Over the past week or so we have noted the fraudulent General Motors public relations blitz promoting its supposed repayment of the money it owes the United States government. GM chairman and chief executive officer Edward Whitacre led off the blitz in the Wall Street Journal column “The GM bailout: Paid back in full.” GM followed up Whitacre’s announcement with a an equally misleading advertisement featuring Whitacre.
I wrote about GM’s public relations blitz here, here, and here. The third of these three posts includes the video of GM’s ad featuring Whitacre.
Whitacre and GM omitted two facts that render their public relations blitz highly misleading. They are the kind of omissions that constitute securities fraud when made by a company in connection with the purchase or sale of a security or when a company reports its financial results.
First, Whitacre and GM omitted any mention of the remaining $50 billion or so that the government has sunk in the company’s equity. Second, Whitacre and GM omitted any mention of the source of the funds with which GM “repaid” the loan. According to TARP Special Inspector General Neil Barofsky, the source of the funds in whole or in substantial part was the United States government TARP program, not GM earnings.
GM’s fraudulent public relations blitz took place with the support of the Obama administration, up to and including Secretary of the Treasury Timothy Geithner. Geithner’s participation makes his tax cheating and related testimony pale in comparison.
In retrospect, it is obvious that GM undertook the blitz at the behest of the Obama administration. It is symptomatic of the era of national socialism in which we find ourselves, and for which GM is a leading indicator.
Gretchen Morgenson tells the story in the Business section of today’s New York Times. Morgenson credits Senator Charles Grassley for his role in exposing the fraud, calls out Geithner et al. for supporting it, and makes all the key points. Amazing.
UPDATE: Looking at the New York Times profile of Morgenson, I see that she is a Pulitzer Prize-winning alumna of St. Olaf College in Northfield, Minnesota, and of Forbes.