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Republicans call for investigation into political favoritism in auto restructuring

By: Susan Ferrechio
Chief Congressional Correspondent
June 3, 2009

Two top House Republicans are calling for an investigation into the Obama administration's handling of the way Chrysler and General Motors filed for bankruptcy.

Reps. Jeb Hensarling, R-Texas and Spence Bachus, R-Ala., say some stakeholders were given preferential treatment by Obama's Auto Task Force in the restructuring of the two auto giants and they want the House Financial Services Committee to hold oversight hearings.

Spencer is the top Republican on the panel and Hensarling is the ranking member on one of its subcommittees.

Some small bondholders have been critical of the restructuring deal, saying the United Auto Workers union walked away with a much better deal after agreeing to forgive some of the debt owed by the carmakers to their healthcare fund.

"The possilibity that some have been unfairly treated raises a far bigger concern that the government's handling of the GM and Chrysler restructuring may have serious, long-term consequences for our capital markets if investors and creditors conclude that careful expectations built on the fixed bedrock of our laws can be set aside by government fiat," Hensarling and Bachus said in a letter to Financial Services Committee Chairman Barney Frank, D-Mass.

"Chairman Frank should join with Ranking Member Bachus and me to ensure that taxpayer dollars were not used to give preferential treatment to the administration’s political allies," Hensarling said. "If investors perceive that political might, rather than the rule of law, governs the financial markets, it will greatly discourage further participation in our markets, extending our economic downturn."

Hensarling is also the lone Republican lawmaker on the Congressional panel overseeing the $700 billion in government funds giving last fall to the GM, Chrysler and the ailing financial sector. Hensarling said that panel will hold an oversight hearing in July that will investigate the favoratism claims by the bondholders.



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Reader Comments

All comments on this page are subject to our Terms of Use and do not necessarily reflect the views of the Examiner or its staff. Comment box is limited to 250 words.

Mike

Jun 4, 2009

It's about time!

 

Hater

Jun 4, 2009

Whats sad is that the Unions played a HUGE roll in the collapse and now they are the big winners in the bailout....

This is what is so wrong with this country and DC today...

 

Texasgirl

Jun 4, 2009

Finally someone is doing something! Get the FBI involved and bring the obama corruption down! Don't forget to bring down acorn to!

 

MikeMca

Jun 5, 2009

Both of these bankruptcies are legal disasters that need to be stopped. A bankruptcy court is required to follow the rule of law, whether Obama or anyone else has been mucking around with the details, and neither of these are.

Both bankruptcies need to be thrown open, all agreements arranged by Obama and company trashed, and begin again at the beginning. That is the only way that all of the parties, not just the UAW, will get what they deserve.

whioe they are at it, someone needs to investigate how Fiat got into the deal. How could Obama give Chrysler 30 days to conclude a deal with Fiat that permits them to buy assets valued at $18MM for $2MM.

Someone has be have been paid off! And, we to know who that is.

 

KJW

Jun 5, 2009

FINALLY IS RIGHT! I am so glad to see our Republicans FINALLY getting their heads out of their rumps and taking a stand for US!
I think most of what is happening right now with this administration is completely illegal!
I don't care what party you belong to it is our children's future at stake. WAKE UP PEOPLE...GO VOTE!!!

 

tucanofulano

Jun 5, 2009

Somebody explain how it might be possible for these failures in Congress believe they are qualified to run a vehicle manufacturing plant. Barney Frank, among other featherheads in D.C. ruined the USA car industry by tacking their notions concerning what they (but not the American car-buying public) onto otherwise legitimately based laws The persons in government have zero expertise running anything,let alone the largest most complex manufacturing operations. Had the current bunch of nincompoops and anti-Americans been running things in the early 1940's we'd all be speaking German today.

 

David

Jun 5, 2009

If we continue down this path we will all need wheel barrels to carry enough money to the store to pick up our Goverment made bread!!!

 

haskell

Jun 5, 2009

Please see the review in today's Wall Street Journal: "Barney Frank, Car Czar". "The latest self-appointed car czar is Massachusetts's own Barney Frank, who intervened this week to save a GM distribution center in Norton, Mass. The warehouse, which employs some 90 people, was slated for closure by the end of the year under GM's restructuring plan. But Mr. Frank put in a call to GM CEO Fritz Henderson and secured a new lease on life for the facility."

 

unhappywastatevoter

Jun 6, 2009

My bet is nothing will be done. We are stuck until at least 2010. We have e-mailed, faxed, called, and begged our congressmen to stop all this spending. They continue to vote for it and support Obama. Unless the media turn against the administration (like they did Bush) nothing will change any sooneer.

 

Bob

Jun 6, 2009

The bigger picture is the fact that the constitution does not give the federal government the authority to give tax money to private companies.

 

sus

Jun 6, 2009

Bob, How do you think the railroads were built? 80% of Fortune 100 companies have received help at some point in time.

 

Pa.

Jun 7, 2009

so as far as UAW is concerned. it's every union for himself? You get bailout money & continue to work as long as company dangles a carrot its all good. Explain the forgiveness part on health fund.

 

Jcoff

Jun 7, 2009

The entire Administration (BHO and Congress) are thieves and liars. Every last one of these corrupt, self serving (*) s should be in jail for fraud and treason.

 

Hit-em-Barack

Jun 7, 2009

Gotta love it. These part time patriots who are really partisan hacks only care about American when the hurt is being laid on by a Democrat.

When GOP had the reigns they could not care less if the government's policy would lead to massive job losses. They did not care that Bush borrowed money to pay for tax cuts.

They did not care that the Constitution was being pimped. No Siree Bob.

They were too scared to care. They all have big speech but as soon as a towel wearing fanatic raises their head they run for cover. Now they have found a target in Barack. If only you were this passionate in the past, then we would not have to deal with Barack.

I call that justice...

 


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