Treasury stonewalling over Delphi salaried pensions invites Congressional subpoenas

A Dayton congressman and the chairman of the House Oversight and Government Reform Committee, Rep. Darrell Issa, R-California, are upping the pressure on the Treasury Department to produce documents detailing the feds’ involvement in a series of decisions that “encouraged” the quasi-governmental Pension Benefit Guaranty Corp. to seize the assets of Delphi Corp.’s salaried pension fund. The move, part of a complex series of transactions designed to push General Motors Corp. quickly through bankruptcy in the summer of 2009, caused some Delphi pensioners to see annual pension payouts cut by more than 60 percent.

In a letter dated Sept. 26, Issa and Rep. Michael Turner, R-Ohio, warned that the committee could resort to what they called “a compulsory process” — i.e., congressional subpoenas — if the requested documents are not received by Oct. 9, less than one month from the November election. A day later, the PBGC rejected a request for non-binding mediation with the Delphi salaried retirees. The congressmen wrote:

When the Treasury Department bailed out GM with $50 billion of taxpayer money, it preserved GM’s pledge to ‘top-up’ the pensions for unionized Delphi workers while not similarly honoring the pension obligations owed to Delphi’s non-unionized workers.  As a result, Delphi’s unionized retirees were made whole while salaried, non-unionized retirees saw their pensions reduced significantly.  Delphi salaried retirees were also not included in negotiations among the Department, the Pension Benefit Guaranty Corporation (PBGC), GM, Delphi, and the United Auto Workers that ultimately led to the decision to terminate Delphi’s pension fund.

Despite our repeated requests for all responsive documents and communications, the Treasury Department has only proffered a limited number of documents, many of which were already publicly available.  Documents recently made public under the Freedom of Information Act, however, demonstrate that the Treasury Department was ‘the driving force’ behind the decision to terminate the pensions of Delphi’s salaried employees.  Although the Treasury Department has maintained that PBGC alone made the decision to terminate the pensions of Delphi’s salaried employees, these documents appear to indicate that Treasury Department officials and members of President Obama’s Auto Task Force played a large role in this decision.

Imagine that. By now there should be no doubt — given the Big Stall from Treasury, dissembling in congressional hearings by senior members of President Barack Obama’s auto task force and dismissive comments by others (see task force boss Steven Rattner) — that Treasury engineered the move to pull the plug on Delphi salaried pensioners in bargaining to get GM and Delphi out of bankruptcy and that Treasury used taxpayer money to do it. There also should be no doubt that Treasury’s slow walk is a gambit to get through election day, to get past a lame-duck session of Congress likely to be preoccupied with finding solutions to the looming “fiscal cliff” and to take their chances with a new Congress. And if there’s a new Romney administration? Could be a problem for the stonewallers – or it could not be.

Credit Turner, a former mayor of Dayton and son of a GM employee, for championing a cause that, inexplicably, mostly has failed to captivate the political of ire of Michigan’s congressional delegation, Republican or Democrat. Where are the champions of the little people to stand up for the Big Mitten, which accounts for somewhere between 5,000 and 6,000 of the 22,000 retirees affected by this sleazy deal? Where is Sen. Carl Levin’s trademark indignation? Or Sen. Debbie Stabenow, running a re-election campaign long on gauzy fluff and short on substance? Or Rep. Gary Peters, whose current district includes Delphi’s headquarters? Or Rep. John Dingell, whose authority and credibility on auto issues spans decades?

Mildly sympathetic, perhaps. But they’re comparatively quiet lest any parochial outrage over an unambiguous case of political favoritism embarrass the White House or complicate with facts and context Team Obama’s “Obama-saved-the-auto-industry” campaign narrative, whatever the costs lost in pensions, dealerships and bond holdings. Tells you everything you need to know.