Re: follow the money
- From: "Jerry Okamura" <okamuraj005@xxxxxxxxxxxxx>
- Date: Mon, 1 Jun 2009 16:52:57 -1000
So, who do you blame for what you think is a great injustice?
"arthur wouk" <awouk@xxxxxxxxxxxxxxxxx> wrote in message news:1243880973.382543@xxxxxxxxxxxxxxx
Grand Theft Auto: How Stevie the Rat bankrupted GM
by Greg Palast
Monday, June 1, 2009
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping
40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie
Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing
their retirement health benefits,their jobs, their life savings; while
shareholders are getting zilch and many creditors getting hosed, a few
privileged GM lenders - led by Morgan and Citibank - expect to get back
100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billionbonanza is stone cold
illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's `Car Czar'
- the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers
lose some contract wages, stockholders get wiped out and creditors get
fragments of what's left. That's the law. What workers don't lose are
their pensions (including old-age health funds) already taken from their
wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the
pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe
away the money GM owes workers for their retirement health insurance.
Cash in the insurance fund would be replace by GM stock. The percentage
may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well
... just try paying for your dialysis with 50 shares of bankrupt
auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada -
$6 billion right now and in cash - from a company that can't pay for auto
parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy?
The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downsof pension and retirement
funds during the Nixon era, Congress passed the Employee Retirement Income
Security Act. ERISA saysyou can't seize workers' pension funds (whether
monthly payments or health insurance) any more than you can seize their
private bank accounts. And that's because they are the same thing:
workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company
executives must hold these retirement funds as "fiduciaries." Here's the
law, Professor Obama, as described on the government's own web site under
the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in
the interest of participants and beneficiaries and for the exclusive
purpose of providing benefits."
Every business in America that runs short of cash would love to dip into
retirement kitties, but it's not their money any more than a banker can
seize your account when the bank's a little short. A plan's assets are
for the plan'smembers only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an
elderly auto worker's spleen should be siphonedoff to feed the TARP
babies. Workers go without lung transplants so Dimon and Rubin can pimp
out their ride. This is another "Guantanamo"moment for the Obama
Administration - channeling Nixon to endorse the preventive detention of
retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the
fund is replaced with GM stock. Congress saw through that switch-a-roo by
requiring that companies,as fiduciaries, must
"...act prudently and must diversify the plan's investments in order
to minimize therisk of large losses."
By "diversify" for safety, the law does not meanput 100% of worker funds
into a single busted company's stock.
This is dangerous business: The Rattner plan opens the floodgate to every
politically-connected or down-on-their-luck company seeking to drain
health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut?
How come Citi and Morgan aren't asked, like workers and other creditors,
to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and
Citi. These are the corporate Welfare Queens who've already sucked up
overa third of a trillion dollars in aid from the USTreasury and Federal
Reserve. Not coincidentally, Citi, the big winner, has paid over $100
million to Robert Rubin, the former US Treasury Secretary. Rubin was
Obama's point-man inwinning banks' endorsement and campaign donations (by
far, his largestsource of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama
Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying
that the last twelve months will prove to be the bank's "finest year
ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the
elimination of tens of thousandsof jobs, just a collection action for
favored financiers?
And it's been a good year for Se=F1or Rattner.While the Obama
Administration made a big deal out of Rattner's youth spent working for
the Steelworkers Union, they tried to sweep under thechassis that Rattner
was one of the privileged, select group of investors in Cerberus Capital,
the owners of Chrysler. "Owning" is a loose term. Cerberus "owned"
Chrysler the way acannibal "hosts" you for dinner. Cerberus paid nothing
for Chrysler - indeed, they were paid billions by Germany's Daimler
Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's
bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical
three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became
Car Czar, he never relinquished his post at the shop of vultures called
Quadrangle Hedge Fund. Rattner's personalnet worth stands at roughly
half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds,
you could land in prison. Stevie the Rat's plan is nothing less than
Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway
car.
******
Economist and journalist Greg Palast, a former trade union contract
negotiator, is author of the New York Times bestsellers The Best Democracy
Money Can Buy and Armed Madhouse. He is a GM bondholder and
card-carrying member of United Automobile Workers Local 1981.
--
"be wary of mathematicians..especially when they speak the truth."
--sT. Augustine
to email me, delete blackhole. from my return address
.
- Prev by Date: Re: Expert: It's your fault if you're a fatty
- Next by Date: Re: GOP Pols Believe in Outsourcing -- the Dirty Work
- Previous by thread: Re: follow the money
- Next by thread: Re: follow the money
- Index(es):
Relevant Pages
|
