[NEWS] California Sues Ethanol Company Over $1.7 Million Misspent Public Money
– April 22, 2016, National Law Review
On April 8, 2016, the California State Energy Resources Conservation and Development Commission (Commission) sued Mendota Bioenergy LLC, claiming it improperly spent public money targeted for equipment purchases. The bioenergy company entered into an agreement with the Commission in March 2013 to construct and operate a 10,000 ton beet to ethanol demonstration plant.
After amending the agreement, Mendota agreed to build a 2,400 ton demonstration plant with the Commission providing nearly $5 million in reimbursements, with Mendota providing the remaining $6.5 million. Mendota submitted an equipment invoice from Easy Energy Systems for $1.77 million, which was reimbursed by the Commission, but it was later discovered that the invoiced equipment was never delivered and Mendota used the $1.77 million for other expenses, not all of which were reimbursable under the grant agreement.
The Commission voted to end the grant agreement with Mendota in December 2015, and is seeking the return of public funds as well as punitive damages.