Fed Audit Reveals Tax-Payer Backed Battery Factory Hasn’t Produced or Sold a Single Battery Since Awarded Fed Grant in 2009
A taxpayer-backed battery plant in Holland, Mich., made headlines last year after it was discovered its employees were being paid to do nothing.
Now LG Chem Michigan Inc., a subsidiary of South Korea’s LG Group, is back in the news after it was revealed Wednesday that it has not produced or sold a single battery since being awarded a $150 million federal grant in 2009, according to a new report by the Energy Department’s Inspector General.
Not a single one.
“LG Chem Michigan … [is] likely to miss the grant’s May 2013 deadline for completion,” Nextgov reports. “What’s more, the project created fewer than half of the projected 440 new jobs anticipated by proponents.”
One of the reasons LG Chem Michigan hasn’t had any success in sales is because it was created with the idea of supplying GM with batteries for what ended up being a unpopular vehicle: The Chevy Volt. Also, GM long ago decided to purchase its battery cells from LG Chem’s facilitates in South Korea instead of the one based Michigan.
The plant was also awarded more than $175 million in state and local tax relief.
President Barack Obama gives Gov. Jennifer Granholm a hug as LG Chem Ltd. Chairman Bon-Moo Koo, left, watches (AP)
LG Chem Michigan used large portions of its federal grant to pay employees who, in turn, watched movies and played cards because there was no work to be done.
“We found that work performed under the grant to LG Chem Michigan had not been managed effectively,” writes Gregory Friedman, the DOE inspector general.
“Our review revealed that LG Chem Michigan inappropriately claimed and was reimbursed for labor charges incurred by a variety of supervisory and staff employees for activities that did not benefit the project,” Friedman adds.
The Department of Energy reimbursed the company for what it now calls “questionable labor costs incurred” in Q3 2012. The inspector general was unable to “calculate the exact loss to the government because LG Chem Michigan did not track labor activities in detail,” the Detroit Free Press notes.
“However, based on LG Chem Michigan employee revelations, we believe it is likely that the total amount of charges that included at least some non-productive work exceeded $1.6 million, about $842,000 of which was reimbursed in accordance with its cost-sharing arrangement for the project,” the report stated.
Here are some of the other findings included in the report (via DFP):
- The plant has not yet made battery cells that could be used in electric vehicles sold to the public.
- Only about 60% of the capacity agreed to when the grant was received was constructed even though nearly $142 million of $151 million of the Energy Department’s share of the project’s funding had been spent.
- LG Chem Michigan officials estimated the government would need to spend $22 million more to complete the five production lines called for in the agreement, an amount that would significantly exceed the remaining funds available.
- LG Chem Michigan had significantly underestimated labor costs.
- Documentation to support the grant indicated that production of battery cells would transition from LG Chem’s South Korean facility to the Michigan plant beginning in 2012, but that didn’t happen.
- Less than half of the 440 expected jobs had been created to support the project.
- The period of performance for the grant runs through May 2013. Yet, the expected benefits of the project are not likely to be realized within the originally anticipated timeframes.
Shortly after the federal audit, LG Chem Michigan released a statement saying it would reimburse the government $842,000 for labor costs.
“The company says it is taking steps to prevent such actions in the future and to comply with rules for use of federal grant money,” WKZO reports. “LG Chem says it is aware of concerns that the Holland plant has not produced batteries, but it is still committed to the future of the facility.”
The U.S. Department of Energy Office of Inspector General declined to comment on the audit, citing instead its status as being independent from the DOE. A spokeswoman directed TheBlaze to the DOE’s main office for further comment.
Neither the DOE nor LG Chem’s U.S. headquarters immediately responded to a request for comment Thursday afternoon.
Attempts to contact the Hollande, Mich., plant were met with busy signals.
President Obama greets workers in 2010, at the groundbreaking ceremony at LG Chem Michgan Inc., then known as Compact Power Inc., a battery plant in Holland, Mich. (Susan Walsh/AP)
Readers may recall that President Barack Obama in 2010 visited the electric battery plant to promote his administration’s clean energy agenda.
“Our goal has never been to create a government program, but rather to unleash private-sector growth,” Obama said. “And we’re seeing results.”
“This is a symbol of where Michigan’s going. This is a symbol of where Holland is going. This is a symbol of where America is going,” he added.
Take from that what you will.
