Respectfully submitted by Lawrence Rafferty (rafflaw)- Guest Blogger
If he said it once, Mitt Romney has said it a thousand times. President Obama should have let GM and Chrysler go bankrupt instead of “bailing” them out. (paraphrased) Of course, the discussion usually revolves around how Unions allegedly made out like bandits in the bailout to the detriment of the country and our economy. What has been selectively left out of the discussion was the role played in the bailout by vulture capitalists in reaping an enormous profit from the bailout. According to Greg Palast, the bailout created an opportunity for the vultures to swoop in and make huge profits. All at tax payer expense!
The most prominent venture capitalist who was involved in the bailout bonanza was Elliott Management and its leader, Paul Singer. Mr. Singer and Elliott Management had many prominent investors, including Ann and Mitt Romney. “But Romney has done a good job of concealing, until now, the fact that he and his wife, Ann, personally gained at least $15.3 million from the bailout—and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical—more than 3,000 percent on their investment.” TruthOut.Org
You read that correctly. Mr. Romney and his wife “earned” at least $15.3 million from the bailout because of Singer and Elliott Management’s involvement and ownership of a key supplier to GM and Chrysler. That key supplier was Delphi Automotive. Delphi was originally a subsidiary of GM, but it became a separate company in the late 90’s before filing bankruptcy in 2005. When the government task force began working on the bailout of GM and Chrysler they came face to face with the hungry venture capitalists that now controlled Delphi.
“Obama hired Steven Rattner, himself a millionaire hedge fund manager, to head the task force that would negotiate with the troubled firms and their creditors to avoid the collapse of the entire industry. In Rattner’s memoir of the affair, Overhaul, he describes a closed-door meeting held in March 2009 to resolve Delphi’s fate. He writes that Delphi, now in the possession of its hedge fund creditors, told the Treasury and GM to hand over $350 million immediately, “because if you don’t, we’ll shut you down.” His explanation was corroborated by Delphi’s chief financial officer, John Sheehan, who said in a sworn deposition in July 2009 that the hedge fund debt holders backed up their threat with “an analysis of the cost to GM if Delphi were unwilling or unable to provide supply to GM,” forcing a “shutdown.” It would take “years and tens of billions” for GM to replace Delphi’s parts. At that bleak moment, GM had neither. The automaker had left the inventory of its steering column and other key components in Delphi’s hands. If Delphi laid siege to GM’s parts supply, the bailout would fail and GM would have to be liquidated or sold off—as would another Delphi dependent, Chrysler.
Rattner could not believe that Delphi’s management—now effectively under the hedge funders’ control—would “want to be perceived as holding GM hostage at such a precarious economic moment.” One Wall Street Journal analyst suggested that Singer was treating Delphi “like a third world country.” Rattner likened the subsidies demanded by Delphi’s debt holders to “extortion demands by the Barbary pirates.”
Romney has slammed the bailout as a payoff to the auto workers union. But that certainly wasn’t true for the bailout of Delphi. Once the hedge funders, including Singer—a deep-pocketed right-wing donor and activist who serves as chair of the conservative, anti-union Manhattan Institute—took control of the firm, they rid Delphi of every single one of its 25,200 unionized workers.” TruthOut.org
Does it surprise you that Elliott Management ended health insurance for its retirees and actually forced the Pension Benefit Guaranty Corporation to pick up the $7 Billion corporate pension shortfall in 2009 when it ended paying pensions to its workers? Would it also surprise you that Delphi is no longer incorporated in the United States and has only 5,000 employees in the country while there are almost 100,000 workers worldwide? Doesn’t this kind of job flight to other nations become a foreign policy issue at some point?
According to the Palast article, the Romneys could have profited as much as $115 Million from the auto bailout, depending on the exact amount of their investment with the Singer led hedge funds. I have no problem with investors making money on the risk they take in taking over troubled companies. However, I do have a problem with these very same venture capitalists profiting from taxpayer money while at the same time sending thousands of jobs overseas.
