Lawmakers on Capital Hill Wednesday heard testimony surrounding the Treasury Department’s role in the loss of pensions for Delphi salaried employees, shedding new light on how the decisions were made.
The hearing surrounded a report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)*. It finds that General Motors was pressured by union contracts and time restraints to restore the pensions of union employees, while non-salaried employees lost 30 to 70 percent of their pensions.
Christy Romero, the inspector general for TARP, says it was clear the unions wanted a “top up" of pensions. She says the Treasury set a window of time to negotiate with unions during the bailout; a time frame Romero says gave the unions more leverage.
"No one will ever know if more time in the bankruptcy would allowed for more negotiation of the 'top up' but Treasury should take accountability that their 40 day condition had the effect of limiting GM’s options," says Romero.
Romero also says there was no evidence that political factors played a role in the pension decisions.
Republican Congressman Mike Turner of Ohio's 10th district says the report shows that the government did influence the decisions. Turner has argued that the Obama administration picked winners and losers during the auto bailout and that its taken too long to get answers.
“This is the first time we’ve ever really had an insight into what the Auto Task Force did, and I must tell you it’s just shocking. Because remember the last hearing we had, we had to have it because these gentleman refused to even talk to the Inspector General," says Turner. "They said we’ve left the government, we know longer have to answer questions on the work that we did. We’ve had to subpoena Treasury just to get to the bottom of things.”
Turner says Congress issued subpoenas last week to the Treasury Department and plans to continue the investigation.
*Correction: An earlier version of this report mistakenly called SIGTARP a report, when it is an office of the Treasury.