President Barack Obama (Charles Dharapak)
The Media Church of the Holy Obama quickly excommunicated Watergate icon and journalist Bob Woodward last week when he suggested the Obama administration threatened him after he revealed the anti-sequester White House had originated the sequester idea. But Woodward's accusation rings true because it echoes other accounts of the ex-Illinois senator's "Chicago Way" tactics.
Exhibit A is the 2009 Detroit Auto Bailout and the administration's threats against Chrysler bondholders that refused to knuckle under to Obama's plot to favor his Big Labor cronies.
The administration has treated obstacles to its agenda with ruthless tactics. In April 2009, that agenda was to hand an outsized, 55 percent majority interest of embattled Chrysler to the United Auto Workers in a government-orchestrated bankruptcy. But by law secured creditors are first in line in bankruptcy, and bondholders — representing their working-class pension clients — refused to accept Obama's unfair deal for a measly 29 cents on their investment dollar.
Send in the muscle.
"One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight," said Tom Lauria, lawyer for Perella Weinberg investment firm, on Frank Beckmann's Detroit radio program. Lauria later said the brass knuckles belonged to White House Auto Task Force leader Steve Rattner. Lauria's account was disturbing, too, in revealing the confidence that the White House has in its press allies to aid Obama's agenda. Sure enough,
Exhibit A is the 2009 Detroit Auto Bailout and the administration's threats against Chrysler bondholders that refused to knuckle under to Obama's plot to favor his Big Labor cronies.
The administration has treated obstacles to its agenda with ruthless tactics. In April 2009, that agenda was to hand an outsized, 55 percent majority interest of embattled Chrysler to the United Auto Workers in a government-orchestrated bankruptcy. But by law secured creditors are first in line in bankruptcy, and bondholders — representing their working-class pension clients — refused to accept Obama's unfair deal for a measly 29 cents on their investment dollar.
Send in the muscle.
"One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight," said Tom Lauria, lawyer for Perella Weinberg investment firm, on Frank Beckmann's Detroit radio program. Lauria later said the brass knuckles belonged to White House Auto Task Force leader Steve Rattner. Lauria's account was disturbing, too, in revealing the confidence that the White House has in its press allies to aid Obama's agenda. Sure enough,
1 comment:
The outcome of the Chrysler bankruptcy was a complete abuse of power that screwed the bondholders in order to benefit the United Auto Workers Union. It is a great example of the thuggery of the Obama administration.
By law, there is an order of repayment to the creditors of a bankrupt corporation for the remaining assets of the company. Bondholders are paid first (secured creditors). Preferred stock holders are second and lastly the common shareholders (unsecured) get what is left if anything.
Obama's team stepped in and changed all the rules. By his own decree, the common stock holders were given first dibs and got the largest share of the assets while the bond holders were forced to take much less. Why? Because the Auto Union held common stock and would lose their shirt in a normal bankruptcy proceeding. By his extraordinary action, Obama repaid the Union for their support and cemented his relationship with them.
Some of the Bond holders filed suit for breach of contract in the US Supreme Court. But, Justice Ginsberg ruled that the court would not hear the case forcing the bondholders to lose out. One has to ask how could she make such a pitiful ruling? Did the the White House get to her?
It's hard to believe that this could happen in America...a country that believes in the rule of law.
Post a Comment