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Comments (93)
Gonzo
Posted on February 14, 2013 at 3:01pmHey Barry, let’s make a deal. Give me $50 mill and I won’t make any batteries either. You can then claim you made a $100 million cut to the budget! Win/Win, right buddy?
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LakeHartwellSailor
Posted on February 14, 2013 at 3:08pmI’m on board with that. Let’s go into a partnership and create an LLC, Gonzo and up it to $100 million. Then the King With No Clothes can claim $347 million cut (using his method of math) to the deficit. And claim 785 thousand jobs were created.
I already have a design for the battery. It looks like this……
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T-2
Posted on February 14, 2013 at 3:27pmThat explans why Michelle looks angry all the time. She has no batteries.
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Ben__Franklin
Posted on February 14, 2013 at 3:39pmOh…Oh…Oh….Gonzo, I want hired.
Lake you are a much better Engineer than me. My battery was a used shoebox. I figured with all the wives we would be set.
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Ben__Franklin
Posted on February 14, 2013 at 3:42pmT-2
Moooochelle carries her cellphone on vibrate in her Koochie, that’s who Berry was texting during the Docs Speech.
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Jim S
Posted on February 14, 2013 at 4:30pm..and The American Cancer Society and every medical school/research facility have failed to cure a single cancer…and we have been funding them for half a century with taxpayer funds. We are “detecting” cancers sooner but are we living longer? 30 years ago a 66 years old female is diagnosed with breast cancer and dies at age 70, five years survival rate is zero. In 2012 a female is diagnosed with breast cancer at 64, treated and dies at age 70. The five year survival rate is 100 % and….she dies at age 70…no one lives longer. I appreciate the battery story, it’s one of 100s where govt. force ably takes our money and gives it to other people…what’s new ? Barry continues a long tradition of wrongheaded Congressional approved spending…ask Senator Paul about his state’s pork :)…but you’re raising the question..just don’t limit yourself to Barry or Ds..the Rs managed to piss away as much as any liberal…we must stop it all ..we need to cut 30% of Federal spending..that includes the military…
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dosdelgados
Posted on February 14, 2013 at 4:36pmBen, that explains why she eventually stopped clapping.
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JRook
Posted on February 14, 2013 at 5:17pmgood thing beckett never cherry picks stories. he obviously takes his queues from the fox fair and balanced crew.
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Gonzo
Posted on February 14, 2013 at 5:39pmSorry guys, I can’t afford to cover your health insurance. It’s going to be a one man show.
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Fubared
Posted on February 14, 2013 at 5:46pmRookie so the story is false? Where are your GM dividends? Solyndra is super huh? MB in bidness mgmt is behind 0′s name huh?
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MDECKER
Posted on February 14, 2013 at 7:46pmI’ll make none for 48 million!
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Anamah
Posted on February 14, 2013 at 9:59pmCould I participate too??? Please Barry,you are so generous using our tax payers money, wasting stupidly the money we even do not have in things we do not need!!! So many millions, billions and trillions making a huge colossal debt for us our children our grandchildren, and grand grand children will never, ever achieve to pay. Until when do you think are you going to be applauded? The low informed Americans, the brainwashed from our perverted education system, the commies teachers unions and professors, who had and still are indoctrinating American children, and all the bribed journalists and corrupted mainstream media, and your fanatic zombies applauding each stupidity you spew before and after each lie. You in ritualistic mode, in your perpetual campaigning against the ghosts you feed……Hopefully this designed America bankrupt won’t be free at the end, for you. One day all responsible are going to pay for this disaster. Justice must be applied.
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Mil Mom
Posted on February 14, 2013 at 11:40pm@Gonzo
Posted on February 14, 2013 at 5:39pm
Sorry guys, I can’t afford to cover your health insurance. It’s going to be a one man show
***
Hey, never mind a job, I’ll freelance on your advertising, but you’ve got to name your product line “Gonzo-berries” .How about we advertise you as the “Invisible battery for the invisible car” and sell them in color schemes to match b o ‘s clothes. Of course you’ll have to pay yourself union wage to get the grant, and we’ll see if I can get my own DOE grant to sell your invisible product. Maybe he’ll help you build another plant somewhere that you can fly to in order to oversee their invisible production (by his reckoning that’d combat global warming). Just imagine how that will cut the deficit, and of course by then I’ll have a PSA to help him announce it.
