into expensive projects. ... Yet, time and again, these investments produce disappointing results. California government is long on good intentions, but short on results.”
Others agreed. Susan Shelley, a spokesperson for Howard Jarvis Taxpayers Assn., said the voucher program needed to be overhauled to ensure that public funding is spent responsibly.
“Reforms are necessary to ensure that clean-vehicle subsidy programs, and all regulations related to clean energy technology, are actually feasible and cost-effective after they are implemented, and not only on paper before the money is spent,” Shelley said.
State Sen. Henry Stern (D-Los Angeles), a nonvoting CARB board member, said the program should not be defined by those seeking to take advantage of it.
Stern said he believed the program’s accomplishments far outweigh any alleged fraud or misconduct. However, he said he is open to exploring improvements, so long as it doesn’t hinder crucial funding to deploy EVs.
“It’s a tricky balance. Because on the one hand, we’re in a race against time here, and we’re trying to get dollars out the door. [But] there’s going to be people trying to take advantage of that,” Stern said.
CARB posted a lengthy response to The Times’ reporting. The agency called the program “highly successful,” and said the “vast majority of manufacturers, dealers and voucher recipients” were following the rules and “acting in good faith.”
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