White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's R

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation

blogs.abcnews.com

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.

(visit the link for the full news article)



Mod Edit : Fixed Headline All Caps

[edit on 5/3/2009 by JacKatMtn]

This is very ugly stuff. I read an article earlier by someone who represented pension funds and other institutional accounts that it was their responsibility to try to get better value for their money. The people the represent are not wealthy. They need this money. Now this comes out. If it is true that Rattner is bullying those who are within their rights to oppose this bankruptcy, that means this administration has gone farther than I realized.

The story was first told on Detroit's WJR-AM radio, without naming Rattmer.

According to Thomas Lauria, Rattner suggested to an official at the boutique investment bank that Perilla Weinberg Partners that the firm would be embarassed for opposing the plan announced by obama on thursday that requires creditors to accept 29 cents on the dollar.

when obama announced the plan he critized those who opposed it as not being willing to make sacrifices. They were willing to take 50 cents on the dollar which sounds like sacrifice to me.

I have no idea if the "white house press corps" would really go along with this and embarass this bank but it sounds like a very ugly threat and if true a very bad omen of things to come. Much of the media is eager to help obama succeed and if this is their idea of how to do it, we are in big trouble.

blogs.abcnews.com
(visit the link for the full news article)

Originally posted by earlywatcher


They were willing to take 50 cents on the dollar which sounds like sacrifice to me.

29 percent is a far cry from 50 cents. All the dialogue from the white house was pure denial,; and in addition, the white house should have no name discrediting ability, unless the business under consideration is bogus to begin with, in which case it should be doomed from start up and never reach the national level.

That is transparency in government in action. Sounds just like extorsion doesn't it? The old time union bosses couldn't have pulled it off any better.

reply to post by daddyroo45


Isn't THAT the truth! I feel like I'm reading some old textbook on mob rule in the big city. I suppose there is always pressure applied in these cases, but it should not be coming from the white house. Surely this is against the law? But nothing will come of it because anybody who really goes up against the white house will have far more problems than the press corps. I'm surprised that this story was reported at all. I hope we see more about it.

another account of pressure applied to Non-TARP lenders.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions. The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking "end justifies the means" group they have ever encountered. Another characterized Obama was "the most dangerous smooth talker on the planet- and I knew Kissinger." Both were voters for Obama in the last election. One participant in negotiations said that the administration's tactic was to present what one described as a "madman theory of the presidency" in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm. The White House has denied the allegation that it threatened Perella Weinberg. Last week Obama singled out the firms that continue to oppose his plan for Chrysler, saying he would not stand with them. Perella Weinberg says it was convinced to support the plan by this stark drawing of a line between firms that have the president's backing and those that did not. They didn't want to be on the wrong side of Obama. Privately, administration officials have expressed confidence that other firms will switch sides for this reason.

Jim Carney at Business Insider

Clifford Asness went so far as to publish a public letter. here's an excerpt

I run an approximately twenty billion dollar money management firm that offers hedge funds as well as public mutual funds and unhedged traditional investments. My company is not involved in the Chrysler situation, but I am still aghast at the President's comments (of course these are my own views not those of my company). Furthermore, for some reason I was not born with the common sense to keep it to myself, though my title should more accurately be called "Not Afraid Enough" as I am indeed fearful writing this... It’s really a bad idea to speak out. Angering the President is a mistake and, my views will annoy half my clients. I hope my clients will understand that I’m entitled to my voice and to speak it loudly, just as they are in this great country. I hope they will also like that I do not think I have the right to intentionally “sacrifice” their money without their permission. Here's a shock. When hedge funds, pension funds, mutual funds, and individuals, including very sweet grandmothers, lend their money they expect to get it back. However, they know, or should know, they take the risk of not being paid back. But if such a bad event happens it usually does not result in a complete loss. A firm in bankruptcy still has assets. It’s not always a pretty process. Bankruptcy court is about figuring out how to most fairly divvy up the remaining assets based on who is owed what and whose contracts come first. The process already has built-in partial protections for employees and pensions, and can set lenders' contracts aside in order to help the company survive, all of which are the rules of the game lenders know before they lend. But, without this recovery process nobody would lend to risky borrowers. Essentially, lenders accept less than shareholders (means bonds return less than stocks) in good times only because they get more than shareholders in bad times. The above is how it works in America, or how it’s supposed to work. The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.

you can read the complete public letter here

what is happening to business in this country?

