We Need Accountability for the GM Loans
Twenty Republican colleagues and I wrote a letter to President Obama Wednesday asking him to provide a full accounting of the taxpayer loans to General Motors. The Obama Administration’s $49.5 billion bailout of GM will most likely result in massive losses for taxpayers. As shareholders, taxpayers should know what kind of losses to expect. Following is the letter sent to the president.
Dear Mr. President:
Last December, the U.S. Treasury Department loaned General Motors $13 billion. In the spring, Treasury loaned GM another $6 billion. In June, days before GM declared bankruptcy, the Administration provided another $30billion- just in time toconvert taxpayer loans to equity taking ownership of GM.
All of these funds came from the Troubled Asset Relief Program - a bailout never intended for such purposes. As the Congressional Oversight Panel wrote last month, "the use of TARP funds for the automotive industry raises questions regarding both Presidents' authority to use these funds under EESA legislation and, more broadly, under the U.S. Constitution."
Last week, Steve Rattner, your former "Car Czar," estimated that the taxpayers' stake in GM now stands at $25 billion. If Mr. Rattner is correct, the Administration's "Bridge Loan to Nowhere" lost half of the taxpayers' money. And while sales for private-owned Ford Motors fell only 6% in September, government-owned GM saw a 45% decline.
Despite your Administration's pledge of transparency, this "Bridge Loan to Nowhere" comes with none. American taxpayers remain in the dark when it comes to basic details of $49 billion in taxpayers' money provided to GM. How much should taxpayers expect to lose from the "Bridge Loan to Nowhere?" When will we see the minutes from Automotive Task Force meetings? When will we see all financial and operating information for GM- at the same level of detail that shareholders of any other major company would expect?
As the American people struggle through the Great Recession, they deserve better than a $25 billion loss in a non-transparent investment.