GM Repaid TARP Loans With TARP Money, Republican Senator Says

I really couldn't make this story up if I tried. This is what happens when the govt. blindly throws money at a problem with no way of overseeing the process. To think people believe that Obamacare will run smoothly. Its only money...

A Republican senator is questioning General Motors’ claim that it has repaid its taxpayer-funded loans in full.

Senator Chuck Grassley is asking Treasury Secretary Tim Geithner to justify those claims. According to the Iowa Republican, GM has repaid its TARP (taxpayer-funded bailout) loans using other TARP funds.

The automaker – which is 61 percent owned by the U.S. and 12 percent owned by Canada -- announced on Wednesday that it has fully repaid the $6.7-billion in loans it received from the U.S. and Canadian governments.

“GM is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse we build here in Fairfax,” said GM Chairman Ed Whitacre during a visit to an auto plant in Fairfax, Kansas on Wednesday.

But as the Associated Press reported, GM received a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as part of its bankruptcy reorganization. The U.S. considered $6.7 billion of the $52 billion as a loan.

In fact, GM still owes $45.3 billion to the U.S. and $8.1 billion to Canada, money it received in exchange for shares in the company. GM said it hopes to repay those amounts with an eventual public stock offering, the AP reported.

The funds are NOT coming from GM earnings. No surprise there!!

“It looks like [GM’s] announcement is really just an elaborate TARP money shuffle,” Grassley said in an April 22 letter to Treasury Secretary Geithner. “The repayment dollars haven’t come from GM selling cars but, instead, from a TARP account at the Treasury Department.”

Grassley pointed to the most recent quarterly report from Neil Barofsky, the special inspector general for TARP.

Barofsky testified before the Senate Finance Committee this week that the funds GM used to repay its TARP debt are not coming from GM earnings.

“Instead, GM seems to be using TARP funds from an escrow account at Treasury to make the debt repayments,” Grassley said. The senator noted that according to Barafsky's testimony, "Treasury had supervisory authority over GM’s use of these TARP escrow funds."

Gotta love those handy escrow accounts that are stuffed with taxpayer play money.
Go get em Grassley. Good Luck

Grassley questioned whether the Treasury Department is being straightforward with taxpayers about its management of the $700-billion taxpayer-funded bailout program

The obvious answer to the above question would be NO!

cnsnews.com...



[edit on 23-4-2010 by jibeho]

The Fed is lending money to banks at ZERO percent interest.

The Fed funds rate is near zero, meaning that banks can borrow at almost no cost and lend out at the prevailing rate—or invest in vehicles such as Treasurys.

m.cnbc.com...

Of course they aren't lending much of anything to small business or consumers & certainly not at anything approaching their own non-existent rates.

Any wonder how they are so profitable, despite the fact that many of them are in fact insolvent?

GMAC is essentially a bank/finance-company. I don't know if they are getting zero percent interest but it seem entirely possible.

Aren't you glad these corporations can use Cayman Island PO boxes to dodge their taxes, unlike you?

dont know bout u guys
but I smell an under the table secret loan or deal
coming from somewhere.

There is no way they could pay back
the loans that quickly from new car sales.

mark my words, this was a mistake by GM
that will eventually bite them in the arse.
Look for an investigation into this in the future

If they just took the money and handed it back... Who cares? To me that's what using tarp money to pay off tarp loans. What the hell is the difference. Bush shouldn't have given it out to begin with but if they just used it to pay it back, who is hurt. I guess I am missing something.

edit: Am I wrong thinking they got say 8 billion and gave back 6 billion and so they owe 2 billion??

[edit on Fri April 23rd, 2010 by damwel]

Funny how NO earnings statement has been given.

I would LOVE to see their "supposed" yearly or any of their quarterly statements.

Sorry, this company was bleeding money like a stuck pig, and now they have reaped profits of billions in less than a year?

Yeah right. Here is the thing, we have no frelling idea how much play money the feds created. We have no real idea what the hell was done with ANYTHING to do with these funds they created out of thin air.

Yeah, I see the Wiemar republic or Zimbabwe to be kicking in ANY MOMENT NOW.

I was going to post this also today. Have you seen the recent advertisements lately they have been running boasting for the fact they have paid all of their loans back on time with interest.

LMFAO....what a blatant lie to the public, but only the Kool-Aid drinking crowd jumping up and down in excitement, maybe a few fainted when overcome with joy and tingles running up the leg.

