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GM 'close to commiting fraud' in ad, lawmaker charges
David Shepardson / Detroit News Washington Bureau
Washington -- A senior Republican criticized General Motors Co. decision to run television advertisements featuring the company's CEO that tout its repayment of $6.7 billion in government loans.
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."
David Shepardson / Detroit News Washington Bureau
Washington -- A senior Republican criticized General Motors Co. decision to run television advertisements featuring the company's CEO that tout its repayment of $6.7 billion in government loans.
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."
Issa called on GM to stop running the television advertisements. But GM spokesman Dave Roman said the ads stopped running as scheduled on Tuesday night.
At issue is the fact that GM received $50 billion in U.S. government bailout funds -- but about $43 billion of those were swapped by the government in exchange for a 61 percent majority stake in GM.
GM had $17.4 billion of those funds in escrow -- and GM tapped unused funds from that account to repay the taxpayers for the loan portion. But it won't be clear for years whether taxpayers will be completely repaid until the government sells all of its shares in the company.
GM declined to comment directly on Issa's letter.
"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 spokesman Greg Martin said. "It's hard to see how GM's loan repayment could not be seen as a positive milestone for the company and taxpayers."
Issa argues that GM could even face lawsuits if people purchased a GM based on the advertisements.
"The American people, as the majority shareholders of GM, have a right to know the truth behind the cost of the GM bailout and GM's genuine financial condition," Issa wrote. "GM's false advertisements are counterproductive and shameful."
But another critic of GM, Sen. Charles Grassley, R-Iowa, acknowledged in a speech on the Senate floor yesterday that the GM advertisements and Treasury statements were "technically correct."
The White House has touted GM's repayment as a sign of progress.
The Treasury Department said in a letter yesterday that they repayment was a positive step -- and denied it misled anyone.
"The fact that GM made that determination and repaid the remaining $4.7 billion to the U.S. government now is good news for the company, our investment, and the American people," Herbert Allison, assistant secretary for financial stability, said in a letter
At issue is the fact that GM received $50 billion in U.S. government bailout funds -- but about $43 billion of those were swapped by the government in exchange for a 61 percent majority stake in GM.
GM had $17.4 billion of those funds in escrow -- and GM tapped unused funds from that account to repay the taxpayers for the loan portion. But it won't be clear for years whether taxpayers will be completely repaid until the government sells all of its shares in the company.
GM declined to comment directly on Issa's letter.
"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 spokesman Greg Martin said. "It's hard to see how GM's loan repayment could not be seen as a positive milestone for the company and taxpayers."
Issa argues that GM could even face lawsuits if people purchased a GM based on the advertisements.
"The American people, as the majority shareholders of GM, have a right to know the truth behind the cost of the GM bailout and GM's genuine financial condition," Issa wrote. "GM's false advertisements are counterproductive and shameful."
But another critic of GM, Sen. Charles Grassley, R-Iowa, acknowledged in a speech on the Senate floor yesterday that the GM advertisements and Treasury statements were "technically correct."
The White House has touted GM's repayment as a sign of progress.
The Treasury Department said in a letter yesterday that they repayment was a positive step -- and denied it misled anyone.
"The fact that GM made that determination and repaid the remaining $4.7 billion to the U.S. government now is good news for the company, our investment, and the American people," Herbert Allison, assistant secretary for financial stability, said in a letter
From The Detroit News: http://detnews.com/article/20100429/AUTO01/4290473/1148/rss25#ixzz0mnhZntka
I had already emailed many people about this GM ad. Most people are going to believe that they have paid the government back all the money we gave them:mad:
I had already emailed many people about this GM ad. Most people are going to believe that they have paid the government back all the money we gave them:mad:
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