Come on dont tell me you are surprised........Obama is from Chicago, anyone who has done any research there, or watched the news at all , knows how the politicians in Chicago work.

This is Chicago Economics 101 baby, we shouldnt be surprised by this, this is how they operate there, its that mob mentality, and it will continue.

From people taking the highest bidder to get a seat, to strong arming companies into bankruptcy , to shoveling bills as fast as you can claiming "emergency" just so people dont read them.

You know its funny, if you want to open a business and you go to get a loan, if you dont have a business plan , you dont get a loan.......but these people in washington want us to go along with all this crap , and give em our money, and they dont have a plan......hmm thats interesting.......anyway i know that was off topic there.......sorry bout that.

reply to post by ManBehindTheMask



After watching Neil Cavuto on Fox Business I had to bump this thread. The same guy Thomas Lauria that claimed the WH threatend him and his credibility if he didn't play along with the Obama Administration wouldn't comment on the story. Unbelievable this guy seemed genuinely afraid during the interview he kept adjusting his ear piece that was feeding him answers to Neil's questions. Obviously they (Obama admin) has got to this guy...Chicago Thug Politicians...Just the change we were looking for...

Originally posted by daddyroo45
That is transparency in government in action. Sounds just like extorsion doesn't it? The old time union bosses couldn't have pulled it off any better.

That is certainly possible.

Or, it could also be similar to what we saw in the presidential election.

Spray painted cars with "crack" and "n-word" written all over them

Democrats said "it was republicans"

Republicans said "it was democrats"


the rest of us said "It was narrow minded, dim witted morons who don't know what politics is really about"

I find it amusing that some of you are putting so much trust in the word of a banker...or a lawyer for that matter.

You believe what they say because it fits your agenda...then you turn around and call others sheeple because they believe what Obama says.

...the real problem is that you've been duped just like the one you're targeting...and neither one of you can understand it.

The White House Press core is precisely what most think it isn't.

There is NO journalism there (anymore) and it is NOT about anything as lofty as "the truth" or as fundamental as "facts." They have been used, along with the media masters, as a tool to further an agenda. What motivates them could be a number of things, but I am certain they are more than willing, they are EAGER participants in what they euphemistically call 'molding public opinion' - which is a political form of expression we common folk refer to as "lying."

This is not to say that the other players in this matter are 'victims'. They too, have willingly participated in the game of PR, and time their revelations with much more than justice in mind. "Political" intent is oozing from these assertions as well.

Lacking a real press, we are left to fend for ourselves if we are determined to go beyond what is 'said' and strive to pursue 'what is real.'

I echo the very real observation that the political culture which is demonstrably affecting our lives is rife with corruption, cronyism, self-interest, and worse still, a grand plan that is concealed from us 'lesser' citizens, who are expected to 'work harder' in order to feed the monstrous global financial/ideological cartel that rules the planet.

Far be it from me to defend bankers. they have brought much on themselves with their creative derivatives and what not. i wrote innumerable letters objecting to TARP. that's not what this is about. this is about the current white house applying pressure to get a better deal for certain participants in a company meltdown. using the leverage of having TARP money to others to get their agreement, or so it would seem.

many of the people represented by the non-TARP lenders are not bankers at all but investors. your own pension fund or other mutual fund you invested in might be part of this group being pressured to accept less so that some groups such as the United Auto Workers, big supporters of obama, get more.

not acceptable.