Home  »  Crime  »  Geithner Caught Killing Pensions Of Non-Union Workers, Saving Pensions Of Union Ones


Aug 7, 2012 Comments Off Pat Dollard

(THE DAILY CALLER) 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. One email dated Thursday, April 2, 2009 shows PBGC staffer Joseph House discussing a meeting he and his colleagues were anticipating with the entire auto bailout team the following day.

House emailed PBGC colleagues Karen Morris and Michael Rae that during the Friday morning meeting, the “agenda is everything — lead off with Chrysler, then we’ll get into GM/Delphi.”

Morris had written earlier that day that the PBGC team would “probably get invited to the Monday meeting at tomorrow’s meeting,” and that the Monday meeting would involve “talks” on the 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. It’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.

Also running counter to the PBGC’s mandate of independence was another email chain between Joseph House and Matthew Feldman, then a Treasury official and a key member of the Obama administration’s auto task force. Those emails show that the PBGC believed it needed to clear decisions and action plans through senior administration officials.

House 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 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.

2012-Aug-07 PBGC emails – DAILY CALLER

Keep Reading…