By Silla Brush - 09/09/09 10:52 AM EDT
The federal government should consider shifting its massive stakes in General Motors and Chrysler into an independent trust to provide better oversight and transparency, a government watchdog panel will report on Wednesday.
The government has supported the U.S. auto industry with more than $70 billion in bailout aid and has taken large stakes in both companies as they try to dramatically revamp their operations.
“It would send a clear message to the markets that the government was not interfering [and could not interfere] in private commerce,” the panel said in a report. A trust could also ensure decisions and shareholder votes would not be affected by “political expediency.” The panel also said that “creating a trust with timeframes could provide taxpayers with confidence that they will not still retain large ownership stakes in these companies five, 10 or 20 years down the road.”
GM and Chrysler both passed through bankruptcy proccedings this year — two of the largest in U.S. corporate history — while the American auto industry overall is undergoing a major overhaul with tens of thousands of workers being laid off and major plants closing across the country.
Sens. Mark WarnerMark WarnerNo time to relax: A digital security commission for the next generation Army posthumously awards female veteran who served as WWII spy The Hill's 12:30 Report MORE (D-Va.) and Bob CorkerBob CorkerRubio: 'Maybe' would run for Senate seat if 'good friend' wasn't McConnell-allied group: We'll back Rubio if he runs for reelection The Trail 2016: Interleague play MORE (R-Tenn.) have sponsored legislation setting up a trust to oversee the U.S. stakes in the auto industry. The panel report stops short of fully endorsing their bill, but recommends that lawmakers look into setting up a trust.
The panel report also criticized the government for not providing details about how it decided to award aid to GM and Chrysler and other parts of the auto industry and whether there was any outside involvement in the decisions.
“Simply, its disclosures did not go far enough,” the panel said.
The panel also notes that some of the more than $70 billion extended to the auto industry may never be repaid to the government. “Although taxpayers may recover some portion of their investment in Chrysler and GM, it is unlikely they will recover the entire amount,” the panel said.
The panel is led by Elizabeth WarrenElizabeth WarrenSanders: Clinton with a moderate VP would be a 'disaster' Verizon, striking unions reach agreement in principle What Bernie needs to do right now MORE, a Harvard University law professor. Rep. Jeb Hensarling (R-Texas), one of the panel's five members, dissented from the report.
Hensarling said in separate remarks that the government, “clearly picked winners and losers” by helping GM and Chrysler, and “chose not to assist other Americans that are in need.” Hensarling said “the administration used taxpayer funds to orchestrate the bankruptcies of Chrysler and GM so as to promote its economic, social and political agenda.”