Michael Gaynor
Congressman Barton was right about the shakedown
By Michael Gaynor
Ms. Ingraham spoke truth that Republican Congressional leaders won't and gave sound political advice.
Congressman Joe Barton, top Republican on the House Energy and Commerce Committee stated in his opening statement at the hearing with CEO of British Petroleum Tony Hayward: "It's a tragedy that private corporation can be subjected to a shakedown." He added that the compensation fund was "a $20 billion slush fund unprecedented in American history."
White House press secretary Robert Gibbs responded: "What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction."
Fox News contributor Charles Krauthammer and Hot Air's "Allahpundit" were displeased with Barton's statement too.
"Allahpundit" (http://hotair.com/archives/2010/06/17/krauthammer-bartons-apology-was-the-most-politically-stupid-statement-of-the-year/):
"Not the first time CK's bucked 'true conservative' dogma, although I bet he'll be surprised to find that his take on this is even semi-controversial on the right. Like he says, and as I acknowledged earlier, Barton has a fair point about The One's pressure tactics with corporations. Granted, there was no 'gun on the table' during yesterday's negotiations, but there didn't need to be: The most powerful prosecutor in the land was sitting right there, a physical reminder to BP that they could do things the easy way by accepting the escrow plan or they could do them the hard way by refusing. But with 60,000 barrels a day bubbling up in the gulf and Bobby Jindal so desperate that he appears ready to start scooping the oil out of the water with his hands, a House hearing aimed at fact-finding about BP's negligence was not the time to go about making that point. In fact, to the extent that what Barton said plays into the left's narrative of Republicans as mindless slaves of big business, it actually gives The One political cover to bully other companies in the future. It's amazing that this needs to be pointed out to a sitting congressman, but if someone whose conservative credentials are as impeccable as CK's is willing to try, I'm happy to pass it along. Click the image to watch."
With all due respect, it is critically important to expose the truth about Obama and his administration and Congressional Republican leaders have been making a huge mistake by treating President Obama as a personally admirable fellow with whom they have policy differences.
Of course it was a shakedown! See J. E. Dyer, "Of Course It's a Shakedown," June 20, 2010 (http://hotair.com/greenroom/archives/2010/06/19/of-course-its-a-shakedown/), referencing SEIU tactics:
"Joe Barton (R-TX) is right: the $20 billion escrow fund is a shakedown. Not because BP isn't liable for the oil spill, and not because BP shouldn't help the people losing their livelihoods on the Gulf Coast. But because Obama extorting the escrow fund from BP is an exercise of executive power outside the rule of law.
"Following the rule of law would produce relief for the oil spill's victims. It just wouldn't put Obama's appointee in sole charge of a $20 billion fund. That has a meaning beyond the 'Chicago' implication of pure extortion, fund-skimming, and payola. It means Obama couldn't use the money to cushion the near-term consequences of his own policies. He'd be constrained by that pesky rule of law."
"Making BP pay the freight for his agenda-driven, business-killing moratorium is an abuse of executive authority on Obama's part. He's extorting BP for his payoff fund, to be used on the thousands of 'small people' who will see their way of life destroyed, not by the oil spill but by Obama's agenda-perfect reaction to it."
"This is SEIU/UAW tactics writ large — and those tactics thrive on the government-by-agency paradigm. That's something the original Progressives were always wrong about: creating professional government agencies doesn't minimize corruption, it helps corruption become more pervasive, and yet hide in plain sight. It makes it seem more and more natural over time for government to be regulating us, in ways we would object to if we were presented with a decision-point, as we are on the floors of our legislatures. Eventually, we are being regulated — to our material cost and someone else's material reward — in so many ways that the average mind boggles, and no longer distinguishes readily between what Congress is lawfully doing, in the glare of the public klieg light, and what executive agencies are merely getting away with because hardly anyone but their victims knows they're doing it."
Obama's doing what he really learned and taught — and that's not constitutional law. As a community organizer working with "progressives" like ACORN and SEIU for many years, Obama learned how to apply naked power, not how to comply with the rule of law or to respect checks, balances and federalism.
