Internal emails: Treasury officials held 2009 backroom bailout meeting on Delphi pension plans
Internal Treasury Department emails obtained by The Daily Caller show that in June 2009 a high-ranking Treasury official planned a backroom meeting to discuss the pension plans for 20,000 nonunion Delphi salaried retirees.
Those retirees lost between 30 and 70 percent of their pensions, as well as their healthcare, life insurance and other benefits. Unionized employees working alongside them, however, saw their pensions and benefits made whole.
The Obama administration has blamed this decision on the Pension Benefit Guaranty Corporation (PBGC), a federal government agency that handles private-sector pension benefits issues. But these internal emails indicate the Treasury Department was involved to a greater degree than the administration has conceded publicly.
“Anything new on the PBGC front regarding Delphi?” General Motors official Walter Borst wrote in an email to Treasury officials Matt Feldman and Harry Wilson on June 9, 2009.
“I am meeting with them tomorrow and will have more to report after the meeting.” Feldman replied to Borst, copying Wilson.
Although Treasury officials have pointed to the PBGC during congressional testimony as the decision makers, this correspondence indicates the agency’s involvement in the decision to terminate the pensions.
“Have you guys begun a dialogue with the UAW over your desire to see the hourly plan terminated?” Treasury’s Feldman wrote in another email to GM officials on June 30, 2009, copying Wilson.
“One concern I have is that while the PGBC [sic] is likely to agree to terminate, it’s not clear what position they will take on the Benefit Guaranty. At a minimum this could get messy and the UAW should probably be brought into the loop.”
Borst responded that GM had not “begun any conversations with the UAW pending hearing back from you and the PBGC. We can begin that dialogue but our reading of the benefit guarantee is clear that it’s for the benefit of the retirees and not the PBGC.”
GM’s understanding that “you [Treasury] and the PBGC” would jointly communicate with the automaker about the Delphi pensions is significant. Only the PBGC is legally permitted to make a move toward discontinuing a public benefit pension plan.
Feldman replied with an acknowledgement that it was Treasury, not the PBGC, that was calling the shots. (RELATED: House investigation finds Treasury, Obama officials “clearly involved”)
“Keep in mind we need the PBGC’s help to terminate this plan so we will have to deal with the PBGC,” Feldman wrote. “If you think there is a way to cause its unilateral termination (outside of Delphi going down an 1113 process) let me know.”
A Section 1113 process involves a debtor in bankruptcy that seeks a court’s approval to reject an existing collective bargaining agreement with a labor union.
The email chain was titled “Delphi Hourly Plan.” Delphi’s unionized hourly retirees originally saw their pension plans terminated together with the nonunion Delphi salaried retirees’ plans in a process that commenced on July 31, 2009.
Later, in September 2009, the union retirees’ plans were topped up while nonunion retirees’ plans remained terminated.
These emails contradict July 2012 congressional testimony Feldman gave during an investigation by the subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs.
“As a result of the Delphi Corporation bankruptcy, for example, Delphi and the Pension Benefit Guaranty Corporation were forced to terminate Delphi’s pension plans,” Feldman told Congress. “Which means there are Delphi retirees who unfortunately will collect less than their full pension benefits.”
“The decision that the PBGC made with respect to the pensions,” Feldman continued in his testimony, “was independent of anything that Treasury or I had to say to the PBGC. … “I was not a decision-maker.”
Neither Wilson or Feldman has responded to The Daily Caller’s request for comment
A total of three committees have investigated the Delphi Corporation bankruptcy, starting with the House Oversight Committee. When TheDC published emails in August that documented a greater degree of Obama administration involvement, the House Ways and Means Committee launched its own investigation. (RELATED: Emails show Geithner, Treasury drove cutoff of nonunion Delphi workers’ pensions)
The House Education and Workforce committee rekindled a long-dormant investigation as well. (RELATED: Obama admin threatened with subpoenas for details on Delphi pensions)
The Treasury Department has stonewalled all three committees, prompting each to threaten Treasury Secretary Timothy Geithner with subpoenas.
House Ways and Means Committee chairman Rep. Dave Camp has asked President Obama to clarify whether he plans to assert executive privilege over the documents. (RELATED: Congressional leaders tell Obama to turn over documents or claim executive privilege)