FedUpUSA

Rep. Darrell Issa (R-CA) to GM on bailout shell game: “dangerously close to committing fraud,” “you might have colluded with the U.S. Treasury to deceive the American public”

As I reported several times already, the Obama administration, through its appointed CEO Ed Whitacre delivered a blitzkrieg of public advertising with supposed good news in claiming that GM had paid off its government TARP loan 5 years early and with interest. The intellectually non-curious MS regurgitated the talking points with nary a question. I had one one though – how could a company that hadn’t posted a profit since 2004 pay back anyone a single red dime? In fact, I was the first blogger, to my knowledge, to pose that GM paid back its government loan with other government loan money. Here are the hard facts as I have reported before:

1. There were essentially 2 bailout accounts, one an $8 billion loan and the other a $49.5 billion escrow account (like a line of credit), both from TARP funds
2. GM used the escrow TARP funds to pay the TARP loan
3. GM did this to get another $10 billion loan from the Department of Energy (see update on this post)

The FTC might get involved. Rep. Darell Issa of California is one of very few legislators that are essentially calling the shell game what it is – fraud, the other f-word. From The Detroit News: GM ‘close to commiting fraud’ in ad, lawmaker charges

…Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee, said in a letter obtained by The Detroit News today to GM chairman and CEO Edward Whitacre Jr. that the company “has come dangerously close to committing fraud and that you might have colluded with the U.S. Treasury to deceive the American public.”

GM’s ads featured Whitacre touting that fact that GM “repaid our government loan in full, with interest, five years ahead of the original schedule.”

Of course, GM declined to comment on Issa’s letter, but spokesman Greg Martin said that “our work is not finished, but repaying our loans with interest is a clear sign that our plan is working, and a critical step toward returning GM to profitability and public ownership.” GM hasn’t made a red cent in profit since 2004. Issa went so far as to argue that GM could face lawsuits if people purchased a GM vehicle based on the commercial. He also called the commercial “counterproductive and shameful.” The White House, of course, touted GM’s repayment as a sign of progress, ignoring the clear fact that they paid off one credit card with another credit card.

Related is this from Instapundit today:

TOM BLUMER: Fun with Numbers: GM ‘Payback’ of Taxpayer Loans. “Taking money from one bailout kitty to pay back another bailout fund.”

When I talked with Mark Tapscott yesterday, he called those GM bailout-payback commercials the most dishonest claims he’s seen in 30 years of covering politics and the auto industry. “It is a lie.”

UPDATE: A related video via Gateway Pundit:

h/t TheBlogProf

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