By DANIEL HOWES
July 12, 2012
A House subcommittee investigating how Team Obama decided to foist Delphi Corp.'s salaried pension plan on the Pension Benefit Guaranty Corp. finally got its crack at three former administration officials involved in the decision.
They still won't come clean.
"It's clear from their attitude that they have no interest in telling what happened," U.S. Rep. Michael Turner, R-Ohio, said in an interview Wednesday. "We want to get the pension restored. We believe what they did was wrong and we want to prove it."
The House Oversight and Government Reform's Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs isn't getting any help from Team Obama, whose stonewalling over the handling of the Delphi pensions exposes the Big Lie in the administration's claim of transparency.
Union members fared better, the task force trio testified, defending the decision to "top up" pensions. The companies — General Motors Co., Chrysler Group LLC and Troy-based Delphi — emerged from bankruptcy stronger. The controversial auto bailouts succeeded, notwithstanding their extra-legal strong-arming of bondholders and creative interpretation of bankruptcy law.
Yes, but why did Delphi's 22,000 salaried retirees, relegated to the ministrations of the PBGC, get treated differently with their tax money than everyone else? The feds won't say, which says everything about the dirty little secret of favoritism underpinning a cornerstone of President Barack Obama's re-election campaign.
As the president and his proxies tout Detroit's auto revival in the unfolding general campaign, what they won't say is that the beneficiaries of taxpayer largesse in an auto bailout running well north of $80 billion was directly proportional to their ideological kinship and political value. A disparate collection of One-Percenter salaried retirees, even if most of them are not One-Percenters at all, doesn't qualify, but unions with their get-out-the-vote power do.
"Absolutely it was a picking of winners and losers based on the value of groups as constituencies," says Turner, a former mayor of Dayton whose father spent 42 years working for GM. "And that shouldn't happen in this country."
No, it shouldn't — but it did. The United Auto Workers and the International Union of Electrical Workers know it and have essentially said so. Members of the auto task force and the Wall Street teams who helped the companies emerge from bankruptcy know it. And a slowly emerging trove of documents looks like it might be able to prove it because the people involved won't be much help.
We learned this week that Ron Bloom, effectively the second-ranking member on the auto task force and the president's former manufacturing czar, decided not to answer two dozen questions posed by Turner in a June 2011 hearing because he "did not feel it was appropriate for me to continue to involve myself in the matter after I left government service."
Guess that settles it: Leaving a government job for a lucrative advisory role at Lazard Ltd. means it's OK to shirk accountability for your decisions. That clearly should be an acceptable explanation to the thousands of Delphi retirees whose PBGC-administered payouts were cut as much as 70 percent from their original targets. Please.
We learned that Matthew Feldman, chief legal adviser to the auto task force and now co-chairman of the business reorganization and restructuring for Willkie Farr & Gallagher LLP in New York, was a "coordinator and facilitator" between GM and the PBGC relating to Delphi pension issues.
But he didn't play a "role" in the Delphi pension decisions, he testified: "The decision that the PBGC made with respect to the pensions was independent of anything that Treasury or I had to say to the PBGC. I urged them to come to decisions in a rapid manner because it had the potential to hold up General Motors's emergence."
So as chief legal adviser to the auto task force, a creature of the Treasury Department and answerable to the president on a defining issue of his first term, Feldman "coordinated" but didn't play a "role" with the PBGC — whose governing board of directors includes Treasury Secretary Timothy Geithner and whose advisory committee includes Harry Wilson, the third task force member to testify.
An email dated July 8, 2009, obtained by congressional investigators, said Feldman "reported that he has made progress discussing our proposal with a number of key folks in Treasury and at White House, but he has not yet wrapped up his coordination."
Another email dated July 14, 2009, with the subject line "FW: Treasury/GM Counter - Delphi Status," says "Feldman will then take it to GM and get their approval, which will either be a rubber stamp or one last chance to nick us on the deal."
"What's shocking," Turner said, "is these guys show no sense of obligation to the taxpayers … or to the people who have been affected." No, they obviously do not.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.