The fact that Obama was elected because he blatantly lied about his relationship to ACORN and the liberal media establishment either failed to scrutinize him or even covered up for him needs to become generally known in order to stop the implementation of the radical agenda that Obama is determined to implement to the fullest extent possible (e.g., Obamacare).
Yes, Congressmen Wilson said "Liar!" at the wrong time and place and Congressman Barton should have explained that he was championing the rule of law, not BP. But each of them made an important, valid point that Americans need to appreciate.
On Friday, June 18, 2010, on her radio show, Laura Ingraham blasted top House Republican leaders — John Boehner, Eric Kantor and Mike Pence — for denouncing their colleague Congressman Barton for calling a shakedown a shakedown. Later that day Ms. Ingraham issued an eblast stating in part:
"Rep. Barton was right, even if he didn't use the most politically smart terminology. BP cut corners, but so did Obama. He shook a company down for $20,000,000,000 and ignored the existing legal framework for this kind of thing.
"Flashback: 'I don't spend a lot of time worrying about what the procedural rules are.' — Obama on March 17, 2010."
Red State's Erick Erickson not only explained that Barton was right about the shakedown, but also that BP was not apology-worthy:
"Joe Barton is right. The White House meeting amounted to a shakedown. But let's be clear: British Petroleum collaborated, so I am rather offended Joe Barton felt the need to apologize to BP.
"Yes, on principle, he is right. But I have no sympathy for BP. Barack Obama is the largest recipient of BP campaign contributions. Rahm Emanuel rented his home from BP's pollster, who is also employed by the Democratic Congressional Campaign Committee. The Obama Administration gave its friend BP all the waivers it needed for this particular oil rig. They even fast tracked it. BP funds all the Democrats' 'green energy' initiatives.
"Now, to reciprocate and help Barack Obama save face, BP forked over $20 billion that the Democrats want to use not just to fix the mess, but to cover the costs of health care too. The only guarantee for the public is that the federal government now has a vested interest in ensuring BP does not fail, so we should all be buying BP stock right now.
"Joe Barton was right. But BP and Obama have been hand in hand collaborators the whole time and I have no sympathy for either. Meanwhile, the oil still leaks."
It DOESN'T still leak. It gushes!
In addition to blasting Obama for his continuing crisis management failure in the Gulf of Mexico, Ms. Ingraham declared that the shakedown started when Obama was inaugurated and hasn't stopped and prescribed media training for Republicans.
Ms. Ingraham spoke truth that Republican Congressional leaders won't and gave sound political advice.
Of course, the liberal media establishment is not drawing a parallel between the Obama administration forcing a $20,000,000,000 BP escrow fund in 2010 and intimidating Chrysler's secured creditors in 2009.
Thomas Lauria, a White & Case bankruptcy attorney, knows how the Obama administration ignores the law in the pursuit of its political agenda. One on One with Thomas Lauria, Bankruptcy Attorney with White & Case, Friday, May 08, 2009 (http://www.pbs.org/nbr/site/onair/transcripts/attorney_thomas_lauria_explains_the_non_tarp_lender_strategy_090508/):
SUSIE GHARIB: Chrysler's dissident lenders abandoned their fight today as their ranks dwindled and political and financial costs rose. The move clears the way for Chrysler to emerge from bankruptcy quickly and join Fiat. The so-called "non-TARP" lenders had opposed Chrysler's restructuring plan, saying it put non-secured creditors like the United Auto Workers ahead of secured creditors. Washington bureau chief Darren Gersh spoke with the attorney representing that lender group. Darren began by asking Thomas Lauria why they gave up on the case.
