Romney secretly made millions, and his biggest donors billions, off taxpayer funded auto bailout

FacebookTwitterRedditDiggStumbleUponTumblrLinkedInPinterestEmailShare

Bain Capital photo via Boston.com

One of my favorite investigative reporters is Greg Palast. He's got a new piece up at The Nation that is a must-read. For that matter, let's hope the so-called mainstream (corporate) media reads it and blows this story up (or maybe we'll have to do that for them), because it could make a difference in the election.

It turns out that the father of the angry young man who fantasizes about slugging our president made a whole lot of money off the the very auto bailout that he objected to (remember the November 2008 New York Timesop-ed, “Let Detroit Go Bankrupt”?):

In fact, as Greg writes, Mitt and "Ann, personally gained at least $15.3 million from the bailout—and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical—more than 3,000 percent on their investment."

Please read the whole thing, but in the meantime:

One of the hedge funds profiting from that bailout—
$1.28 billion so far—is Elliott Management, directed by 
Paul Singer. According to The Wall Street Journal, Singer has given more to support GOP candidates—$2.3 million—than anyone else on Wall Street this election season. [...]

One of President Obama’s first acts in office, in February 2009, was to form the Auto Task Force with the goal of saving GM, Chrysler, their suppliers and, most important, auto industry jobs. Crucial to the plan was saving Delphi [Delphi Automotive, a former General Motors subsidiary whose auto parts remain essential to GM’s production lines], which then employed more than 25,000 union workers.

Obama hired Steven Rattner, himself a millionaire hedge fund manager, to head the task force that would negotiate with the troubled firms and their creditors to avoid the collapse of the entire industry. In Rattner’s memoir of the affair, Overhaul, he describes a closed-door meeting held in March 2009 to resolve Delphi’s fate. He writes that Delphi, now in the possession of its hedge fund creditors, told the Treasury and GM to hand over $350 million immediately, “because if you don’t, we’ll shut you down.” His explanation was corroborated by Delphi’s chief financial officer, John Sheehan, who said in a sworn deposition in July 2009 that the hedge fund debt holders backed up their threat with “an analysis of the cost to GM if Delphi were unwilling or unable to provide supply to GM,” forcing a “shutdown.” It would take “years and tens of billions” for GM to replace Delphi’s parts. At that bleak moment, GM had neither. The automaker had left the inventory of its steering column and other key components in Delphi’s hands. If Delphi laid siege to GM’s parts supply, the bailout would fail and GM would have to be liquidated or sold off—as would another Delphi dependent, Chrysler.

Rattner could not believe that Delphi’s management—now effectively under the hedge funders’ control—would “want to be perceived as holding GM hostage at such a precarious economic moment.” One Wall Street Journal analyst suggested that Singer was treating Delphi “like a third world country.” Rattner likened the subsidies demanded by Delphi’s debt holders to “extortion demands by the Barbary pirates.” [...]

In their 2011 and 2012 Federal Financial Disclosure filing, Ann Romney’s trust lists “more than $1 million” invested with Elliott. This is the description for all of her big investments—the minimal disclosure required by law. (Had Romney kept the holding in his own name, he would have had to reveal if his investment with Singer had made more than $50 million.) [...]

To invest in Elliott is essentially a “Delphi play”: that is, investing with Singer means buying a piece of the auto bailout.

Please share this one with everyone you know.

FacebookTwitterRedditDiggStumbleUponTumblrLinkedInPinterestEmailShare