Wednesday, August 8, 2012

The US auto bailout - yet more evidence of dishonesty

I've written several times before about the monumentally misguided - and mismanaged - US auto industry bailout of 2008-2010.  Amongst other problems, thousands of non-union pensioners had their pensions savagely cut by the bailout, while other (i.e. union) pensioners suffered no loss at all.

It now appears that Treasury Secretary Timothy Geithner had a great deal to do with this disparity, authorizing - perhaps even directing - the loss to non-union pensioners whilst simultaneously buttressing the position of union pensioners.  (The unions, of course, were and are among President Obama's biggest supporters.)

Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.

The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions.

The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.

Delphi, a 13-year old company that is independent of General Motors, is one of the world’s largest automotive parts manufacturers. Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.

The White House and Treasury Department have consistently maintained that the Pension Benefit Guaranty Corporation (PBGC) independently made the decision to terminate the 20,000 non-union Delphi workers’ pension plan. The PBGC is a federal government agency that handles private-sector pension benefits issues. Its charter calls for independent representation of pension beneficiaries’ interests.

Former Treasury official Matthew Feldman and former White House auto czar Ron Bloom, both key members of the Presidential Task Force on the Auto Industry during the GM bailout, have testified under oath that the PBGC, not the administration, led the effort to terminate the non-union Delphi workers’ pension plan.

“As a result of the Delphi Corporation bankruptcy, for example, Delphi and the Pension Benefit Guaranty Corporation were forced to terminate Delphi’s pension plans, which means there are Delphi retirees who unfortunately will collect less than their full pension benefits,” Feldman testified on July 11, 2012.

The emails TheDC has obtained show that the Treasury Department, not the independent PBGC, was running the show.

Under 29 U.S.C. §1342, the PBGC is the only government entity that is legally empowered to initiate termination of a pension or make any official movements toward doing so.

There's more at the link.  Bold print is my emphasis.

I hope that criminal prosecutions will result from this . . . but you and I know just how much chance that hope has of being fulfilled.  If President Obama loses this year's presidential election, I expect to see a boatload of executive pardons handed out just before he leaves office, to make sure his henchmen in arranging these (and so many other) illegal and fraudulent acts get away with their crimes.

Back in 2009 I said:

I shall never again buy any new Chrysler or General Motors vehicle or other product, unless and until the issues raised by their bankruptcies have been resolved in accordance with the current (i.e. today's) law of the land, and any and all benefits unjustly accruing or unfairly transferred to political stakeholders have been nullified and withdrawn forever.

I have, as yet, seen and/or heard nothing at all to make me change my mind.


1 comment:

perlhaqr said...

Is it sad that this is basically totally non-shocking now? Man, I thought I was cynical when I was a "disaffected youth" in my teen years. I had no idea what cynicism was.

Of course the government used tax money to pay off cronies and supporters, at the expense of people who don't visibly support them, with a healthy dose of cash for the "right people" in the organization and their friends. It basically doesn't even surprise me at all. Sure, I can recognize that it's crap, but it's just expected and there's not anything I can do about it.