Congressman Thompson among those taking money from bailed out GM's PAC

Congressman Bennie Thompson

 General Motors has already sent money to more than 40 members of Congress.

Auto giant General Motors restarted its long-dormant political action committee this summer and has already sent money to more than 40 incumbent members of Congress.

The July and August donations from GM PAC are the first since the committee stopped donating after GM filed for bankruptcy in June 2009. Who’s on the receiving end? Both supporters and opponents of the auto bailout, Democrats and Republicans and, mostly, incumbents.

Much of the money went to powerful members who sit at or near the top of influential committees. In the House, Armed Services Committee Chairman Ike Skelton (D-Mo.), Homeland Security Committee Chairman Bennie Thompson (D-Miss.), Transportation Committee Vice Chairman Nick Rahall (D-W.Va.) and Rules Committee Chairwoman Louise Slaughter (D-N.Y.) all received donations.

In the Senate, Finance Committee Chairman Max Baucus (D-Mont.) received $1,000, and Sen. Lisa Murkowski (R-Alaska) — still the ranking member on the Energy and Natural Resources Committee despite losing a primary challenge — received $1,000.

The list of other GM PAC money recipients, according to Federal Election Commission reports, spans the political map from California to Georgia and includes those running for the House, the Senate and a handful of governor’s mansions.

Politico

HT Respond Mississippi

Despite The Spin: Still Government Motors

From Forbes:

GM is paying back Uncle Sam to shake him down for more money.

GM CEO Ed Whitacre announced in a Wall Street Journalcolumn Wednesday that his company has paid back its government bailout loan "in full, with interest, years ahead of schedule." He is even running TV ads on all major networks to that effect--a needless expense given that a credulous media is only too happy to parrot his claims for free. Detroit Free Press' Mike Thompson, for example, advises bailout proponents to start "warming up their vocal chords" to jeer their opponents with chants of "I told you so."

But before belting out their victory aria, GM-boosters ought to hear the whole story--not just the fairytale version about Government Motors' grand comeback that Mr. Whitacre is feeding them.

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.


But wait! Even that's not the full story given that GM, which has not yet broken even, much less turned a profit, can't pay even this puny amount from its own earnings.

As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan.

GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development--although hardly one worth hyping in ads and columns--if it were not for a further plot twist.

Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible.


In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!

GM boasts that, because it is doing so well, it is paying the $6.7 billion five years ahead of schedule since it was not due until 2015. So will there be an accelerated payback of the rest of the $49.6 billion investment? No. That goal has been pushed back, as it turns out.

In order to recover that investment, the government has to sell its equity. It plans to do that only when GM becomes a publicly traded company once again. GM was hoping to turn a profit by the end of 2010 and float an initial public offering this winter. However, GM Chief Financial Officer Chris Liddell, when queried about that timeline a few days ago, demurred. The offering will be made, he said, "when the markets and the company are ready."

(Take that, taxpayers!)