By on October 15, 2010

Back in July, the Special Inspector General for the TARP program (SIGTARP) released a damning report on GM and Chrysler’s efforts to cull dealers during their government-overseen bailout-bankruptcies. The upshot: GM and Chrysler handled the culls either inconsistently or subjectively, and the President’s auto task force pressed the issue unnecessarily and “without sufficient consideration of the decisions’ broader economic impact.” And though that report, the product of a year’s worth of investigation, made the automakers and their government “saviors” look mighty stupid, the awkward walk-back of most of the dealer cuts had already made the point fairly well. But with the TARP program now largely rolled up, the SIGTARP’s office has been bulking up on investigators, targeting fraud and criminal activity around the entire TARP program. And, according to Automotive News [sub], the dealer cull is on the agenda. SIGTARP won’t “disclose the targets of the investigation or the actions being probed,” but it has “opened a follow-up investigation of possibly illegal activity in the [dealer-cull] effort.”

There are plenty of possible targets… especially if you ask aggrieved former dealers. Some point to holes in GM’s documentation of dealer cull decision making. Some point to “false statements” in congressional testimony by GM’s Fritz Henderson, Chrysler’s Jim Press and others, especially in regards to the claimed cost savings of cutting dealers (an issue the SIGTARP report tackled specifically). Others point to a seemingly endless list of possible “inside deals” in which struggling but well-connected dealers were spared at the expense of profitable dealerships. Wherever SIGTARP comes down on possible illegal activity in the dealer cull, it’s good to know that more light is being cast on that murky and controversial chapter in the great Detroit rescue.

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17 Comments on “SIGTARP Investigates Possible Criminal Activity In Dealer Cull...”

  • avatar

    While I have always supported the dealer culling effort for several reasons, any monkey business in this misadventure by GM & C ought to be checked.

  • avatar

    One cannot help but wonder — and AN’s breathless cheering only bolsters the case — whether this is just a political move by politicians beholden to dealers. Color me very skeptical that there’s any real fire here… not that that means there won’t be nasty consequences for GM and Chrysler.

  • avatar

    I agree the dealer cull was necessary. Any misdoing will be investigated as they should. The administration is not hiding anything otherwise these investigations would not have made their findings known etc.
    Most dealers that have closed will not reopen. This is water under the bridge. Doesn`t detract from the successful bail-out.

    • 0 avatar

      Are you posting from an alternate universe? There are so many things wrong with your post that I can’t decide where to start. But the easiest is the success of the bailout: it’s too early yet. And as far as the dealer cull, everything has been dragged out kicking and screaming. Think about the over-respesentation of Republican donor dealers among the culls, That’s not a tip off that something is wrong?

    • 0 avatar

      MikeAR:  Your argument would have more weight if you could show data which demonstrates that Republican-donors are not similarly over-represented in the overall dealer body.

    • 0 avatar

      Robert, you want to me prove my point but you let mike978 get away unchallenged with the statement that the bail-out was successful? Republicans were over-represented and you know it. I won’t bother to respond to anything else because you don’t have the right to require proof of me and not of someone on your side of the arguement. In other words, your bias is showing and it’s pretty ugly.

    • 0 avatar

      It would be hard to find a more Republican-leaning constituency than car dealers. Even if Rattner et al had wanted to find some Democratic sympathizers to cull from the dealer pool they probably couldn’t have. I swear, it’s a laugh riot when people try to paint the Obama administration as politically motivated, after the years of Republican-led partisan shenanigans that have been going on ever since Newt Gingrich and his compatriots came to prominence.

    • 0 avatar

      You are absolutely wrong Jimble, car dealers donate to the party and politicians in power for the most part. In the South, because local offices and state legilatures are Democrat dominated, they donate to Democrats mostly. It’s all about buying influence and the elected officials are their friends and neighbors too. Get your facts right before you launch into a blind partisan rant.

    • 0 avatar

      MikeAR, you might do a wee bit of research yourself. I don’t know about the South in particular, but nationally it is well known that car dealers lean — and donate — heavily in favor of Republicans. The notion that Republican dealers were targeted disproportionately has been pretty thoroughly debunked.

    • 0 avatar

      Jimble you’re cherry picking again. Look at total contributions, not just to national races. Another thing, look into Lander’s Chrysler dealerships. The ownership was a combo of minority and politically very well connected. They not only kept their dealerships but in several instances their competitors were closed down despite being healthy.

      It was a corrupt process and any attempt to defend it just shows your willingness to ignore the truth and defend banana-republification of this country.

  • avatar

    What’s so absurd about this is that it’s taking an Inspector General to figure this out WAY after the fact.  Anyone with 1/2 a brain would have noticed that Jim Press was pulling ridiculous numbers about Chrysler’s culled dealer costs almost literally out of his ass when testifying before the Senate.

  • avatar

    Everything this administration does is politically motivated.

  • avatar

    Parasitic mental retards and their governments are a laugh-a-minute.
    This is something out of 1980 soviet union central planning committee.

  • avatar

    Gee I wonder what would have happened to ALL of the dealers if GM and/or Chrysler had evaporated into Ch7.   I hope that gets reported/investigated too.

  • avatar

    The idea of equal treatment under the laws OK with you?
    The chapter filings of GM and Chrysler–and their respective resolutions–had nothing to do with the number of distribution outlets.
    The Evil Circus of clueless Brian Deese and politically aspiring Steve Rattner backed into what happened by starting at the End Game–the protection of key voting constituencies.
    Please overlook Mr. Deese’s lack of former employment in any private industry or Mr. Rattner’s recent settlement of felony pay-for-play charges if they trouble you.  Those are the facts.
    Rick Wagoner is a hell of a decent guy, and as honest as they come.  If you have any money left after the current mob in office is through, I’d save up for a copy.  The truth will be there.

  • avatar

    Yes, this administration, far more than any previous is politically motivated in everything they do.  Obama hasn’t stopped campaigning since he moved into the White House.  Chicagoland politicians and gangsters operate in virtually the same way. 

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