THOMAS LAURIA, BANKRUPTCY ATTORNEY, WHITE & CASE: Well, they still believe in the underlying legal and financial principles that motivated them to get started. But the political pressure was just too great for a sufficient number of them to feel comfortable proceeding. And when we got down to the small group that was prepared to put themselves in the bright light of the public eye and bear all of that pressure themselves, I think they just concluded they were too small a group to be credible and too small a group to carry the weight.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: I just want to ask you, it seems like if the government wasn't willing to pump billions of dollars into Chrysler, it wouldn't be worth much even if you liquidated the company. Aren't your clients lucky to get the $0.30 on the dollar that the government was offering them?
LAURIA: Well, a lot of people have looked at the liquidation value of Chrysler and I think there's room for a lot of disagreement on that. One of the questions is if you're going to liquidate Chrysler, do you really liquidate it, selling sticks and bricks or do you sell off business lines and I think a lot of people think that the Ram truck, the Jeep and the minivan line were pretty valuable as operating businesses.
GERSH: Is this a case though where the law may have been on your side but all the facts weren't, that there just were too many — you were against the government, the unions. Everybody seemed to want to get a deal done and there were just a few people holding out?
LAURIA: It was a case where certainly the circumstances were against us. And certainly there were strong political interests against us. I think the question that this reorganization raises though is are there any circumstances where we're comfortable compromising the rule of law in the interest of political interests? I think that's a very difficult question.
GERSH: It's a difficult question and I imagine a lot of people who are going to be involved in the GM's potential bankruptcy are asking that very question about what this means for them. You're a bankruptcy attorney. Does this say anything about what might happen to GM and the people who are involved in that case?
LAURIA: There are certainly similar issues. I know a lot more about Chrysler than I do GM. You have a situation where we have lenders who have already put their money in. It's been spent and you have employees who have to continue working to provide value going forward. So there's natural tension there in that relationship. I think the bigger question though is will the auto industry or any other troubled industry that may have important political issues associated with it be able to attract private financing on a (INAUDIBLE) basis? Certainly a lender who looks at what is happening to the lenders in the Chrysler case might have second thoughts. And we know there are other industries that are going to need rescue financing, the airline industry, GM coming up. Will the government be the only source of that financing? Certainly the administration says that they're hopeful that the private sector will participate, but I'm not sure that this is much of an inducement for that.
GERSH: Well, you were involved in these negotiations. Tell us what the government was like to deal with. What were they like leading up to this bankruptcy filing?
LAURIA: Well, one of the interesting things is we didn't really ever get to get in a room and negotiate with the task force. We had an eight- member steering committee that represented the bank debt for institutions that had received TARP funding and for institutions that had not. And that was the negotiating vehicle. When it got to a point where the view of the non-TARP lenders separated from those of the TARP lenders, we reached out separately to try to engage with the task force and although we're able to submit a proposal which contemplated a 50 percent reduction in the value of our claim, we're never able to engage with the other side. And in fact, I think that was one of the disturbing things is that it felt like we were really kind of getting the stiff arm and then when you turn on your TV the next day and hear the president say that my clients refused to make concessions when in fact they had offered a 50 percent concession and were in fact the bad guys when nobody would talk to us, it's a little troubling.
GERSH: Well, Tom Lauria, bankruptcy attorney, thank you for talking to us.
LAURIA: Thank you.
To be sure, the Obama administration denied any wrongdoing and ABC reported it.
"White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation," May 2, 2009 (http://blogs.abcnews.com/politicalpunch/2009/05/bankruptcy-atto.html):
"A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.
"The White House and a spokesperson for the investment bank in question challenged the accuracy of the story.
"'The charge is completely untrue,' said White House deputy press secretary Bill Burton, 'and there's obviously no evidence to suggest that this happened in any way.'
"Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.
"Lauria first told the story, without naming Rattner, to Frank Beckmann on Detroit's WJR-AM radio.
"Perella Weinberg Partners, Lauria said, 'was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That's how hard it is to stand on this side of the fence.'
"A Perella Weinberg Partners spokesperson told ABC News on Sunday that 'The firm denies Mr. Lauria's account of events.' The spokesperson would not elaborate.
"Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. The firm is led by Joseph Perella. On Thursday afternoon — after the Wedneday deadline — the portfolio manager for the Xerion fund decided to join the larger four creditors who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.
