The entire "green subsidy" program, as we've discovered, is rife with corruption, cronyism, and just plain bad decisions. But beyond all of that, this is what happens when government - rather than the market - picks winners and losers.
An electric vehicle manufacturer that received a $529 million loan from the Energy Department is recalling 239 vehicles.
The Transportation Department's National Highway Traffic Safety Administration (NHTSA) said Thursday that the company, Fisker Automotive, will recall its Karma vehicles made between July 1, 2011, and Nov. 3, 2011, because of a faulty electric battery component that could cause a fire.
"Within the high-voltage battery, certain hose clamps may have been positioned incorrectly during assembly. If positioned incorrectly, the batter compartment cover could interfere with the hose clamps, potentially causing a coolant leak from the cooling hose," NHTSA said in its recall notice Thursday.
"If coolant enters the battery compartment, an electrical short could occur possibly resulting in a fire."
The Energy Department issued a $529 million loan to Fisker in April 2010 for the development of its plug-in electric vehicles.
The administration has come under fire for issuing the loan after ABC News reported in October that Fisker is making its vehicles in Finland because it could not find a contractor in America to manufacture them.
Fisker is backed by Obama fundraiser and venture capitalist John Doerre who runs a company that has Al Gore sitting on its board of directors. Doerre raised millions for Obama's 2008 campaign.
It seems that not only is the government picking winners and losers, it is picking them based on their political clout.