Saturday, April 24, 2010

GM pays its government loan "in full" with TARP money

In a national television ad campaign launched this week, General Motors CEO Ed Whitacre looks right into the camera to tell the American people that the company has paid back its government loan "in full."  According to Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP), the claim is false and misleading. The Washington Examiner explains in an editorial today:
General Motors lost $3.4 billion in the fourth quarter of 2009 and is still struggling to reorganize so the company can try to eke out a profit. This grim reality didn't stop GM from making hay last week for supposedly paying back a $6.7 billion government loan five years ahead of schedule. What was left unsaid was that the automaker used another kitty of taxpayer cash to pay off the earlier government loan. This is an accounting shell game, not progress.

Previously unreleased documents supplied to The Washington Times reveal that GM specifically used funds it received from the Troubled Asset Relief Program to pay off the government loan. According to Neil Barofsky, the special inspector general for TARP, $4.7 billion of $6.7 billion - 70 percent - of what GM paid back came from TARP money the company received. "The one thing a lot of people overlook with this is where they got the money to pay the loan," Mr. Barofsky told Fox News' Neil Cavuto on Wednesday. "It isn't from earnings." The numbers are based on a quarterly report Mr. Barofsky's office provided to Congress last week.
Of course the Obama news media is completely ignoring the story, extending what Newsbusters calls its virually free press pass to Government Motors.  Fox News even speculates that the Federal Trade Commission may come after GM for violating its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers.  Yeah, like that's going to happen.

It's more likely that a coordinated attack will be launched against Mr. Barofsky.  Sound familiar?

The Heritage Foundation has more here.

1 comment:

  1. It's a shellgame to protect the over-priced union hacks and screw bondholders out of their money. Obama-nomics is a piece of work...