Obama White House to Waffling Law Firm: ‘Chrysler Deal an Offer You Can’t Refuse’
By Victor Thorn
DURING THE FIRST WEEK OF MAY, Thomas Lauria, an attorney for top creditors, disclosed in an interview on Detroit’s WJR-AM radio that the law firm Perella Weinberg Partners was being strong-armed by Obama officials in regard to the Chrysler bankruptcy offer. On May 2, he told host Frank Beckmann that “one of my clients was directly threatened by the White House and, in essence, compelled to withdraw its opposition to the [bankruptcy] deal under the threat that the full force of the White
House press corps would destroy its reputation if it continued to fight.”
The individual spearheading this clandestine campaign was Steve Rattner, head of Obama’s Auto Industry Task Force. Rattner, it must be noted, was a primary Democratic Party fundraiser during the 2008 campaign, and is now embroiled in a pay-for-play kickback scandal. He also has no experience whatsoever in the auto industry. Anyway, almost immediately, White House officials denied that any such juggernaut existed in which investors were pressured into accepting their deal.
Then, dramatically, on May 3, a post on the New York Times DealBook blog reported that Perella Weinberg accepted the “government-proposed settlement after Mr. Obama criticized the lenders in harsh terms.” They also proceeded to “deny Mr. Lauria’s account of events.”
Despite conflicting stories, the question remains: did White House representatives utilize a well-calculated campaign of fear by threatening to ruin or destroy the reputation of certain companies if they didn’t fall in line?
Before providing an answer, let’s look back to an incident that occurred in October 2008 when Treasury Secretary Henry Paulson gathered executives from America’s nine largest banks in a room, then gave each a one-page document and said, “No one is leaving this room until it’s signed.”
Reluctantly, all nine agreed, setting in motion what investment advisor Michael Shedlock called “the largest government intervention in the American banking system since the Depression.”
Working hand-in-hand with Paulson at that time was current Treasury Secretary Timothy Geithner. Geithner helped mastermind the disastrous bailout scheme, which is not substantially helping the U.S. economy.
Part of this package involved the bailout, and subsequent bankruptcy, of Chrysler Motors. Under the Obama-Geithner settlement deal, bondholders were to receive approximately 29 cents on the dollar owed them. Not satisfied with this arrangement, especially when the United Auto Workers (UAW) received a much sweeter deal, Perella Weinberg (through its subsidiary Xerion Fund) balked at the offer.
Earlier, White House officials said that no undue pressure was exerted, nor did they attempt to ruin anyone’s reputation. But on April 31—the deadline date for Chrysler’s overhaul—President Obama directly targeted Perella Weinberg and, in today’s parlance, “threw them under the bus.”
“While many stakeholders made sacrifices and worked constructively, I have to tell you, some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none.” He then concluded by saying, “I don’t stand with them.”
For starters, the loss of 70 cents on every dollar is definitely a sacrifice. Secondly, as attorney Tom Lauria professed, “It’s no fun standing on this side of the fence opposing the president of the United States.”
He continued, “He stands my clients up as basically the reason Chrysler is going into bankruptcy. He wrongly says they’re not willing to make any sacrifices. People are scared. They have gotten death threats. Some have been told people are going to come to their houses.”
On the heels of David Kellermann’s unfortunate demise, ABC’s Jake Tapper wrote on May 2 that Perella Weinberg (via Xerion Fund), “decided to join the largest four creditors who are owed roughly 70% of Chrysler’s debt and had already agreed to participate with the administration’s plan.”
Incidentally, the other four creditors referred to are JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs—all recipients of billions in bailout money orchestrated by Timothy Geithner and company. Of course, as Tapper asserts somewhat sarcastically, “The Obama administration insists these matters were kept completely separate.”
Victor Thorn is a hard-hitting researcher, journalist and the author of many books on 9-11 and the New World Order. These include 9-11 Evil: The Israeli Role in 9-11 and Phantom Flight 93.
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(Issue # 21, May 25, 2009)