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punyhuman
Posted on February 15, 2013 at 2:30amHey, I can produce nothing for less than half what LG did, and I’m Canadian. I only mention that because of the likelihood of foreign aid.
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desertspeaks
Posted on February 15, 2013 at 3:21pmand AGAIN, NO ONE WILL GO TO PRISON!!! No money will be recovered!
This is maddening!
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RedHarley
Posted on February 15, 2013 at 5:35pm“This is a symbol of where America is going,”
Even the low information types that support this fool should be able to understand this.
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GuruMeditation
Posted on February 14, 2013 at 2:59pmShameful.
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hauschild
Posted on February 14, 2013 at 2:58pmI ask you which is worse; this company and the crony capitalism, or the fact that half the citizens of this country would see absolutely nothing wrong with this???
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nzkiwi
Posted on February 14, 2013 at 3:17pmTo amplify your point, here is something that arrived in my email this morning (from Wealthwire, I think).
I was dumbfounded.
If you are wondering where Mr Obama ot his votes from, well, here you are…
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nzkiwi
Posted on February 14, 2013 at 3:19pmAnd now I give you the link…
https://fbstatic-a.akamaihd.net/rsrc.php/v1/y2/r/5l8_EVv_jyW.swf?v=10200197848930023&ev=0
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clodius
Posted on February 14, 2013 at 3:20pmThere are three people on the other side of my cubicle wall that could explain how this is a good use of taxpayer money.
If Bush had done this of course it would be another sign his is the biggest moron in the history of the planet.
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13th Imam
Posted on February 14, 2013 at 3:34pmNZ
She is a Village
What difference does it make?
It is so
The Jews did it
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RJJinGadsden
Posted on February 14, 2013 at 4:57pmNZKIWI, Thanks for providing that link, and you sir are so correct in your assessment. It is dumbfounding, but you as well as many of the rest of us know just which trolls here will agree with her. “Somebody” (else) needs to be held accountable for her (self made) situation.
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txswalker
Posted on February 14, 2013 at 2:58pmAnd now he wants to pour more money into these wasteful green energy jobs( according to his state of the union). This is but 1 of about a dozen massive failures…nice stratigy
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13th Imam
Posted on February 14, 2013 at 3:05pmTaxpayers money is like Kim- Chhee thru a goose.
Obama’s a thief and murderer
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love the kids
Posted on February 14, 2013 at 2:54pmAnd Obummer touts things like this as a success. Let’s get this straight, A car get’s designed and built that very few want, and the company that builds it, basically goes bankrupt from producing products that nobody wants. So the Federal Govt. steps in and bails out that company, so now it has to give money to a company that produces parts for that same car that nobody wants. I’m sure that company also got local tax breaks that the taxpayers in that state had to make up. Also, they have to tax the rich to pay for the subsudies to these companies that nobody wants in the first place.
They are also subsudizing windmills that are raising ground temperatures and killing hundreds of thousands of birds that cause farmers to double the pesticides that they use.
Doesn’t any of this sound like his tax policies???
Report this comment
Mil Mom
Posted on February 14, 2013 at 11:58pm@love the kids
Posted on February 14, 2013 at 2:54pm
And Obummer touts things like this as a success. Let’s get this straight, A car get’s designed and built that very few want, and the company that builds it, basically goes bankrupt from producing products that nobody wants. So the Federal Govt. steps in and bails out that company, so now it has to give money to a company that produces parts for that same car that nobody wants. I’m sure that company also got local tax breaks that the taxpayers in that state had to make up. Also, they have to tax the rich to pay for the subsudies to these companies that nobody wants in the first place.
They are also subsudizing windmills that are raising ground temperatures and killing hundreds of thousands of birds that cause farmers to double the pesticides that they use.
Doesn’t any of this sound like his tax policies???
***
Nope, sounds like an application for a DOE grant subsidy to me! Remember the economy is moving money around from hand to hand as long as each one pays a portion to the government. Pelosi would say it creates jobs. (Green jobs of course!)
Report this comment
calebjim
Posted on February 14, 2013 at 2:51pmThis entire program to produce batteries is a waste of tax payers money. It was just another way for Obama to spend money. Battery powered items are into the future. I will believe in battery power when Obama flies from Washington to California in Air Force 1. He will never admit that this project was a failure.
