Emails: Geithner, Treasury drove cutoff of non-union Delphi workers’ pensions
Published: 12:27 AM 08/07/2012
By Matthew Boyle
Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.

The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions.

The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.

Delphi, a General Motors company, is one of the world’s largest automotive parts manufacturers. Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.

The White House and Treasury Department have consistently maintained that the Pension Benefit Guaranty Corporation (PBGC) independently made the decision to terminate the 20,000 non-union Delphi workers’ pension plan. The PBGC is a federal government agency that handles private-sector pension benefits issues. Its charter calls for independent representation of pension beneficiaries’ interests.

Former Treasury official Matthew Feldman and former White House auto czar Ron Bloom, both key members of the Presidential Task Force on the Auto Industry during the GM bailout, have testified under oath that the PBGC, not the administration, led the effort to terminate the non-union Delphi workers’ pension plan.

“As a result of the Delphi Corporation bankruptcy, for example, Delphi and the Pension Benefit Guaranty Corporation were forced to terminate Delphi’s pension plans, which means there are Delphi retirees who unfortunately will collect less than their full pension benefits,” Feldman testified on July 11, 2012.

The emails TheDC has obtained show that the Treasury Department, not the independent PBGC, was running the show.

Under 29 U.S.C. §1342, the PBGC is the only government entity that is legally empowered to initiate termination of a pension or make any official movements toward doing so.

NEXT: Read the internal Pension Benefit Guaranty Corporation emails >>

House (PBGC guy who is the guy that is supposed to make the decision) wrote to Feldman on Thursday, April 16, 2009, that he wanted a “very brief follow-up” discussion to “ensure that we’re acting responsibly/protective” as they moved toward terminating the pensions of non-union Delphi workers.

“[W]e’ve (PBGC) initiated our internal process here,” House added, seeking Feldman’s agreement, “which includes communications to designated reps at our Board agencies (Labor, Commerce, Treasury). Relatedly, that process contemplates newspaper publication of agency action, which we’re tentatively scheduling for end of next week.”

“Don’t want anyone on the auto-team to be caught flat-footed behind any of this,” House added. “I can give you 60 seconds of color when you have a moment.”

Feldman responded: “Understood. You should do what you need to.”

Four days later, Vince Snowbarger — then the PBGC’s acting director, and now its Deputy Director for Operations — emailed several PBGC officials internally. He relayed that the agency “anticipate[d] taking action to file for termination in both [Delphi’s] salaried and hourly plans before the week is out.”

“Given publication deadlines, this means action as soon as tomorrow,” Snowbarger continued, referring to the requirement to make a public statement in the form of a newspaper announcement.

“The action we are contemplating will preserve our position against those assets while the decisions about Delphi’s future are being decided,” he added.

Snowbarger also wrote that Obama administration officials had given him a green light. “The auto team at Treasury is aware of this potential and have indicated we should do what we need to do,” he wrote.

d-usa wrote:Frazz, did you actually read past page 1 of this thing?

Page 1: It's the administrations fault! They made the decision! Only the PBGC can make that decision! Read the emails on page 2 to see how it all happened!

Page 2:

House (PBGC guy who is the guy that is supposed to make the decision) wrote to Feldman on Thursday, April 16, 2009, that he wanted a “very brief follow-up” discussion to “ensure that we’re acting responsibly/protective” as they moved toward terminating the pensions of non-union Delphi workers.

“[W]e’ve (PBGC) initiated our internal process here,” House added, seeking Feldman’s agreement, “which includes communications to designated reps at our Board agencies (Labor, Commerce, Treasury). Relatedly, that process contemplates newspaper publication of agency action, which we’re tentatively scheduling for end of next week.”

“Don’t want anyone on the auto-team to be caught flat-footed behind any of this,” House added. “I can give you 60 seconds of color when you have a moment.”

Feldman responded: “Understood. You should do what you need to.”

Four days later, Vince Snowbarger — then the PBGC’s acting director, and now its Deputy Director for Operations — emailed several PBGC officials internally. He relayed that the agency “anticipate[d] taking action to file for termination in both [Delphi’s] salaried and hourly plans before the week is out.”

“Given publication deadlines, this means action as soon as tomorrow,” Snowbarger continued, referring to the requirement to make a public statement in the form of a newspaper announcement.

“The action we are contemplating will preserve our position against those assets while the decisions about Delphi’s future are being decided,” he added.

Snowbarger also wrote that Obama administration officials had given him a green light. “The auto team at Treasury is aware of this potential and have indicated we should do what we need to do,” he wrote.

So the articles has the headline and initially argues that imply "PBGC is supposed to make the decision, but Obama and his administration did it instead! Rabble rabble rabble".

But if you actually read their "damning emails" you are presented with a very clear situation where the PBGC did their job, they made the decision to terminate the pension, they informed Treasury of their decision, and the Treasury simply said "ok".

The only way the Treasury of the Administration could be accused of interfering would be if they stopped the PBGC from carrying out their own decision.

GM and Delphi portions of the bailout plan. Those strategies, she wrote, including “pension issues,” would be “kicking off” that Monday.

But after the Friday meeting, House emailed PBGC staffers Karen Morris and John Menke. “We’ve been disinvited,” he wrote. “It’s for the best.”

“Who uninvited us?” Morris replied.

“Treasury,” House responded.

Ads by GoogleIt’s unclear how many additional meetings about the Delphi pensions took place, and whether PBGC staff were invited to participate in them. But Treasury excluded them from the meeting during which the discussions began, which is likely a violation of 29 U.S.C. §1342. Without a PBGC representative in the room, Treasury officials were legally prohibited from making decision about pensions — or even from moving toward them.

