General Motors is owned in part by the United Auto Workers. In an effort to help spin the bankruptcy and bailout, the Obama Administration recently made an outrageous claim declaring that the company had “repaid” its $6.7 billion loan from the government. Malarky.
Fox News reports that the repayment was made by dipping further into the bailout money pot:
“The hype is not the reality,” Sen. Charles Grassley, R-Iowa, wrote in a column on FoxNews.com over the weekend. “It is far from clear how GM and the Obama administration could honestly say, much less trumpet in prime time television ads, that GM repaid its TARP (Troubled Asset Relief Program) loans in any meaningful way.”
Grassley wrote a letter last week to Treasury Secretary Timothy Geithner expressing his concerns and asking for more information about why the company was allowed to use bailout money to repay bailout money.
The $6.7 billion is also just a fraction of the $52 billion General Motors received in government aid. Grassley said lawmakers are being told government losses on GM are expected to exceed $30 billion.
The TARP inspector general, Neil Barofsky, bluntly told the Senate Finance Committee during a hearing last week that the repayment “is just other TARP money” and lawmakers should not “exaggerate” the feat.
“It sounds like they’re kind of like taking money out of one pocket and putting it in the other to do that,” Sen. Tom Carper, D-Del., said at the hearing.
Sen. Richard Shelby, R-Ala., expressed similar concerns Sunday on NBC’s “Meet the Press,” saying it’s “misleading” for the administration to claim the company has paid back its loans.
The GM ad could potentially land the company in trouble with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are “likely to mislead consumers.”
The FTC would not comment on the specific GM ad.
General Motors admits that the company is repaying the loan with other government money, but says a year ago “nobody thought we’d be able to pay this back.”