Hearing Today Will Shed Light on Negative Implications of General Motors Bailout
Washington, D.C., June 22, 2011 – Today, the Subcommittee on Regulatory Affairs will hold a hearing on the “Lasting Implications of the General Motors Bailout.” This hearing will not only cover the bailout’s total cost, but it will also address the extent to which GM and the Obama Administration misled the public regarding what the cost would be. In fact, according to recently-released documents acquired by the Competitive Enterprise Institute’s FOIA request, the Obama Administration was complicit in deceiving taxpayers regarding the auto bailout.
In May 2010, after GM launched a misleading advertising campaign regarding the bailout, CEI filed a deceptive advertising complaint with the FTC, and GM shortly thereafter stopped running the ads. CEI also filed a Freedom of Information request with the Treasury for documents on the ad campaign. Those documents reveal, among other things, that the Obama Administration and GM coordinated a PR campaign, that was later proven to be deceptive.
Written Statement from Hans Bader, Senior Attorney at the Competitive Enterprise Institute
Recently, journalists criticized the Administration for deceiving the public about the extent to which Chrysler had repaid taxpayers for its bailout: “Glenn Kessler, who writes the Fact Checker column for the Washington Post, recently awarded the President ‘three Pinocchios’ (out of four) for his claim that ‘Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency.’”
But this is not the first time such deception has occurred. Last year, lawmakers like Senator Grassley, the TARP Inspector General, and financial journalists criticized General Motors’ advertising campaign claiming to have paid back taxpayers for its bailout, noting that GM had used government bailout money (from a TARP escrow account) to repay $6.7 billion of the $50 billion it had earlier received from taxpayers. Shortly after GM’s ad campaign began, the Treasury Secretary trumpeted GM’s claim that it had paid back taxpayers, even though former auto czar Steve Rattner later admitted that this claim was somewhat misleading.
From documents recently-released under the Freedom of Information Act, it is now clear that Administration officials had advance notice that General Motors would run those deceptive ads claiming to have paid taxpayers back for its bailout, and did not object to those ads despite having the opportunity to do so. In short, Secretary Geithner publicly repeated GM’s deceptive claims, even though the Treasury Department had weeks in which to review GM’s claims and discover that they were misleading, and their misleading nature was readily obvious to others, like the TARP inspector general, members of Congress, and business reporters.
Treasury Department Documents released last week in response to CEI’s Freedom of Information Act request illustrate this. Those documents illustrate that GM and the Obama Administration conferred extensively on GM’s PR strategy regarding the company’s controversial TV and print ad campaign in 2010, in which GM misleadingly claimed to have repaid what it received from taxpayers. In those ads, GM’s then-CEO, Ed Whitacre, claimed GM had already repaid its government bailout loan “in full, with interest, five years ahead of schedule.”
Read Bader’s entire statement here.
See also:
Delayed Release of Auto Bailout Documents by Treasury Dept. Reveals Cozy PR Relationship
General Motors Accused of Fraud Over Misleading Claim That It Paid Back Taxpayers; CEI Files FTC Complaint by Hans Bader
The truth behind Chrysler’s fake auto bailout pay back, by Conn Carroll for the Washington Examiner