I guess only politicians and vulture fund owners can argue that the country should not bail out large corporations in order to save millions of jobs and actually profit untold millions from that very same bailout! Wouldn’t this bailout windfall be another reason to demand that the Romneys disclose more tax returns? Could this windfall profit be one of the reasons why the Romneys did not disclose any 2009 tax returns? What do you think?
Additional reference: Truthout.org; Democracy Now
I think there was a professor of statistics and mathematics at U’Penn who did a study and came out in 2006 saying that the chances of the vote having been honestly recorded and reported in 2004 were something like one in 1.5 billion.
And that was on a clear day!
Both are hypocrites……
Great article raff…… I think the point the myopic see or don’t depending on the partisan position….. Is that both ate hypocrites….. No one gives a damn if someone makes a profit on an investment….. But to benefit from something and then be a critic on the same thing make you less than honorable….. Then again lots of folks here do the same, so what do you expect……
jongrif851 1, October 21, 2012 at 6:31 pm
Dear Dredd,
… HOW do we overcome this manipulation …. We could be headed towards another Gore v. Bush with the same unfortunate results !!!!
I am truly scared of a Romney Presidency — and I am a Vet of 24 years ….
Supposedly OHIO early voting has a reported 2 to 1 advantage for the Prez vs. Romney but that happened in 2004 for John Kerry as well before Rove intervened and magically shifted the vote count to Bush.
Why isn’t anyone calling this an obvious conflict of interest if Romney thru Bain owns this Voter Counting entity???
And why isn’t this getting greater coverage in the media??
Hopefully Obama will bring all this out tomorrow night !!!!
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“Voters decide nothing, those who count the votes decide everything.” – Joseph Stalin
I would expect the high priced execs at GM to know better than to single source key parts of their cars.
Quit yer belly-achin’. Romney’s entitled don’t cha know.
Dear Dredd,
Stories like this and also how because Exit Polling has been “shut down” in 19 states leave the door open to exceptional voter fraud orchestrated by that GREAT AMERICAN (NOT !!!) “I never met a dirty political trick I did not like ….” KARL ROVE.
Rumor has it that because of the lack of exit polling Rove may be able to
“RED SHIFT” (yes, that’s the term …) MILLIONS of Votes to Mittens in these 19 states.
So, now that SCOTUS has opened the proverbial Barn Door and left it open ,
HOW do we overcome this manipulation …. We could be headed towards another Gore v. Bush with the same unfortunate results !!!!
I am truly scared of a Romney Presidency — and I am a Vet of 24 years ….
Supposedly OHIO early voting has a reported 2 to 1 advantage for the Prez vs. Romney but that happened in 2004 for John Kerry as well before Rove intervened and magically shifted the vote count to Bush.
Why isn’t anyone calling this an obvious conflict of interest if Romney thru Bain owns this Voter Counting entity???
And why isn’t this getting greater coverage in the media??
Hopefully Obama will bring all this out tomorrow night !!!!
Dear rafflaw
THANK YOU for bringing Romney’s HYPOCRISY to light …
Now, hopefully, OB will insure that it is mentioned tomorrow night
Pat Mitt was against it, that is the point. And Ryan voted for it so they are both hippocrites. Anything Obama does is bad no matter that they may have benefitted from it or voted for it. (or called it Romneycare before named Obamacare)
Diana Hanford Demarest 1, October 21, 2012 at 4:29 pm
…
Romney is hedging his bets in this election now that he, through Bain, owns voting machine company Hart Intercivic. Did I mention these machines are used in OH and several other swing states?
…
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That is one version of “lying for the lord”, that is, they believe that doing fraudulent elections is a form of “lying for the lord”, and is sanctioned by God because they are doing good by doing bad.
This has nothing to do with demonizing rich people. I want him to make as much money as he can, just not on the backs of working and struggling people. Then to espouse that the bailout was a bad thing while he lines his pockets. Who are we kidding?
