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Obama: Destroyer of Non-Union Pensions
Posted By Arnold Ahlert On August 9, 2012 @ 12:40 am In Daily Mailer,FrontPage | 12 Comments
Add another burgeoning Obama administration scandal to the pile of scandals afflicting this administration. The Daily Caller’s Matthew Boyle is reporting that they have obtained a series of emails showing the U.S. Treasury Department, with Timothy Geithner in the lead, “was the driving force” behind terminating the pensions of 20,000 salaried retirees at Delphi, one of the world’s largest auto parts manufacturing companies. The move was made during the Chrysler/GM auto bailout of 2009, and it appears the sole motivation behind it was crassly political: these particular Delphi retirees were not members of an organized labor union. Delphi’s unionized workers ”saw their pensions topped off and made whole.”
The Caller notes that the emails “contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures,” and also “indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.”
In July, UAW negotiator Ron Bloom, former Treasury official and task force legal adviser Matthew Feldman and former task force member Harry Wilson, all of whom were appointed by President Obama to his Presidential Task Force on the Auto Industry, appeared before the House Committee on Oversight and Government Reform’s Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs. Prior to that hearing they had refused to cooperate for over a year with a congressionally mandated investigation by Christy Romero, the special inspector general for the Troubled Asset Relief Program (TARP). The likely reason they did so: Romero had no subpoena power.
During the hearing they were asked–under oath–what role the task force played regarding pensions. All three men dodged many questions from the Committee, but eventually Bloom and Feldman insisted the task force was nothing more than a neutral “facilitator” of decisions made entirely by other entities. They did this despite the fact that the Committee had two emails written by Feldman, one saying he was convinced GM would “rubber stamp” the administration’s preferences on the deal–and the second saying he had discussed the deal with the White House.
Boyle corroborates White House involvement, having unearthed an email chain between Feldman and Pension Benefit Guaranty Corporation (PBGC) staffer Joseph House indicating the PBGC “believed it needed to clear decisions and action plans through senior administration officials,” despite the reality that PBGC’s charter calls for independent representation of private-sector pensioners. In fact, federal labor law makes PBGC ”the only government entity that is legally empowered to initiate termination of a pension or make any official movements toward doing so.”
Furthermore, an email sent by House to several fellow staffers, as well as David Burns, then a principal at the finance restructuring firm Greenhill & Co., and Bradley Robins, Greenhill’s head of Financing Advisory and Restructuring for North America, is particularly damning. In it he reveals that Feldman “reported that he has made progress discussing our proposal with a number of key folks in Treasury and at [the] White House, but he has not yet wrapped up his coordination. He indicated that there is an 8 am call tomorrow that he’ll use to close the communication-loop, and he’s confident he’ll have a fully-vetted Treasury view after that call.”
Feldman has not responded to Daily Caller requests for comment. But Treasury spokesman Matt Anderson insists that “termination of the Delphi salaried pension plan was made by the PBGC in accordance with its standard procedures and applicable laws–not by Treasury,” he wrote, responding to the Caller in an email. “Although the Delphi bankruptcy was very difficult for its employees and retirees, the actions Treasury took to support the American auto industry helped save more than a million American jobs during a period of economic crisis.”
Other emails contradict Anderson. An email dated Thursday, April 2, 2009, shows House discussing a meeting he and his PBGC staffers anticipated attending the next day with the entire auto bailout team. House emailed Karen Morris and Michael Rae, saying that the “agenda” for Friday’s meeting “is everything–lead off with Chrysler, then we’ll get into GM/Delphi.”
Ms. Morris also wrote an email earlier on Friday, indicating that the PBGC would “probably get invited to the Monday meeting at (Friday’s) meeting,” and that the Monday meeting would involve “talks” on the GM and Delphi portions of the bailout plan. Yet after Friday’s meeting, House emailed an update to Morris and another PBGC staffer named John Menke. “We’ve been disinvited,” he wrote. “It’s for the best.” Morris sent a reply asking, “who uninvited us?” “Treasury,” House responded.
Boyle notes that it is “unclear” if there were additional meetings during which the Delphi pension plan was discussed, and whether or not PBGC staff were invited to attend them. But if Treasury officials discussed that pension plan at the initial meeting without a PBGC representative in the room, that means it is likely the aforementioned federal law was violated.
The 20,000 Delphi workers who lost up to 70 percent of their pensions have filed their own lawsuit against the PBGC. As of June, more than 20 months after Federal U.S. District Judge Arthur Tarnow ordered that salaried retirees of auto parts maker Delphi Corp. were entitled to conduct discovery in their lawsuit, the PBGC finally released 62,000 pages of emails and documents. Dennis Black, chairman of the Delphi Salaried Retirees Association, was hardly overjoyed. “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. Black further noted that, having reviewed more than 100,000 pages of discovery from non-governmental parties involved in the matter, the retirees can prove the PBGC engaged in illegal activity in denying them their pensions–including how the Auto Task force schemed with union bosses over which pension obligations the “new” GM would decide to honor.
As for Tim Geithner’s role in these proceedings, the idea that he remained a neutral force defies credulity. In addition to his role as Treasury Secretary, Geithner co-chaired the Auto Task Force, and served as a board member of the PBGC. Last January Rep. Michael Turner (R-OH) called attention to this obvious conflict of interest, echoing the General Accounting Offices’s (GAO) concern with Geithner’s “multiple roles” in the process. Yet like much of what goes on with this administration, this was yet another story that saw little daylight in the mainstream media.
Whether that will change remains to be seen. Despite the death of Border Agent Brain Terry and a contempt of Congress charge levels against Eric Holder, the media’s calculated disinterest in the Fast and Furious gunrunning scandal remains steady. Yesterday, Senior White House advisor Valerie Jarret ignored questions about the emails unearthed by the Daily Caller, even as the president continues to campaign on how his administration “saved” the auto industry, despite the reality that taxpayers are still on the hook for around $35 billion.
In an update to his piece, Boyle reveals something that many Americans have come to expect from this president: Barack Obama will say anything to get elected–and then do pretty much what he wants, even if he completely contradicts himself in the process. Boyle refers back to a statement made by the president during the 2008 election campaign. “Right now, bankruptcy laws are more focused on protecting banks than protecting pensions,” Obama said then. “And, I don’t think that’s fair. It’s not the America I believe in. It’s time to stop cutting back the safety net for working people while we protect golden parachutes for the well-off. If you’ve worked hard and played by the rules, then you’ve earned your pension. If a company goes bankrupt, then workers need to be our top priority, not an afterthought.”
The only “priority” for this administration are constituencies, like organized labor for example, willing to further Obama’s agenda, often by any means necessary. Everyone else, including the 20,000 non-union Delphi workers who had their pensions snatched out from under them, is an “afterthought.” Once again this administration is involved in something that reeks of scandal. And once again, it is likely that nothing will come of it prior to the election.
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