Tuesday, June 12, 2012

Great moments in the history of Bailout Nation


Recall how creditors, pension plans and bondholders got shoved to the back of the line behind the auto unions in the GM and Chrysler bankruptcy cramdowns of 2009. One of those groups, Delphi Salaried Retirees Association was none to pleased that they got virtually pennies on the dollar in the proceedings and decided to sue the entity overseeing the bankruptcy divvie-up and, finally, 3 years later have received the documents they requested so that they could proceed with their suit.

It's a rare day in the nation's capital when news comes that somebody has received 62,000 documents concerning one of the federal government's most expensive and controversial programs of the past decade.

But that's what happened today as the Delphi Salaried Retirees Association (DSRA) announced that it received the "first tranche" of documents from the Pension Benefit Guaranty Corporation (PBGC) concerning the government's conduct in the termination of the former auto parts company's pension plan.

The 62,000 documents were actually delivered last Thursday, but DSRA only announced their receipt today. The PBGC has promised the group delivery of a second similarly sized batch of documents by the end of this month, according to DSRA.

The documents were sought by DSRA after it sued PBGC following its 2009 termination of the pension plan, as part of the government's bailout of General Motors, Chrysler and other elements of the auto industry in Detroit. The termination reduced the pension payments of many DSRA retirees by as much as 70 percent, according to the group.

The document delivery comes nearly two years after a federal judge ruled that DSRA should be allowed to proceed with discovery in its litigation against PBGC. The group sued PBGC because it believed pensioners' rights under the Employee Retirement Income Security Act of 1974 (ERISA) were violated.

It's called transparency, dontcha know?

"Having already reviewed more than 100,000 pages of discovery from non-governmental parties involved in the matter, the retirees are confident they can prove the PBGC illegally terminated the Delphi salaried retiree pension plan in 2009 under pressure from President Obama’s Auto Task Force, which reported to the U.S. Treasury Department," DSRA said in its statement today.

The Treasury Department's congressionally appointed Special Inspector General for the Troubled Asset Relief Program (TARP) under which the auto bailout was funded has also said it believes members of the task force intervened with PBGC in the Delphi pension termination.

The IG, Neal Barofsky, did yeoman's work as the auto bailout watchdog. It will be interesting to see if he testifies on behalf of the plaintiff.

The DRSA document delivery is just one of several transparency issues that have arisen in the wake of the auto bailouts, which began under President Bush in 2008 and were expanded in 2009 by President Obama.

“Given the president’s statement on his first day in office that ‘transparency and the rule of law will be the touchstones of this presidency, why did we have to pry this information out of a government agency led by an Obama appointee?” said Dennis Black, DSRA's chairman in the group's statement.

“Our legal bills are several million dollars to get to this point. Citizens shouldn’t have to hire lawyers to fight against taxpayer-paid lawyers just to find out how and why onerous government policy decisions were made,” he said.

Welcome to our post-constitutional republic, Mr. Black.

As we followed the auto bailout, we will be following this post-bailout trial. We look forward to seeing what was really happening behind the scenes and how much traction this gets just 5 months in front of the election.



B-Daddy said...

The entire auto bailout was an affront to the rule of law, beginning to end. That any sunshine should fall on this cesspool of cronyism is a miracle, but also a testament to how close we are coming to dictatorship. Obama must be defeated. Even if he doesn't personally want to be a tyrant, his actions are setting the stage through his profligate usurpation of authority.

Anonymous said...

B:i don't think any tyrant sees themselves as such.

but sociopaths have a weird correlation with self delusion.