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Anonymous T. Irrelevant
Posted on February 14, 2013 at 2:38pmI wonder how much of that $150 million got laundered and bundled back into Zero’s campaign fund?
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Cavallo
Posted on February 14, 2013 at 2:46pmThe bundlers got the donations first, then bobo funneled tax dollars in greater amounts back to them. I have no doubts the process repeated several times.
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RJJinGadsden
Posted on February 14, 2013 at 2:55pmANONYMOUS T. IRRELEVANT, I’m sure there was a specified percentage to all of these companies who received such special treatment and funding that had to be returned in those bundles.
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dinker
Posted on February 14, 2013 at 3:21pmI’m glad that someone, besides me, wonders where all of this so called “GREEN” money has gone!
There is approx. 32 green businesses that WENT BANKRUPT as there is no market for it. Obommie said on TV that “YOUR ENERGY COSTS WILL NECESSARILY SKYROCKET”! And why would that be Mr. President the interviewer should have asked?!?
This green crap is so phoney that it is laughable if it wasn’t so serious. How can the U.S. be the only ones responsible for GLOBAL WARMING when China, Russia and India, plus others are NOT!
Don’t these clowns realize that their pollution is our pollution and unless we stop the whole world from producing green house gasses it makes no difference what we do! And by the way Al—the only things that controls the temp. on Earth is the SUN stupid!! And that the Earth warms and cools ALL BY ITSELF—IN CYCLES!!
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JacquesChirac
Posted on February 14, 2013 at 6:24pmObama said…
“This is a symbol of where Michigan’s going. This is a symbol of where Holland is going. This is a symbol of where America is going,” he added.
Wow…straight from the horse’s…mouth…
We’re so screwed…
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ginger100
Posted on February 14, 2013 at 2:33pmI wonder how much was donated back to the prezzies reelection campaign?
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huey6367
Posted on February 14, 2013 at 2:32pmReagan: Government isn’t the solution to your problems. Government IS the problem.
Case in point
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Xiccarph
Posted on February 14, 2013 at 2:32pmIsn’t the Green Agenda a wonderful thing for America? Doing great, isn’t it? How many more of these wasted projects are hovering just below the waves, unseen??
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civilwarcometh
Posted on February 14, 2013 at 2:37pmI’m more worried about how their brainwashing our children….http://www.prisonplanet.com/the-social-engineering-of-texas-cscope-curriculum.html
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baron94
Posted on February 14, 2013 at 2:53pmDidin’t you hear, this is Obama’s new green energy program – burning our tax dollars (greenbacks). Just don’t breath the fumes.
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love the kids
Posted on February 14, 2013 at 2:56pmI think that the “Green” stands for “Government Dollars”
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ColoradoMaverick
Posted on February 14, 2013 at 2:31pmI’ll bet a real investigation will show that political donations from the people receiving this tax payer money was made to Democrats and Obama.
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MuddyWaters
Posted on February 14, 2013 at 2:31pm“unpopular” chevy volt. That’s the real folly here. Wasnt this vehicle the poster child for Obama’s “saved” auto industry? GM (whose CEO is a major Obama donor) purchased half of the cars produced. Theyre sitting in a warehouse somewhere. GM choosing to buy the batteries from the Korean plant is icing on the cake.
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UNALIEN
Posted on February 14, 2013 at 2:25pmFascism doesn’t repeat but it sure does rhyme
UNALIEN
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Ghandi was a Republican
Posted on February 14, 2013 at 2:24pmWhy would you spend the money to produce batteries you cannot sell and nobody wants or needs? THAT IS NOT THE BUSINESS YOU ARE IN. The minute you’re business becomes “Government grants” your whole profit structure changes”. Why produce anything except concepts? You can then get more Government grants much easier than producing expensive batteries that no one will buy.
You got your hooks into the politicians who must keep you solvent with MORE government grants. THEY will come to YOU.
It’s a business plan. It has nothing to do with imaginary batteries.
Report this comment
chips1
Posted on February 14, 2013 at 2:22pmIf only they could make 4 small batteries, they could be inserted when Obummer leans forward. Makes for a new sex toy.
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Ghandi was a Republican
Posted on February 14, 2013 at 2:34pmHe’s already has the Guinness of all buttplugs. You’ve seen him walk. His lips are purple for crying out loud.