Read more: http://dailycaller.com/2012/08/07/emails-geithner-treasury-drove-cutoff-of-non-union-delphi-workers-pensions/#ixzz22s9UrQNt

“[W]e’ve initiated our internal process here,” House added, seeking Feldman’s agreement, “which includes communications to designated reps at our Board agencies (Labor, Commerce, Treasury). Relatedly, that process contemplates newspaper publication of agency action, which we’re tentatively scheduling for end of next week.”

“Don’t want anyone on the auto-team to be caught flat-footed behind any of this,” House added. “I can give you 60 seconds of color when you have a moment.”

Feldman responded: “Understood. You should do what you need to.”

Four days later, Vince Snowbarger — then the PBGC’s acting director, and now its Deputy Director for Operations — emailed several PBGC officials internally. He relayed that the agency “anticipate[d] taking action to file for termination in both [Delphi’s] salaried and hourly plans before the week is out.”

“Given publication deadlines, this means action as soon as tomorrow,” Snowbarger continued, referring to the requirement to make a public statement in the form of a newspaper announcement.

“The action we are contemplating will preserve our position against those assets while the decisions about Delphi’s future are being decided,” he added.

Snowbarger also wrote that Obama administration officials had given him a green light. “The auto team at Treasury is aware of this potential and have indicated we should do what we need to do,” he wrote.



Read more: http://dailycaller.com/2012/08/07/emails-geithner-treasury-drove-cutoff-of-non-union-delphi-workers-pensions/#ixzz22sA9UNKv

Just spoke with Matt Feldman,” House wrote. “He apologized for being out of touch most of the day, attributing the radio-silence entirely to GM bankruptcy-case issues.”

“He [Feldman] reported that he has made progress discussing our proposal with a number of key folks in Treasury and at [the] White House, but he has not yet wrapped up his coordination,” House continued. “He indicated that there is an 8 am call tomorrow that he’ll use to close the communication-loop, and he’s confident he’ll have a fully-vetted Treasury view after that call.”



Read more: http://dailycaller.com/2012/08/07/emails-geithner-treasury-drove-cutoff-of-non-union-delphi-workers-pensions/#ixzz22sAUWqwQ

d-usa wrote:Telling the treasury "hey, we are going to do this" is a little bit different than the treasury telling them "hey, you are going to do this".

Nothing in the law tells them that they cannot let anybody else know what they are planning on doing.

Manchu wrote:Breaking news: the interests of non-unionized workers are not protected.

Melissia wrote:Bankruptcy gets you out of a lot of debt. Pensions are debt owed by the company to its employees.

Did White House Commit Perjury About GM Bailout?
Wed, Aug 08 2012 00:00:00 E A12_ISSUES



Posted 08/07/2012 06:55 PM ET

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inShare.Cronyism: In recent days, the scope of the Obama White House's cronyism has become shockingly apparent. A trove of emails shows it deprived thousands of workers of their pensions to benefit unions, then lied about it.

The news site The Daily Caller has obtained internal government emails that show the U.S. Treasury Department, led by Timothy Geithner, pushed in 2009 to end the pensions of 20,000 non-union employees of GM's Delphi auto parts unit as part of the auto bailout.

What's truly outrageous is that, while those workers were cheated of their full pensions, union employees of the same Delphi company got their pensions paid.

This financially ruinous favoritism of union workers over nonunion workers is blatantly unfair, illegal and a violation of Constitutional guarantees of equal treatment under the law. And the reason is political.

By its own reckoning, organized labor spent nearly $400 million to get Obama elected in 2008, more by far than any other interest group. So it's no surprise the White House punished nonunion workers and rewarded union members when it came time to "bail out" GM.

Total value of the auto industry bailout to the unions was, by one estimate, $26 billion. For the unions, their $400 million was money well spent indeed.

What's disturbing is it now appears several White House officials may have lied about how this obvious favoritism came about. Looking at the record, Treasury and White House officials appear guilty not just of political malfeasance, but of perjury as well. On this, the Daily Caller's email cache is damning.

Matthew Feldman, a former Treasury Department official, and Ron Bloom, the White House's so-called auto czar, both sat on the Presidential Task Force on the Auto Industry in 2009.

Subscribe to the IBD Editorials Podcast Under oath, they testified it was the Pension Benefit Guaranty Corporation (PBGC) — the independent, quasi-governmental insurer of private pension plans — that ended the 20,000 workers' benefits. That doesn't seem to be true, as it turns out.

The email trail shows clearly that in April 2009 the Treasury Department held meetings on GM and Delphi, including "pension issues." However, the PBGC was, in the words of one official, "disinvited."

This was well before the decision, made in July, to stiff nonunion workers on their pensions. It suggests that the White House and Treasury were calling the shots — not the compromised, and politically bullied, PBGC.

This violates PBGC's independence under the law as the sole agency that can terminate a private pension — not Treasury. Worse, the PBGC, based on the emails, seems to have thought it needed to clear whatever it did with the White House and Treasury. It didn't.

As we argue in another editorial today, this crony socialism hasn't brought back the auto industry. No, it was bad for the auto industry and bad for America.

But worst of all, perhaps, it's convinced millions of Americans there's no longer a level playing field — that this hyper-politicized White House can reward its friends and punish its enemies with impunity.

We'd call for an investigation by the Justice Department, but we know where that would go: nowhere.