WASHINGTON – A123 Systems Inc., the electric-car battery producer, received a U.S. Energy Department grant payment of almost $1 million on the same day it filed for bankruptcy last month.

The $946,830 payment was part of $115.8 million the firm, based in Waltham, Mass., received from U.S. economic-stimulus funding to spur development of electric cars. The full grant, including funds to come, was $249.1 million.

Republican Sens. Charles Grassley of Iowa and John Thune of South Dakota disclosed the timing of the payment Friday when they released a Nov. 14 letter from Eric Pyenson, A123 vice president and general counsel.

The payment was made after A123 in August announced it planned to give Wanxiang Group Corp., China’s largest auto-parts maker, a majority stake in exchange for financing. Grassley and Thune had questioned the Chinese investment in the U.S. company.

“All of this paints a disturbing picture,” Grassley and Thune said in an emailed statement. “The Department of Energy is writing checks to a company literally as it is declaring bankruptcy.”

The letter’s release adds to Republican criticism of President Barack Obama’s support of green-energy programs that included loans and grants to produce more fuel-efficient cars. Republican presidential candidate Mitt Romney said during a debate that Obama picked “losers” to receive energy aid.

“The Energy Department takes its responsibility to be good stewards of the taxpayers’ money very seriously,” said Bill Gibbons, a department spokesman. “Funds are only disbursed to a company for work already completed toward the ultimate goal of the department’s grant.”s assets.

 


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