The Treasury Department, under fire for supporting General Motors’ claim that the company was paying off its government bailout with that same bailout money, is trying to set the record straight.
Treasury “never” suggested GM had repaid the bailout in full, according to an April 30 department letter to House oversight committee ranking member Darrell Issa, California Republican.
The only problem is Treasury’s evidence, which the agency helpfully attached. It’s a press release that reads: “GM REPAYS TREASURY LOAN IN FULL.”
For those who haven’t been following the situation, here’s what happened. The federal government sank $49.5 billion into GM. It now owns 60.8% of the company’s common shares and $2.1 billion in preferred shares. It was owed a $6.7 billion loan and was holding $13.4 billion in a “just in case” escrow account.
GM took taxpayer dollars from the escrow account and paid back its taxpayer loan of $6.7 billion. And voilà! Uncle Sam was off the automaker’s back, at least, that’s what they’d have you believe.
Darrell Issa, the Treasury Department’s inspector general, and others have been holding both GM’s and Treasury’s feet to the fire, claiming the two were deceptively passing off the loan repayment – in truth only a shifting of funds – as the end of the government’s involvement in GM.
Here’s what GM said in a national TV advertisement:
“I’m Ed Whitacre from General Motors. A lot of Americans didn’t agree with giving GM a second chance. Quite frankly, I can respect that. We want to make this a company all Americans can be proud of again. That’s why I’m here to announce we have repaid our government loan – in full, with interest, five years of the original schedule.”
Treasury said in its April 21 press release GM “has fully repaid its debt under the Troubled Asset Relief Program.”
Now, Treasury says it “never suggested that the loan repayment represented a full return of all government assistance.”
The April 21 Treasury press release notes that the government retains an ownership stake in the company, acknowledging the government’s continued involvement with the firm. But Issa slammed the agency for being deceptive.
“While their might exist some ambiguity within the Department of the Treasury regarding what it means to pay the U.S. taxpayers back in full, the rest of America knows better than to fall for GM’s deceptive ad campaign backed by the Treasury Department aiming to defraud the American people,” Issa said in a written statement.