House investigation: Treasury, Obama officials ‘clearly involved’ in decision to terminate non-union Delphi retirees’ pensions
Powerful House Ways and Means Committee chairman Rep. Dave Camp announced Wednesday morning that documents his committee obtained prove political appointees in President Barack Obama’s administration were “clearly involved” in the decision to terminate 20,000 non-union Delphi salaried retirees’ pensions during the 2009 auto bailout.
“Treasury was clearly in the center of the decision to terminate the pensions of Delphi’s salaried workers,” Camp said in a release. “Instead of withholding important documents, Treasury should release all documents without further delay and give these hardworking Americans answers as to why Treasury believed they were not entitled to their full pensions. I have serious concerns about this Administration picking winners and losers in Delphi’s bankruptcy.”
The finding directly contradicts the testimonies of several Obama administration and White House officials, and means several communications the Treasury Department sent to Congress may have been false.
In a press release, Camp’s committee said that the Pension Benefit Guaranty Corporation (PBGC) provided “what appears to be a nearly complete response” to his document request but Treasury “provided an incomplete response” and the White House provided nothing but “claimed Treasury was responding on its behalf.”
During the auto bailout, a decision was made to terminate the pension plans for 20,000 non-union autoworker retirees from auto parts manufacturer Delphi. While those non-union retirees lost significant portions of their pensions, healthcare and life insurance benefits from this deal, their union brethren saw their benefits completely topped up.
For years since, the Obama administration has claimed the PBGC made the decision and it was in no way involved in it at all. Email evidence TheDC obtained and published in early August shows that’s not the case.
Camp’s Ways and Means investigation is one of three ongoing House investigations into the scandal. His launched after TheDC’s discovery of the new evidence, as did the House Education and Workforce Committee’s reignited investigation into the ordeal. The House oversight committee has been investigating the scandal, too.
With the announcement of the preliminary findings of his investigation, Camp released a series of documents that have never before been public about the scandal and a timeline of events putting the matter in context. One new email was from senior PBGC official Joe House to senior Treasury officials James Lambright and Michael Tae on Feb. 10, 2009.
In the email – ahead of a meeting the following morning Treasury had scheduled with Delphi’s CEO John Sheehan – House wrote to the Treasury officials that he wanted “to provide a high-level refresher on PBGC’s perspective on the Delphi situation.”
“Delphi has proposed that GM also take on the pension liabilities for the Hourly and Salaried plans,” House wrote, in part, to the Treasury officials. “In discussions with Delphi and directly with PBGC, GM has stated that it can not assume responsibility for either the previously-agreed-to Hourly plan pension obligations or the Delphi’s Salaried plan pension obligations, as doing so would represent taking on additional pension obligations in violation of the pension covenant in GM’s TARP loan.”
In addition to proving Treasury’s intimate involvement in this decision-making process, this email also shows officials had considered topping up the Delphi salaried retirees’ pensions too. The Ways and Committee said the Treasury Department withheld this email from Congress in its document production, too, and was only provided to the committee from the PBGC.
Another email shows that as late as May 28, 2009, those involved in the deal still considered treating Delphi salaried retirees the same as union workers.
The committee said these documents contradict Treasury’s repeated claims that it “did not authorize, approve, or consent to the PBGC’s determination to terminate either pension plan.”
“Seeking to minimize its apparent involvement, the agency claimed that ‘Treasury played an advisory role only’ in PBGC’s ‘independent’ decision,” the Ways and Means Committee release said. “The limited documents already provided to the Committee do not support Treasury’s claim of non-involvement.”
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