Mr. Strickland said he could not recall why the air authority was selected to handle the advanced energy program, and he said he wouldn't have made that decision alone because several people crafted the stimulus.
"Obviously [the air authority] didn't operate in isolation," he said. "The Department of Development was involved in decisions and the controlling board was involved in decisions the air quality board would make. It was an effort to achieve a level of efficiency in the administration of the resources but certainly not in isolation."
Air authority chosen
Mark Shanahan, the former director of the air authority who retired in April, 2011, also served as Mr. Strickland's energy adviser while running the authority. Mr. Strickland said Mr. Shanahan's experience would have been a factor in why the air authority was chosen.
"I can't recall exactly what percentage of my thinking was influenced by the fact that Mark was there, but I would assume it was significant," he said. "He was someone I knew personally and was friends with and had great respect for because of his expertise."
Although the stimulus package built in a three-step process of approval for advanced energy loans -- the official OK had to be granted by the air authority's board, the state controlling board, and the Development Financing Advisory Council -- that is where the multiple layers of oversight for the program end.
The air authority isn't required to submit annual reports to the legislature on the health of the advanced energy program. It is, however, required to report on loans that are granted to minority-owned businesses.
"It just would seem to me that [when] you create a $150 million program that somebody besides us ought to wonder what in the world we're doing with it," Ms. Tenenbaum said during the air authority's Sept. 11 meeting.
The air authority's board only learned of loan repayment issues with Ohio Cooperative Solar -- a Cleveland company that received an advanced energy loan -- days before its Sept. 11 meeting. Board members were stunned to discover that although the company had payment issues as early as March, they weren't briefed on the details until six months later.
That gap highlights an ongoing breakdown in the flow of information among the board, the air authority's staff, and USA Energy Advisors.
"When did we know about this? When did anybody know about this? What have we been discussing all year? What have we been discussing very emphatically since June 30? I think it's that we want to know, and here's another loan that we have no idea about," Jeff Jacobson, an air authority board member, said during the Sept. 11 meeting. "I'm speaking for myself, I have never heard word one that this loan is behind. I'm glad to know they have a reason and a plan, but that is not the issue.
"The first issue is why is this the first time that we have heard anything at all that there is another loan that is in default?"
The communication gaps are one area that could be examined by the law firm hired to review the advanced energy loan program.
That review will add to a growing bill the air authority is footing to examine troubled companies or recoup funds from firms that defaulted on their loan agreements. The air authority hired GBQ Partners LLC, a Columbus accounting firm, for up to $100,000 to assess the financial viability of two advanced energy loan recipients.
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