Companies that received bailout money giving generously to candidates
Washington Post
By T.W. Farnam
October 24, 2010Senate Minority Leader Mitch McConnell [R-KY] was a fierce critic of the federal bailout of General Motors and Chrysler last year, saying he "cannot ask the American taxpayer to subsidize failure." But General Motors doesn’t seem to hold a grudge. The political action committee formed by the company, which is now largely owned by the taxpayers, cut McConnell a $5,000 campaign check in September, a small piece of the $190,000 it donated to campaigns in the past month.
While GM suspended its contributions as it solicited the government for financial help, it is now back in the game of political giving, increasing donations from its federal political action committee steadily over the past few months. And GM is not alone: companies that received federal bailout money, including some that still owe the government, are giving to political candidates with vigor. Among companies with PACS, the 23 that received $1 billion or more in federal money through the Troubled Asset Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before.
Most of those donations are going to Republican candidates although the TARP program was approved primarily with Democratic support and President Obama expanded its use to GM and other auto makers. "We contribute to candidates who thoughtfully approach issues that are important to the auto industry and manufacturing," said Greg Martin, a GM spokesman. "If you look at our giving, we have given equally to both parties’ leadership."
Some of the generosity to Republicans can be explained by the expectation that the party will make huge gains in Congress. But another factor is the Democratic Party’s efforts to adopt financial regulation legislation this year. The bill, which passed the Senate with the votes of three Republicans and all but one Democrat, put new curbs on banks and introduced a regulator to vet financial products for consumers. Most Republicans, and banks, say the bill creates too many new restrictions…
Closer to Bailout, GM Prints Candid Apology
By Kendra Marr
Washington Post Staff Writer
December 9, 2008
Step one on the road to recovery: Admit you have a problem.General Motors, the world’s largest automaker, yesterday candidly confessed to the blunders that has led it to near-collapse in a full-page advertisement in Automotive News.
"While we’re still the U.S. sales leader, we acknowledge we have disappointed you," the company said in the magazine ad. "At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today’s globally competitive industry"…
Bloomberg
July 06, 2010
General Motors Co., the largest U.S. automaker, gave stock valued at $6.66 million to 14 top managers, including $1.33 million worth to Chairman and Chief Executive Officer Ed Whitacre. The 123,347 shares were valued at $53.98 each, a price determined by a third party, the company said July 2 in filings with the U.S. S.E.C.
GM gives executives salary stock units and restricted shares to augment their compensation, which is constrained by government rules because the automaker is 61 percent owned by the U.S. Treasury Department. The company must disclose the shares it grants in filings every quarter. Whitacre, whose stock would be worth about $2.31 million based on GM’s bonds, also receives a $1.7 million annual cash salary.
Chief Financial Officer Chris Liddell was awarded 15,979 shares worth about $862,500 under GM’s valuation and $1.5 million at market rates. Liddell receives a base salary of $750,000 a year…
I suppose that there is a lesson here. These Executives feel entitled to these seemingly gigantic compensation packages [bonuses] and are unabashed about continuing the practice even though they are being scrutinized closely. It seems like somewhere along the line, some of them would do the right thing, but it hasn’t happened. What that suggests to me is that this practice has been going on for a very long time – so long that the people in these jobs are in these jobs to make that kind of money – and they aren’t about to accept reform.
What seems outrageous to us seems routine to them. This really is "class warfare." The wealthy class in those graphs of Wealth Inequity really are fighting to maintain a status quo – not necessarily for their company, their stockholders, or their customers, but for themselves. It’s not about G.M., it’s about the G.M. Executives "take home" pay. And that’s a lot to ponder…
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