Treasury Department officials never required General Motors Acceptance Corp. executives to lay out a plan for fixing the problems that led to their company having to be rescued by taxpayers three times through the Troubled Asset Relief Program, according to a special investigator's report made public today.
The report also said Treasury officials used TARP funds intended for helping the U.S. auto industry survive the Great Recession of 2008 to enable GMAC - now known as Ally Financial Inc. - to cover its massive losses from poor investments in subprime mortgages, losses that were at the heart of the company's plight.
The government bailout came in three separate decisions covering the administrations of President George W. Bush and President Obama for a total of $17.2 billion. One repayment made in 2011 left the currently outstanding $14.6 billion cost of the Ally bailout. Taxpayers own 74 percent of Ally's stock.
"Treasury never required GMAC to submit a viability plan outlining how it would resolve substantial liabilities that led to historic losses," said the report by the Special Inspector General for TARP. "Treasury required GM and Chrysler to submit viability plans and quickly planned for Chrysler Financial Services Americas LLC's liquidation."
The SIG TARP IG said the "lack of a plan that would address the subprime mortgage component going into the GMAC investment may be the primary reason why still today, four years later, GMAC, now rebranded as Ally, remains in TARP. By continuing to stand behind GMAC and provide repeated bailouts of a subprime lender ... [Treasury was] merely postponing the resolution of the company's substantial mortgage liabilities, and finally in 2012, [Ally's mortgage subsidiary] filed bankruptcy."
Go here to read the full SIG TARP IG report.
NFL bulks up lobbying team
Officials with the National Football League spent five times as much lobbying Congress in 2012 than they did a decade ago, according to an analysis by Citizens for Responsibility and Ethics in Washington.
The pro football league "has spent the past five years beefing up its lobbying team, creating its first political action committee (PAC), and shoring up its defense in the face of congressional interest in player safety, drug testing, and labor issues," CREW said.
"The NFL spent $1.14 million on federal lobbying in 2012, more than five times what it spent a decade ago. The league's lobbying spending hit a high in 2011, while it dealt with high-profile and contentious labor negotiations that led to a four-month lockout of players. The league's PAC, Gridiron-PAC, donated more than $650,000 to federal parties, candidates, and PACs during the 2010 cycle and gave nearly $850,000 during the 2012 cycle," CREW said.
By contrast, the NFL Players Association spent far less than the owners on lobbying but still tripled such expenditures, increasing them from $40,000 annually a decade ago to $120,000 in 2012, CREW said.
The CREW analysis pointed to multiple factors behind the NFL's recently elevated profile in the nation's capital:
"The House Oversight and Government Reform Committee held a hearing last month on delays in testing NFL players for human growth hormone, and this week sent a letter to the NFLPA questioning the union's stance on testing. Over the past few years, Congress has also examined the league's handling of disability benefits, treatment of retired NFL players, and, most prominently, the NFL's response to concussions, an issue that continues to draw widespread public attention."
The league also faces potentially massive liability issues stemming from the concussion issue, and, CREW noted, at least two members of Congress have introduced the idea of "revoking the NFL's valuable anti-trust exemption, which allows it to negotiated broadcast deals."
The CREW analysis did not include a prediction of the outcome of the Super Bowl game pitting the San Francisco 49ers against the Baltimore Ravens.
See the CREW website for the complete text of the NFL analysis.