Ed Whitacre, Chairman of Government/General Motors, took to the Wall Street Journal on Wednesday to crow about repaying a loan (link may require subscription). Note the deceptive headline and its accompanying end-zone dance:
The GM Bailout: Paid Back in Full
The investment of U.S. and Canadian tax dollars worked.
Whitacre can try to make a case that the government's loans have been repaid, but unless and until the government's $43 billion equity investment is recouped, the company (and Uncle Sam) have no right to claim that "the GM bailout" has been "paid back in full."
Further, this particular risible rendering in Whitacre's op-ed would lead many a casual reader (and perhaps most journalists, ha-ha) to believe that GM was able to make the repayment out of cash flow:
Our ability to pay back these loans less than a year after emerging from bankruptcy is a sign that our plan for building a new GM is working.
Really?
There are a couple of influential folks who are calling out Whitacre and GM for misleading the public. But unless you watch Fox News, follow the news at its web site, dig deeply into the Journal, or stumble across the few blogs and other web sites that have noticed, you probably have no idea what TARP Inspector General Neil Barofsky and Iowa Senator Chuck Grassley have been saying about all of this.
Grassley says that nothing of substance has transpired:
Lawmaker Calls GM Payment Misleading
A top Republican senator said General Motors' announcement this week that it will repay its federal loans early is "nothing more than an elaborate TARP money shuffle."
In a letter to Treasury Secretary Tim Geithner, Sen. Charles Grassley of Iowa said that the source of the funds for the $4.7 billion repayment is not GM earnings, but rather a Treasury escrow account. He chided GM and the White House for suggesting in recent statements that the money is from GM earnings.
Mr. Grassley wrote that GM's early repayment of the federal loan is aimed at diverting attention from another uncomfortable issue—the big break the car company would get on a proposed tax to recoup TARP losses. GM is expected to generate some of the biggest losses in the TARP program, but it won't have to pay any money under the so-called TARP tax the Obama administration wants to impose on large financial institutions.
Treasury and GM officials don't dispute that the money to repay the loan is coming from TARP funds. But they said that's been clearly disclosed.
No one on earth can possibly believe that what Whitacre wrote in his op-ed constitutes "clear disclosure."
Barofsky clearly doesn't (bold is mine):
Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout -- also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.
... But Barofsky told Fox News that while it's "somewhat good news," there's a big catch.
"I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," he said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money."
Barofsky told the Senate Finance Committee the same thing Tuesday, and said the main way for the federal government to earn money out of GM would be through "a liquidation of its ownership interest."
One would think that a big corporation seriously misleading the public might be something that would interest the rest of the establishment press. Not in this case; this is GM the apparently untouchable we're talking about.
Searches at the Associated Press's main site done at noon today on Grassley's and Barofsky's last names come back with nothing relevant and nothing relevant, respectively. I also found nothing related to the GM repayment at the New York Times (searching on Barofsky, Grassley).
An April 21-23 search on "Barofsky" at Google News returned all of 34 items after sorting by date. Only six of them relate to GM; most the rest have to do with the administration's intensely trouble mortgage assistance efforts.
The only other establishment outlet besides Fox and the Wall Street Journal to cover Grassley is the Detroit Free Press, where Justin Hyde's piece is headlined, "GOP leaders renew attacks on White House over auto industry rescue." But of course. Oh, and Hyde doesn't mention Barofsky.
The virtually free press pass given to Government Motors continues.
Cross-posted at BizzyBlog.com.