Romney is hedging his bets in this election now that he, through Bain, owns voting machine company Hart Intercivic. Did I mention these machines are used in OH and several other swing states? How convenient. tinyurl.com/bwrsrz6
I guess only politicians and vulture fund owners can argue that the country should not bail out large corporations in order to save millions of jobs and actually profit untold millions from that very same bailout!
Well…no. One can be opposed to a thing happening and try to prevent it, but when faced with the reality that regardless of personal opposition it is going to happen anyway and then act in their own best interests accordingly with no issue (moral, ethical or otherwise) what so ever.
Romney made a fair point on the auto bailout the other night, that point being that the Obama plan did in fact take these companies bankrupt. The bankruptcy (which wiped out legacy health care costs and turned once solid middle class wages for auto workers into wages that are on the lower end of the middle class) was the foundation of the “bailout.”
Step away from seeing things as a partisan and re-examine. Whether Romney profited from what was happening regardless of his personal opinion on whether or not it ought to happen is an issue only for partisans. It’s akin to blaming Libertarians for driving on the federally funded highways whose federal funding they oppose.
Actually Pat, the bailout was started by Bush. No one is claiming that Mr. Romney is a bad guy for making millions. However, The fact that Romney made millions off the backs of thousands of lost jobs at Delphi should concern you, but the real issue is the hypocrisy of claiming that bailing out the auto industry was a bad idea for the country. I guess Mitt likes having his cake and eating it too. Can you as a lower middle class person take advantage of venture capitalists and then send the profit overseas and not be taxed on it? What if your job was one of the ones lost when Singer and company sent thousands of jobs overseas? Does that concern you?
By the way Pat, the only redistribution of wealth was done by Romney and his chums. Since they are so interested in sending their profits to tax havens out of this country and sending american jobs overseas, maybe they should move to another country.
It could be than the shape shifter is the new model for presidential candidates.
Romney is the full-on prototype, but let’s hope it does not work.
Romney believes in a concept “lying for the Lord” religiously:
(Ayn Rand: Patron Saint of The Plutocracy). Profiting from the auto-bailout while condemning it at the same time is within those parameters.
I don’t see that investments made Romney a bad guy here, except in the eyes of those who try to demonize the rich. I am lower middle class and
have invested what I could afford to for my retirement. Does that make me a bad person because I have more money than poorer people?
I did work hard for what I have. Growing up I remember a Christmas when my present was a new seat for my old bike. We were poor. I fail to see why some resent others for simply having more then they have. The redistribution of wealth is a Socialist doctrine. If you don’t care for democracy, I suggest you exercise your freedom and move to a socialist country.
The bailout was made by the Obama administration, so maybe you be mad at him for making the rich richer
jongrif851,
That is a minimum of $15 million.
This is the first time I have heard of this ….
It brings to mind only TWO WORDS to describe Mitt Romney
Take your pick or choose both as I did …
DESPICABLE — in that he talks out of one side of his mouth and then reaps a 15 Million windfall out of the other side
HYPOCRITE — is NOT strong enough … !!!!!
Romney said (Quote) “Let the Auto Industry Slip into Bankruptcy ….. ” but OH BY THE WAY, ALLOW ME TO MAKE 15 Million Dollars BEFORE THAT HAPPENS… !!!! (and don’t forget getting rid of the 25,000 workers !!!!!)
DESPICABLE HYPOCRITE — COME ON — REPEAT IT OVER and OVER AGAIN until the Nation realizes the actual kind of man that 47% of the voters this morning seem ready to install into the Oval Office.
One more time, DESPICABLE HYPOCRITE
OBAMA — 2012
Romney — BANISHED TO THE CAYMAN ISLANDS FOR LIFE !!!!
It’s just like Romney trashing Obama on China yet he has major investments in China. Romney is the chameleon candidate. He panders to a side of an issue depending on who is sitting in front of him. He has more sides than a menu at Cracker Barrel. He definitely made money on the auto bailout and lots of it.
My guess is Rmoney had some strong bets on the short. He stood to make a lot more picking over the bones of a bankrupt Detroit than he made from any long bets he had.