"Those four financial institutions — JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs — are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate.
"Someone familiar with the Perella Weinberg Partners' portfolio manager's thinking told ABC News that the decision to go along with the government plan 'was based on an assessment of investment risk and reward and nothing else.'
"Lauria said his clients 'are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt' with Chrysler.
"President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.
"'While many stakeholders made sacrifices and worked constructively, I have to tell you some did not,' the president said. '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.'
"Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said.
"President Obama also said of Lauria's clients, 'I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices.'
"'He stands my clients up as basically the reason Chrysler is going into bankruptcy,' Lauria said. 'He wrongly says they're not willing to make any sacrifice. And then he says he does not stand with us.'
"Lauria said the president saying he doesn't stand with his clients 'kind of sounds like "You're fair game." In whatever sense. People are scared. They have gotten death treats. Some have been told people are going to come to their houses. God forbid if some nut did something, I'm just wondering how the president would feel.'
"The Miami area-based attorney describes himself as an independent, and says after waiting in line for six hours last November he ended up not voting in the presidential election. He donated $10,000 to the Democratic Senatorial Campaign Committee in 2008 and $1,000 to then-Sen. Hillary Clinton, D-NY, in 2006."
Question: Why would the Founders be proud of — Laura Ingraham, Michelle Malkin, Congresswoman Michele Bachmann and ACORN whistleblower Anita MonCrief, or Congressmen Boehner, Kantor and Pence?
Answer: The bold, blunt ladies.
The ladies know that "the three Joes" were right about Obama.
"Joe the Plumber" was right when he responded that then presidential candidate Obama's spread the wealth attitude sounded like socialism.
Congressman Joe Wilson was right when he said that Obama lied about Obamacare in his State of the Union Address.
Congressman Joe Barton was right when he said that the Obama Administration forced BP to set up a $20,000,000,000 escrow fund to be administered by Obama's former pay czar.
Congressional Republican leaders need to stand up, not stand down.
© Michael Gaynor
June 21, 2010
Ms. Ingraham spoke truth that Republican Congressional leaders won't and gave sound political advice.
Congressman Joe Barton, top Republican on the House Energy and Commerce Committee stated in his opening statement at the hearing with CEO of British Petroleum Tony Hayward: "It's a tragedy that private corporation can be subjected to a shakedown." He added that the compensation fund was "a $20 billion slush fund unprecedented in American history."
White House press secretary Robert Gibbs responded: "What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction."
Fox News contributor Charles Krauthammer and Hot Air's "Allahpundit" were displeased with Barton's statement too.
"Allahpundit" (http://hotair.com/archives/2010/06/17/krauthammer-bartons-apology-was-the-most-politically-stupid-statement-of-the-year/):
"Not the first time CK's bucked 'true conservative' dogma, although I bet he'll be surprised to find that his take on this is even semi-controversial on the right. Like he says, and as I acknowledged earlier, Barton has a fair point about The One's pressure tactics with corporations. Granted, there was no 'gun on the table' during yesterday's negotiations, but there didn't need to be: The most powerful prosecutor in the land was sitting right there, a physical reminder to BP that they could do things the easy way by accepting the escrow plan or they could do them the hard way by refusing. But with 60,000 barrels a day bubbling up in the gulf and Bobby Jindal so desperate that he appears ready to start scooping the oil out of the water with his hands, a House hearing aimed at fact-finding about BP's negligence was not the time to go about making that point. In fact, to the extent that what Barton said plays into the left's narrative of Republicans as mindless slaves of big business, it actually gives The One political cover to bully other companies in the future. It's amazing that this needs to be pointed out to a sitting congressman, but if someone whose conservative credentials are as impeccable as CK's is willing to try, I'm happy to pass it along. Click the image to watch."
With all due respect, it is critically important to expose the truth about Obama and his administration and Congressional Republican leaders have been making a huge mistake by treating President Obama as a personally admirable fellow with whom they have policy differences.
