The saga of congressional Republicans versus the Obama administration’s green technology programs continues this week. This time around, it’s about foreign investors in luxury hybrid automaker Fisker and mass recalls from lithium-ion battery maker A123.

In a letter to Energy Secretary Steven Chu released Monday, U.S. Senators Chuck Grassley, R-Iowa, and John Thune, R-SD, raised new questions about the two companies, which have both faced intertwined financial and operational challenges in the past six months.

Among the questions asked in the letter was whether or not the Department of Energy will consider blocking A123’s access to part of the $249 million in stimulus grants it received to build its factory in Livonia, Mich. That’s the same factory that issued faulty batteries now subject to a massive and expensive recall that has put the financial viability of the Waltham, Mass.-based company in question.

A123 has told investors in the past month that it faces doubt about its ability to continue business under the costs of the recall, which had grown to about $66.8 million as of March. The company reached an agreement to raise $50 million in short-term debt last month, but has continued to issue “going concern” statements as its share price has fallen to record lows.

Senators Grassley and Thune questioned whether the DOE would take A123’s financial struggles into account in deciding whether or not it could continue to access its grant funding. The company has about $120 million left of the $249.1 million grant, and in April received a two-year extension on its deadline to spend the money.

There’s little doubt that a suspension of the grant would have a negative effect on A123, which laid off about 125 of its 850 Michigan employees in November. The company lost $257.7 million in 2011, a 69-percent increase from the year earlier, and in April it reported a first-quarter loss of $125 million, compared to a $53.6 million loss in the same quarter last year.

While it’s unclear how DOE will respond to the letter, the department has already suspended its $529 million loan to Fisker, which buys A123’s lithium-ion batteries for its Karma plug-in hybrid sports car. That suspension has continued into this month, according to a Wall Street Journal report last week that said Fisker was seeking to raise $87 million in new equity. The Irvine, Calif.-based startup has laid off employees and halted work on the Delaware factory where it intends to build its next-generation plug-in sedan.

The letter also contained a jab at DOE’s decision to loan money to Fisker, on the grounds that the company has an investment from the Qatar Investment Authority, the sovereign wealth fund of the oil-rich Persian Gulf nation.

“Why should the American taxpayer have to accept the credit risk of a company owned by a foreign government?” the Detroit News quotes the letter as saying. This is an overstatement, however -- while QIA led a $65 million round of investment into Fisker in 2008, the company has raised more than a billion dollars from investors, indicating that QIA’s stake in the company is not large enough to constitute ownership. 

It’s the latest in a string of attacks on the program that funded such spectacular green technology failures as Solyndra and Beacon Power, as well as many other projects that are proceeding on course. Republicans in Congress have raised questions about how DOE chose the winners of the loans, accusing various parties of inside dealing and poor due diligence in making its selections.

The White House’s review of the program reported in February that it had generally protected taxpayer funds in giving out a combined $23.77 billion in loans, though it also found that DOE had underestimated the credit risks involved in some categories. But that hasn’t stopped the inquiries, including the letter from Sens. Grassley and Thune, which stemmed from an inquiry started in April.

DOE spokesman Damien LaVera responded to Monday’s letter by saying that the department’s loans and loan guarantees have “strict conditions in place to protect taxpayers, requiring borrowers to meet strict milestones and conditions prior to receiving loan proceeds.”

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