Press Release

For Immediate Release
June 1, 2009

Contact: Joe Brettell
(202) 225-3484

Hensarling Calls on Congressional Oversight Panel to Investigate GM Bankruptcy

WASHINGTON — Congressman Jeb Hensarling, the lone sitting Member of Congress on the Congressional Oversight Panel for TARP and the top Republican on the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit released this statement after General Motors filed for bankruptcy.

“It is indeed a sad day for GM workers, management, investors and American taxpayers.

“I am sorry to see General Motors fail, but what makes it worse is that the government recklessly spent $20 billion of taxpayer money before finally conceding bankruptcy that was inevitable. In December I called for the automakers to be placed into Chapter 11 reorganization, so that crippling union contracts could be reworked and poor management could be dismissed. Now, not only are taxpayers funding this government bailout – their money is possibly being used to reward political allies of the Obama Administration like the United Auto Workers over and above other workers who relied upon GM for their 401k accounts.

“The manner in which the Department of Treasury and the Obama Administration has handled bankruptcy negotiations for both Chrysler and GM raises serious questions. Therefore, I am calling on the Congressional Oversight Panel for TARP to uphold its oversight responsibility and bring transparency and taxpayer accountability to this process. Among my many questions:
  • Have investors either been intimidated by the Administration or incented with massive taxpayer funds to accept the Administrations reorganization plan?
  • Are TARP funds being used not for purposes of economic stability, but to advance the Administrations social and economic agenda?
  • Are TARP funds being used to benefit or favor political allies of the Administration?
  • Are taxpayers being adequately protected when their debt is being converted into equity?
  • What is the exit strategy for the Administration that will now be the majority shareholder of General Motors?
“It is just these kinds of questions that the panel was created to investigate. The panel will be negligent in its duties if it chooses to ignore these issues.

“I recently led a group of my colleagues in Congress in calling on the Treasury to bring equity and fairness to the bankruptcy negotiations. We outlined our concerns about the way the Administration was running roughshod over the rights of bondholders – the same bondholders whose tax dollars will now finance the government takeover of GM. Many of these bondholders are working families, who invested their college funds, pensions and hard earned dollars to invest in an American company. 

“If the Congressional Oversight Panel for TARP fails to investigate the manner in which the TARP program has been used in the automaker deals, I fear they have abdicated their oversight responsibility and become yet another congressional advisory panel. $50 billion has now been spent on GM alone – taxpayers deserve to know that their money is being used in a transparent and ethical fashion; not shrouded in secrecy under threat of political retribution.”
 
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