Shocker: TARP funds went to unworthy companies
Image via Wikipedia
Sit down, reader. A new Congressional panel report questions the need for the Treasury Department’s $17.2 billion bailout of GMAC, a global financial services company (formerly a part of General Motors) in 2008 and 2009.
The government “might have been able” to arrange a strategic bankruptcy for GMAC, as it did for General Motors and Chrysler, preserving its automotive lending arm while dealing with the mortgage lending operations that brought it down, the panel found.
In one passage, the report concluded that GMAC became “one of the five largest wards” of the government even though it was “a company that apparently posed no systemic risk to the financial system, that did not seem to be too big to fail, too interconnected to fail, or indeed, of any systemic significance.”
Shocking, I know. That is, until one remembers this:
GMAC has spent nearly $1 million during the first three quarters of this year to lobby the very federal government it’s begging for our greenbacks, a Center for Responsive Politics analysis finds. That’s on top of the $5.46 million it spent on federal lobbying efforts in 2008, shortly after it peeled away from former parent company General Motors — itself formerly bankrupt, bailed out by taxpayers and still on quite a federal lobbying clip. The U.S. House, U.S. Senate, Treasury Department, Government Accountability Office and Federal Deposit Insurance Commission are among the governmental agencies and entities GMAC has this year lobbied.
Check out how lobbying spending shot up in ‘08 when GMAC really needed that sweet taxpayer cash. [Image from Open Secrets]
And then there are the donations made to politicians from General Motors (which is ranked a “heavy hitter,” meaning a “heavy-spending donor” by the Center for Responsive Politics,) which owned GMAC until 2006:*
GM sold GMAC to Cerberus Capital Management, a private equity arm of Citigroup AKA another huge player in the world of lobbying and legal bribing.
Wait a second! So you’re telling me that if a company spends lots of money lobbying and bribing politicians, then those politicians shape policies that favor those companies??
Why, that seems absolutely crooked!
Right.
Spending around $7 million for a $17 million return doesn’t seem like the worst investment in the world. Actually, it seems like a pretty awesome deal. Too bad taxpayers can’t get in on that action.
* Update: An earlier version of this article included a graph citing figures from 2002. Apologies for the confusion.
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peanuts, compared to what the insurers are paying to “buy” their politicians
“Spending around $7 million for a $17 million return doesn’t seem like the worst investment in the world.”
Actually, given that I’m pretty sure the bailout is a loan (albeit a low-interest one with really nice terms) this does sound like a pretty shitty investment — almost in the loan-shark category.
Spending around $7 million for a $17 _billion_ return, on the other hand — which is what they actually did — sounds like a freaking great investment.
[...] version of this article included a graph citing figures from 2002. Apologies for the confusion. True/Slant | Allison Kilkenny | Thu, March 11, 2010 Last 5 posts in EconomyUnemployment up in 30 [...]
When do we change the word lobbying to bribing. Won’t change anything, but at least we’ll be honest about the whores who run our country.
Exactly. I see nothing wrong with lobbyists waving money around. We already know most lack morals. It’s the act of politicians accepting that money does it then establish bribery. I look at it as a test of their representative integrity, of which they repeatedly fail.
A good politician would test their writing skills and require lobbyists to provide a paper in APA style. Limiting the number of pages to explain their case based on the number of citizens they represent. In this case GMAC would get up to say, 7 pages. Then limit submission to one paper per quarter and make the paper publicly available so it can be reviewed by others.
Unfortunately something like that would never happen.
In response to another comment. See in context »Probably around the same time we start slitting the throats of the oligarchy that have robbed us of our democracy. Also, I just fell in love with you for writing this.
In response to another comment. See in context »[...] "Shocker: TARP funds went to unworthy companies#," is by Allison Kilkenny – Unreported at True/Slant (3/11/10). [...]
[...] use of TARP funds. And here at True/Slant, Allison Kilkenny demonstrates that they had pretty good reason for that skepticism, Wait a second! So you’re telling me that if a company spends lots of money [...]
[...] use of TARP funds. And here at True/Slant, Allison Kilkenny demonstrates that they had pretty good reason for that skepticism, Wait a second! So you’re telling me that if a company spends lots of money [...]