By Jay Heflin - 08/26/10 01:15 PM EDT
Rep. Maxine Waters (D-Calif.) is sharply criticizing the Treasury Department and the Securities and Exchange Commission for excluding minority- and women-owned firms from taking part in the sale of General Motors common stock owned by the Treasury.
Treasury obtained the stock as a result of the government bailout of General Motors. It owns about $43 billion in GM stock.
Waters, who is preparing for an Ethics committee trial based on allegations she offered improper help to a minority-owned bank where her husband was a stockholder and former board member, said the lack of minority firms is particularly troubling because foreign institutions are taking part in the sale.
"The exclusion of minority- and women-owned firms is even more troubling in light of the fact that non-U.S. institutions — Barclays Capital, Credit Suisse Group, Deutsche Bank, RBC Capital Markets, and UBS — have also been given underwriting responsibilities," she wrote Wednesday to Treasury Secretary Tim Geithner and SEC Chairman Mary Schapiro.
"Reconcentrating assets in these same financial institutions contradicts the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which included provisions to address financial institutions that are 'too big to fail.'"
Waters urged the Treasury to add minority- and women-owned firms to the list of companies that can sell the stock.
"The Treasury should have the ability to influence this transaction at all levels and should demand diversity and diversification of and among participating institutions," she wrote, adding, "I hope you will take immediate steps to correct this oversight."
GM last week began the process of selling stock that will help it repay the $43 billion still owed to the government for the $50 billion bailout. The stock sale must raise $70 billion for the company to pay off all stakeholders, including the government.