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Anonymous T. Irrelevant
Posted on February 14, 2013 at 3:00pmLol!
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perry1980
Posted on February 14, 2013 at 2:21pmAnd Obama wants us to trust him to “Invest” in jobs, Invest in growth, Invest in technolgy, Invest in whatever he sees fit………..I don’t think so
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lovenfl3
Posted on February 14, 2013 at 2:26pmExactly!
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progressiveslayer
Posted on February 14, 2013 at 2:21pmYou mean to tell us there’s fraud waste and abuse in a worthless government program? This is shocking indeed and an investigation is warranted post haste. Nothing will come of this or the scores of other criminal deeds this regime has committed and we all know it. There’s enough dirt on this POS fraud president to keep him in prison for three lifetimes yet congress does nothing to protect and defend the constitution.
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ArmedAndReallyPissed
Posted on February 14, 2013 at 2:37pmI wonder if a Civil War would help to make a real change in this Kountry ?
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armyofnibiru
Posted on February 14, 2013 at 3:55pmdi commes are makin dir move capin.be dey dems ir repubs.
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Mil Mom
Posted on February 15, 2013 at 12:09am@progressiveslayer
Posted on February 14, 2013 at 2:21pm
You mean to tell us there’s fraud waste and abuse in a worthless government program? This is shocking indeed and an investigation is warranted post haste. Nothing will come of this or the scores of other criminal deeds this regime has committed and we all know it. There’s enough dirt on this POS fraud president to keep him in prison for three lifetimes yet congress does nothing to protect and defend the constitution.
***
Maybe he can campaign for his 3rd term from a certain Carnival Cruise Line Ship, I understand the present voyage has already begun decorating in his favorite theme and color scheme, should be ripe to begin campaigning as soon as they install the batteries this plant hasn’t produced. You already have to hold your nose to listen to the ___ coming out of his speeches.
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barber2
Posted on February 14, 2013 at 2:19pmJust another Democrat boondoggle that will never get any serious attention in the MSM.
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momrules
Posted on February 14, 2013 at 2:37pm………..but that drink of water that Rubio took was worth all the talk of the mental giants with the MSM.
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UNALIEN
Posted on February 14, 2013 at 2:18pmsoylent green jobs
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RR1
Posted on February 14, 2013 at 2:17pmSo we are propping up failing companies, and letting good companies fail.
Something is wrong there
http://www.dailyjobcuts.com
-
Report this comment
Cavallo
Posted on February 14, 2013 at 2:53pmIf I wasn’t paying for this crap, it would be hysterical. It’s not surprising though. It’s sadly typical.
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AUsername
Posted on February 14, 2013 at 2:17pmobama giving his Manchurian candidate friends tax payer money to lose.
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ricckky
Posted on February 14, 2013 at 2:12pmWhen are we going to some how impeach this no good ba—t—rd liar out of office–Is there any one with any guts that can start the ball rolling!!!–He is a thief a liar and most of all not an American!!!!!!
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dinker
Posted on February 14, 2013 at 3:36pmWE ALL NEED TO PUT PRESSURE ON OUR ELECTED OFFICIALS TO IMPEACH HIM!!
Maybe when it comes out that the Benghazi scandal and coverup was really about this Adm. was/is running munitions from Libya on ships to Turkey then to the rebels in Syria WHO ARE al QAEDA!
Isn’t that aiding and abetting the enemy and isn’t that an impeachable offense?!?
Fast and Furious was probably giving 2500 high power weapons to al Qaeda who are already in Mexico!?! Is that one of the reasons why they want want to limit OUR ABILITY to defend ourselves?
IT’S HARDER TO CONTROL AN ARMED PEOPLE THAT IT IS TO CONTROL AN UNARMED PEOPLE!
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mikem1969
Posted on February 14, 2013 at 2:11pmImagine that another little hitler payoff and no surprise, no product.
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mcsledge
Posted on February 14, 2013 at 2:11pmLeave it to Barry to come up with the most unprofitable investments known to man.
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KalanVA
Posted on February 14, 2013 at 2:10pmSo which family member of Congress, Governor, or White House did the American taxpayers make millionaires? We would like to know the relationships and names. Thanks for all of your investigative reporting.
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KalanVA
Posted on February 14, 2013 at 2:16pmIf the private sector did this the executive staff and board would be in jail. These people should be locked up… theft, mismanagement of funds, etc.
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