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Inspection Report: S10IS007

May 4, 2010 

Alleged Procurement Irregularities Relating to the Clean CoalPower Initiative Gilberton Coal-to-Clean Fuels and Power Project

On December 30,2009, Congressman Tim Holden wrote to the Office of Inspector General regarding alleged procurement irregularities concerning the Gilberton Coal-to-Clean Fuels Project. The letter was the culmination of a meeting and several telephonic discussions on this subject which Congressman Holden's staff initiated. Participation included congressional staff, senior representatives of WMPI PTY., LLC. (WMPI) - the lead entity in the Gilberton Project - and, the Office of Inspector General. In summary, as related in Congressman Holden's letter, WMPI claimed that a March 28,2008, meeting between Department of Energy officials and a Washington lobbying firm representing Sasol Synfuels International (Proprietary) Limited (Sasol) was the impetus for effectively terminating the Gilberton Project through the reprogramming of the Department's $100 million contribution to the Project. The implication was that the Department used the March meeting to directly or indirectly encourage Sasol to withdraw its support for Gilberton. Sasol was a key participant in the Project proposal, providing technology which, we were told, was essential to its success. The respective roles of the parties were outlined in a 2005 Memorandum of Understanding (MOU) between WMPI and Sasol.

Topic: Management & Administration