Of course it was a shakedown! See J. E. Dyer, "Of Course It's a Shakedown," June 20, 2010 (http://hotair.com/greenroom/archives/2010/06/19/of-course-its-a-shakedown/), referencing SEIU tactics:
"Joe Barton (R-TX) is right: the $20 billion escrow fund is a shakedown. Not because BP isn't liable for the oil spill, and not because BP shouldn't help the people losing their livelihoods on the Gulf Coast. But because Obama extorting the escrow fund from BP is an exercise of executive power outside the rule of law.
"Following the rule of law would produce relief for the oil spill's victims. It just wouldn't put Obama's appointee in sole charge of a $20 billion fund. That has a meaning beyond the 'Chicago' implication of pure extortion, fund-skimming, and payola. It means Obama couldn't use the money to cushion the near-term consequences of his own policies. He'd be constrained by that pesky rule of law."
"Making BP pay the freight for his agenda-driven, business-killing moratorium is an abuse of executive authority on Obama's part. He's extorting BP for his payoff fund, to be used on the thousands of 'small people' who will see their way of life destroyed, not by the oil spill but by Obama's agenda-perfect reaction to it."
"This is SEIU/UAW tactics writ large — and those tactics thrive on the government-by-agency paradigm. That's something the original Progressives were always wrong about: creating professional government agencies doesn't minimize corruption, it helps corruption become more pervasive, and yet hide in plain sight. It makes it seem more and more natural over time for government to be regulating us, in ways we would object to if we were presented with a decision-point, as we are on the floors of our legislatures. Eventually, we are being regulated — to our material cost and someone else's material reward — in so many ways that the average mind boggles, and no longer distinguishes readily between what Congress is lawfully doing, in the glare of the public klieg light, and what executive agencies are merely getting away with because hardly anyone but their victims knows they're doing it."
Obama's doing what he really learned and taught — and that's not constitutional law. As a community organizer working with "progressives" like ACORN and SEIU for many years, Obama learned how to apply naked power, not how to comply with the rule of law or to respect checks, balances and federalism.
The fact that Obama was elected because he blatantly lied about his relationship to ACORN and the liberal media establishment either failed to scrutinize him or even covered up for him needs to become generally known in order to stop the implementation of the radical agenda that Obama is determined to implement to the fullest extent possible (e.g., Obamacare).
Yes, Congressmen Wilson said "Liar!" at the wrong time and place and Congressman Barton should have explained that he was championing the rule of law, not BP. But each of them made an important, valid point that Americans need to appreciate.
On Friday, June 18, 2010, on her radio show, Laura Ingraham blasted top House Republican leaders — John Boehner, Eric Kantor and Mike Pence — for denouncing their colleague Congressman Barton for calling a shakedown a shakedown. Later that day Ms. Ingraham issued an eblast stating in part:
"Rep. Barton was right, even if he didn't use the most politically smart terminology. BP cut corners, but so did Obama. He shook a company down for $20,000,000,000 and ignored the existing legal framework for this kind of thing.
"Flashback: 'I don't spend a lot of time worrying about what the procedural rules are.' — Obama on March 17, 2010."
Red State's Erick Erickson not only explained that Barton was right about the shakedown, but also that BP was not apology-worthy:
"Joe Barton is right. The White House meeting amounted to a shakedown. But let's be clear: British Petroleum collaborated, so I am rather offended Joe Barton felt the need to apologize to BP.
"Yes, on principle, he is right. But I have no sympathy for BP. Barack Obama is the largest recipient of BP campaign contributions. Rahm Emanuel rented his home from BP's pollster, who is also employed by the Democratic Congressional Campaign Committee. The Obama Administration gave its friend BP all the waivers it needed for this particular oil rig. They even fast tracked it. BP funds all the Democrats' 'green energy' initiatives.
"Now, to reciprocate and help Barack Obama save face, BP forked over $20 billion that the Democrats want to use not just to fix the mess, but to cover the costs of health care too. The only guarantee for the public is that the federal government now has a vested interest in ensuring BP does not fail, so we should all be buying BP stock right now.