If someone has a link for that commercial, its priceless.

Money is completely fungible.

Two dollar bills sit side by side, can you tell which is the 'TARP' dollar & which isn't?

This is like when the banks denied using the 'TARP' money to pay dividends to shareholders, bonuses to executives, buy other banks, while they still REFUSED to lend money to consumers or small businesses,

it was all BS.

Money is money & banks have gotten & are getting multiple Trillions from Congress, Treasury & the Fed.

To bailout their reckless & criminally fraudulent behaviors.

[edit on 23-4-2010 by slank]

reply to post by prionace glauca


I saw that commercial the other day and just about puked. It's miracle money

GM is no longer accountable to anyone. I would rather sit behind the wheel of a self driving Toyota than hedge my bets on a GM product right now.

THis story is just the icing on the cake for me. GM is too far gone to survive without a govt. IV bag attached to it.

reply to post by jibeho


No kidding - this is a sham. There is absolutely no way that they could have turned around that firm that quickly, absolutely no way. I've spent 25 years in corporate America and I can tell you, that there is no way legally to do it.

Accounting tricks, pushing off expenses to the out years, double counting of revenue or wildly favorable assumptions, TARP funds, something.

Now I wonder if the government owned GM will have to comply with Sarbanes/Oxley and the CFO and CEO sign, under penalty of law that they have certified the financials. I would love to have a good accountant go over their section 404 of Sarbox.

There is no way that these financials have been properly certified and I am unable to find out who their external auditor is. My guess is that they have replaced the independant auditor with the GAO or some other government entity

This is the video of the blatant Lie, now if I can just find the new commercial they produced to put into the thread I started about FTC coming down on them.

Yes, indeed, GMAC the financial arm of GM received Bank Status during the banking crisis and the subsequent Bailout which was the primary objective here.

GM hasn't made money, on their cars for years now. They ARE as "Slank" put it, simply another Finance company.

That is where the money is, which is to charge interest on money lent to people financing/leasing their cars.

And yes, they're using the unspent funds to pay back a portion of the TARP funds which is a good thing.

I do feel that we need to preserve this heritage of American automotive history though for they brought us the only true American sports car, the Corvette.

All of the high performance Audi, BMW and Mercedes are now using small block V8's now as the first GM Muscle Cars of the 60's and 70's did.

Remember, we used GM's manufacturing assembly lines during WWII to build the Allison engine used in most WWII fighter and bomber aircraft such as the P-40, P-51, P-38.....

GM's manufacturing was also used to build Sherman tanks and even M1 rifles inevitably defeating the Germans by outproducing them which was Hitler's greatest fear of drawing the US into the war with Britain.

reply to post by nh_ee


But back then it was owned and operated by pioneers. Men/women devoted to entrepreneurship that made America what it was. It was the vision of those independent men that produced the marvels of technological breakthrough that the current industry still uses.

Now throw into the mix Government and Unions, people who are against entrepreneurship and visionary men. Would you have these goons ruin what was once considered the True American Company. Right now China owns it with all the debt they have in our name. This isn't the same GM you and I are used to. Its best to let this GM be part of History and start anew.

[edit on 23-4-2010 by prionace glauca]

Originally posted by damwel
If they just took the money and handed it back... Who cares? To me that's what using tarp money to pay off tarp loans. What the hell is the difference. Bush shouldn't have given it out to begin with but if they just used it to pay it back, who is hurt. I guess I am missing something.

edit: Am I wrong thinking they got say 8 billion and gave back 6 billion and so they owe 2 billion??

[edit on Fri April 23rd, 2010 by damwel]

BUSH didn't give GM the money... OBAMA did.

He gave them $52 Billion... $6.7 Billion as a loan and $45.3 Billion to buy ownership shares of its stock.

GM is supposed to buy those $45.3 Billion in stocks back; they haven't. They used that money to repay the $6.7 Billion loan... who knows where the rest went.

Originally posted by dolphinfan
reply to post by jibeho

 

No kidding - this is a sham. There is absolutely no way that they could have turned around that firm that quickly, absolutely no way. I've spent 25 years in corporate America and I can tell you, that there is no way legally to do it.

My thoughts exactly!

They had a failing business, a terrible business model, a product that no one wanted (gas guzzlers!), there is simply no way that they could have done this legitimately in such a short time, during a recession to boot!

But still the sheeople will be congratulating GM on riding the storm......Ahhh the sweet bliss of ignorance, ain't it grand!!