How Romney and Vulture Funds Milked the Auto Bailout
Sunday, October 21, 2012
"Romney’s 'job creators' did create jobs -- in China, where
Delphi now produces the parts used by GM and other major automakers
here and abroad."
Washington, D.C. - infoZine - Investigative reporter Greg Palast wrote
the just-published piece "Mitt Romney's Bailout Bonanza: How Mitt and
Ann made millions -- and Mitt's hedge fund donors made billions -- from
the auto-industry rescue that he condemned."
The
piece states: "Mitt Romney’s opposition to the auto bailout has
haunted him on the campaign trail, especially in Rust Belt states like
Ohio. There, in September, the Obama campaign launched television ads
blasting Romney’s November 2008 New York Times op-ed, 'Let
Detroit Go Bankrupt.' But Romney has done a good job of concealing,
until now, the fact that he and his wife, Ann, personally gained at
least $15.3 million from the bailout -- and a few of Romney’s
most important Wall Street donors made more than $4 billion. Their
gains, and the Romneys’, were astronomical -- more than 3,000
percent on their investment.
"It
all starts with Delphi Automotive, a former General Motors subsidiary
whose auto parts remain essential to GM’s production lines. No
bailout of GM -- or Chrysler, for that matter -- could have been
successful without saving Delphi. So, in addition to making massive
loans to automakers in 2009, the federal government sent, directly or
indirectly, more than $12.9 billion to Delphi -- and to the hedge funds
that had gained control over it.
"One
of the hedge funds profiting from that bailout -- $1.28 billion so far
-- is Elliott Management, directed by Paul Singer. According to The
Wall Street Journal, Singer has given more to support GOP candidates --
$2.3 million -- than anyone else on Wall Street this election season.
... He’s not only an informal adviser but, according to the
Journal, his support was critical in helping push Representative Paul
Ryan onto the ticket.
"Singer, whom Fortune magazine calls a 'passionate defender of the 1%,'
has carved out a specialty investing in distressed firms and distressed
nations, which he does by buying up their debt for pennies on the
dollar and then demanding payment in full. This so-called 'vulture
investor' received $58 million on Peruvian debt that he snapped up for
$11.4 million, and $90 million on Congolese debt that he bought for a
mere $20 million. …
"Of
the twenty-nine Delphi plants operating in the United States when the
hedge funders began buying up control, only four remain, with not a
single union production worker. Romney’s 'job creators' did
create jobs -- in China, where Delphi now produces the parts used by GM
and other major automakers here and abroad."