"Joe Barton was right. But BP and Obama have been hand in hand collaborators the whole time and I have no sympathy for either. Meanwhile, the oil still leaks."
It DOESN'T still leak. It gushes!
In addition to blasting Obama for his continuing crisis management failure in the Gulf of Mexico, Ms. Ingraham declared that the shakedown started when Obama was inaugurated and hasn't stopped and prescribed media training for Republicans.
Ms. Ingraham spoke truth that Republican Congressional leaders won't and gave sound political advice.
Of course, the liberal media establishment is not drawing a parallel between the Obama administration forcing a $20,000,000,000 BP escrow fund in 2010 and intimidating Chrysler's secured creditors in 2009.
Thomas Lauria, a White & Case bankruptcy attorney, knows how the Obama administration ignores the law in the pursuit of its political agenda. One on One with Thomas Lauria, Bankruptcy Attorney with White & Case, Friday, May 08, 2009 (http://www.pbs.org/nbr/site/onair/transcripts/attorney_thomas_lauria_explains_the_non_tarp_lender_strategy_090508/):
SUSIE GHARIB: Chrysler's dissident lenders abandoned their fight today as their ranks dwindled and political and financial costs rose. The move clears the way for Chrysler to emerge from bankruptcy quickly and join Fiat. The so-called "non-TARP" lenders had opposed Chrysler's restructuring plan, saying it put non-secured creditors like the United Auto Workers ahead of secured creditors. Washington bureau chief Darren Gersh spoke with the attorney representing that lender group. Darren began by asking Thomas Lauria why they gave up on the case.
THOMAS LAURIA, BANKRUPTCY ATTORNEY, WHITE & CASE: Well, they still believe in the underlying legal and financial principles that motivated them to get started. But the political pressure was just too great for a sufficient number of them to feel comfortable proceeding. And when we got down to the small group that was prepared to put themselves in the bright light of the public eye and bear all of that pressure themselves, I think they just concluded they were too small a group to be credible and too small a group to carry the weight.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: I just want to ask you, it seems like if the government wasn't willing to pump billions of dollars into Chrysler, it wouldn't be worth much even if you liquidated the company. Aren't your clients lucky to get the $0.30 on the dollar that the government was offering them?
LAURIA: Well, a lot of people have looked at the liquidation value of Chrysler and I think there's room for a lot of disagreement on that. One of the questions is if you're going to liquidate Chrysler, do you really liquidate it, selling sticks and bricks or do you sell off business lines and I think a lot of people think that the Ram truck, the Jeep and the minivan line were pretty valuable as operating businesses.
GERSH: Is this a case though where the law may have been on your side but all the facts weren't, that there just were too many — you were against the government, the unions. Everybody seemed to want to get a deal done and there were just a few people holding out?
LAURIA: It was a case where certainly the circumstances were against us. And certainly there were strong political interests against us. I think the question that this reorganization raises though is are there any circumstances where we're comfortable compromising the rule of law in the interest of political interests? I think that's a very difficult question.
GERSH: It's a difficult question and I imagine a lot of people who are going to be involved in the GM's potential bankruptcy are asking that very question about what this means for them. You're a bankruptcy attorney. Does this say anything about what might happen to GM and the people who are involved in that case?
LAURIA: There are certainly similar issues. I know a lot more about Chrysler than I do GM. You have a situation where we have lenders who have already put their money in. It's been spent and you have employees who have to continue working to provide value going forward. So there's natural tension there in that relationship. I think the bigger question though is will the auto industry or any other troubled industry that may have important political issues associated with it be able to attract private financing on a (INAUDIBLE) basis? Certainly a lender who looks at what is happening to the lenders in the Chrysler case might have second thoughts. And we know there are other industries that are going to need rescue financing, the airline industry, GM coming up. Will the government be the only source of that financing? Certainly the administration says that they're hopeful that the private sector will participate, but I'm not sure that this is much of an inducement for that.
