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 WarnerOvernight Cybersecurity: DNC hackers also targeted French presidential candidate | Ex-acting AG Yates to testify at Senate Russia hearing Schumer: Senate Russia probe moving too slowly Senate Intel Dem has ‘serious concerns’ on Russia probe MORE (D-Va.) and Bob CorkerBob CorkerThe Hill's 12:30 Report Senate Foreign Relations chair: Erdogan referendum win 'not something to applaud' Groups warn of rural health 'crisis' under ObamaCare repeal 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 WarrenSenate votes to confirm Rosenstein as deputy attorney general Warren on Coulter: 'Let her speak' Balanced regulatory reform the only realistic solution to CFPB divisiveness 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.”