The government’s bailout of the automobile industry was rife with cronyism that bagged Obama bundlers and Administration insiders millions and left taxpayers holding the bill.
That’s the conclusion Government Accountability Institute President Peter Schweizer reached when he investigated little-known details surrounding the Obama Administration’s auto bailout, an action President Barack Obama touts as one of his most sterling presidential achievements.
The government’s actions involving Chrysler resulted in a net loss to taxpayers of $2.9 billion, and the government is currently sitting on a $14.5 billion loss for its actions involving General Motors. But Mr. Schweizer says few Americans realize the backroom deals the Administration cut that created a flood of cash for well-connected Obama cronies.
For example, the GM bailout was handled not by automotive experts but by New York investment firm Evercore Partners. The firm is headed by Obama bundler and former Assistant Treasury Secretary Roger Altman and Obama mega fundraiser Ralph Schlosstein. GM paid Evercore $46 million in advising fees and billed the car company another $17.9 million for a “success fee,” despite the fact that Evercore never found GM a purchaser or funder.
Those driving the auto bailout also tossed workers under the bus, writes Mr. Schweizer in the Washington Times:
When it came to making financial decisions affecting the automotive bailout, insiders and favorites made out well and outsiders were left outside. Nonunion workers saw their pensions go bust. The financiers on the Auto Task Force in Washington shafted 22,000 salaried retirees out of their pensions. Why? Those salaried retirees of the former Delphi Corp. (a longtime GM parts supplier) had a fairly solid pension fund, which was 85 percent funded.
Mr. Obama justifies his actions because he claims his actions installed a spare tire on the auto industry that will keep automobile jobs in America. But Mr. Schweizer says that’s not the case. Indeed, “General Motors is selling more vehicles in China, not creating jobs in this country,” writes Schweizer. “GM is planning hundreds of new dealerships in China and also expanding production there.”
Far from saving auto worker jobs, says Mr. Schweizer, Mr. Obama’s bailout of the automobile industry resulted in a massive pay day for Mr. Obama’s fundraisers and friends. “Call it what it was: a boon to well-connected cronies who knew nothing about the automobile industry or its workers but were more than happy to send the invoice to taxpayers for shoddy repairs.”