Grassley presses official to ensure repayment of GM bailout

Sen. Chuck Grassley (R-Iowa) wrote a special inspector general on Friday to press for assurances that the government was ensuring the largest repayment possible of its investment in General Motors.

Grassley, the ranking Republican on the Senate Finance Committee, wrote TARP Inspector General Neil Barofsky about the government's plan to maximize its return on the $49.5 billion investment it made in GM last year as the rebounding automaker prepares its IPO.

"Taxpayers have an enormous financial stake in GM," Grassley wrote in a letter. "Accordingly, I request that your office determine whether Treasury and GM are taking the steps necessary to ensure that the IPO results in the highest possible return for the American taxpayer."

Grassley's been a persistent monitor of the government's actions last year to bail out GM and Chrysler, both of which went through a supervised bankruptcy financed from the $700 billion bailout fund approved by Congress in 2008.

Most Republicans have long criticized the auto bailouts, while President Obama has held up his action to rescue the failed companies as one of the biggest successes of his administration. Obama traveled to the companies' plants in Detroit to tout the successes, and GM announced a second quarter profit earlier this week.

A Treasury spokesman said that the Obama administration remained comitted to keeping lawmakers apprised of progress on GM.

“We'll continue to provide regular updates to Congress and oversight bodies on issues related to the taxpayers’ investment in GM, as we have throughout this entire process," said Treasury spokesman Mark Paustenbach. "We remain focused on disposing of our investment in GM as soon as practicable in a manner that protects the taxpayer.”

Grassley asked Barofsky to analyze the value of GM's initial public offering (IPO) and determine how much stock the government must acquire in order to avoid a loss on the initial investment into the company. (The government maintains a 61 percent equity stake in the automaker.)

A Treasury aide emphasized that the government would exercise its rights as a shareholder and without interfering with the company's decisionmaking.

The Iowa Republican also said he wanted answers on how many transaction costs related to the IPO would be reaped by investment banks.

"Hopefully, when the dust settles, the taxpayer will not have lost billions of dollars on GM," he said. "In the interest of transparency and accountability, it is essential that American taxpayers know whether they are getting a fair deal on the GM IPO and how large a financial loss they are likely to suffer."

Updated 4:30 p.m.