03/09/2012 04:08 pm ET Updated Mar 09, 2012

Dan Coats, Indiana Senator, Lobbied For Energy Department Loans He Later Criticized

An Indiana senator who last fall became one of the most vocal critics of the government's automaker advanced tech loan program -- calling it a process of picking winners and losers among private companies -- had earlier lobbied the Energy Department to hurry up and approve the loan requests of companies based in his state.

Letters obtained by The Huffington Post show Sen. Dan Coats (R-Ind.) had pushed the Energy Department to speed up its loan approval process, given the fact that many companies were complaining the process was taking too long.

In June, Coats wrote a letter urging the Energy Department to speed up its decision making process and start doling out some of the funds. "I believe the agency is capable of much better performance," Coats wrote to Department of Energy Secretary Steven Chu. "DOE has received many dozen qualified applicants, including several strong applicants from my home state of Indiana … I encourage DOE to improve its process and start approving qualified loans."

In August, Coats helped lobby for Bright Automotive, which was planning to renovate a former Humvee plant in northern Indiana to make hybrid delivery vans. On Aug. 2, Coats forwarded to Jonathan Silver, then head of the Energy Department's loan program, two emails, which came from Bright employees asking Coats to help with the company's loan application.

But that same day, Aug. 2, Coats also criticized the Energy Department's automaker tech loan program, after learning Russian steelmaker Severstal had scored an initial approval for a $730 million loan for its manufacture of lighter-weight, high-strength steel in Michigan.

In November, Coats and Sen. Pat Toomey (R-Pa.) questioned the Severstal decision and demanded that the U.S. inspector general investigate. Coats criticized the Department of Energy's process of giving loans to private companies. "This is another example of why the government should not be in the business of picking winners and losers," he said.

Ultimately, the Energy Department decided in January to not finalize the Severstal loan and Coats said the decision was a boon for Indiana steelmakers. Companies in his home state manufacture the type of steel Severstal wanted to make in Michigan.

The Energy Department's Advanced Technology Vehicle Manufacturing program was initiated during the administration of President George W. Bush in the fall of 2007 and expanded under the Obama administration. The $8 billion allocated has gone to just five companies: Ford, Nissan, Fisker Automotive, Tesla and natural-gas van maker the Vehicle Production Group.

Executives from companies that have withdrew their loan applications have complained that the decision-making process took way too long, with waits of 30 to 36 months. Chrysler, which backed out of the application process last month, said the Energy Department kept changing the structure of the loan.

In the past two weeks, two companies have announced they failed to get the Energy Department loans that they had been hoping for. Both had operations in Indiana. After failing to get a loan, Bright Automotive last week announced it was closing its doors.

William Santana Li, CEO of Carbon Motors, which is building a plant in Indiana, said loan applicants are caught up in a political mess. Republicans are trying to bash President Barack Obama's administration over the cases of Severstal and Solyndra, and the Energy Department is too skittish to hand out any more money out of fear it will become more election-year fodder, he said. (Solar panel maker Solyndra filed for bankruptcy two years after receiving an Energy Department loan through another program.)

Carbon Motors' application for a Energy Department loan was rejected earlier this week. "It is clear that this was a political decision in a highly charged election-year environment," Santana Li said.

UPDATES: 5:40 p.m -- The Department of Energy declined to comment.

7:10 p.m. -- Tara DiJulio, a spokeswoman for Coats, said it's inaccurate to describe the forwarded emails as lobbying. The office routinely forwards correspondence to the executive branch without expressing opinions on the request.

Further, she said Coats' letter asking the Energy Department to speed up its approval process also fits with his political stance:

“Senator Coats believes government loans and grants should be determined on a competitive basis and therefore he has not requested that agencies approve any specific applicant," DiJulio wrote in a statement. "Coats has raised several concerns with the Department of Energy’s management of its loan programs and has requested that the department provide clearer timelines and improve its process of approving qualified loans.”