GERSH: Well, you were involved in these negotiations. Tell us what the government was like to deal with. What were they like leading up to this bankruptcy filing?
LAURIA: Well, one of the interesting things is we didn't really ever get to get in a room and negotiate with the task force. We had an eight- member steering committee that represented the bank debt for institutions that had received TARP funding and for institutions that had not. And that was the negotiating vehicle. When it got to a point where the view of the non-TARP lenders separated from those of the TARP lenders, we reached out separately to try to engage with the task force and although we're able to submit a proposal which contemplated a 50 percent reduction in the value of our claim, we're never able to engage with the other side. And in fact, I think that was one of the disturbing things is that it felt like we were really kind of getting the stiff arm and then when you turn on your TV the next day and hear the president say that my clients refused to make concessions when in fact they had offered a 50 percent concession and were in fact the bad guys when nobody would talk to us, it's a little troubling.
GERSH: Well, Tom Lauria, bankruptcy attorney, thank you for talking to us.
LAURIA: Thank you.
To be sure, the Obama administration denied any wrongdoing and ABC reported it.
"White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation," May 2, 2009 (http://blogs.abcnews.com/politicalpunch/2009/05/bankruptcy-atto.html):
"A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.
"The White House and a spokesperson for the investment bank in question challenged the accuracy of the story.
"'The charge is completely untrue,' said White House deputy press secretary Bill Burton, 'and there's obviously no evidence to suggest that this happened in any way.'
"Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.
"Lauria first told the story, without naming Rattner, to Frank Beckmann on Detroit's WJR-AM radio.
"Perella Weinberg Partners, Lauria said, 'was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That's how hard it is to stand on this side of the fence.'
"A Perella Weinberg Partners spokesperson told ABC News on Sunday that 'The firm denies Mr. Lauria's account of events.' The spokesperson would not elaborate.
"Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. The firm is led by Joseph Perella. On Thursday afternoon — after the Wedneday deadline — the portfolio manager for the Xerion fund decided to join the larger four creditors who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.
"Those four financial institutions — JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs — are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate.
"Someone familiar with the Perella Weinberg Partners' portfolio manager's thinking told ABC News that the decision to go along with the government plan 'was based on an assessment of investment risk and reward and nothing else.'
"Lauria said his clients 'are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt' with Chrysler.
"President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.
"'While many stakeholders made sacrifices and worked constructively, I have to tell you some did not,' the president said. '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.'
"Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said.
"President Obama also said of Lauria's clients, 'I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices.'
"'He stands my clients up as basically the reason Chrysler is going into bankruptcy,' Lauria said. 'He wrongly says they're not willing to make any sacrifice. And then he says he does not stand with us.'
"Lauria said the president saying he doesn't stand with his clients 'kind of sounds like "You're fair game." In whatever sense. People are scared. They have gotten death treats. Some have been told people are going to come to their houses. God forbid if some nut did something, I'm just wondering how the president would feel.'
"The Miami area-based attorney describes himself as an independent, and says after waiting in line for six hours last November he ended up not voting in the presidential election. He donated $10,000 to the Democratic Senatorial Campaign Committee in 2008 and $1,000 to then-Sen. Hillary Clinton, D-NY, in 2006."
Question: Why would the Founders be proud of — Laura Ingraham, Michelle Malkin, Congresswoman Michele Bachmann and ACORN whistleblower Anita MonCrief, or Congressmen Boehner, Kantor and Pence?
Answer: The bold, blunt ladies.
The ladies know that "the three Joes" were right about Obama.
"Joe the Plumber" was right when he responded that then presidential candidate Obama's spread the wealth attitude sounded like socialism.
Congressman Joe Wilson was right when he said that Obama lied about Obamacare in his State of the Union Address.
Congressman Joe Barton was right when he said that the Obama Administration forced BP to set up a $20,000,000,000 escrow fund to be administered by Obama's former pay czar.
Congressional Republican leaders need to stand up, not stand down.
© Michael Gaynor
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