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Thursday, August 5, 2010

Why Is No One Bothered......

Reading the news this morning I came across a story that just exemplifies the current state of our business and government environment. The article appears in the Washington Post, titled “GM donates $41,000 to lawmakers’ pet projects” and is written by T.W. Farnam. This short piece details how GM suspended its political giving last year when it went in to bankruptcy, but now is beginning to return to the practice. GM is donating again since it has used the advertising smoke screen of claiming to have repaid the TARP (troubled asset relief program) funds 5 years early. I will not bore you dear reader with the intricate details of how GM supposedly paid of the TARP, as there are many articles out there that have thoroughly researched their 8K filing. Let’s just say that the method they used to pay it off was akin to trying to raise the level of water in your swimming pools’ shallow end by taking water in a bucket from the deep end to accomplish the feat. Basically they moved TARP funds around claiming to have paid off the debt while using other TARP funds not actual earnings…well you get the picture…it is not kosher but a great PR campaign. Needless to say dear reader, you and I and every other American tax payer are still the proud owners of GM since the government still holds a 61% equity stake. I find this unbelievable that GM has the lack of moral compass to think that their donations would be considered even remotely acceptable.

It is unimportant who or what GM donates to, but the reality is that it is essentially a taxpayer entity and this sets the precedent for the government donating to itself, on its behalf or to groups that it favors or furthers its agenda. Furthermore, there are many taxpayers, now owners of GM, that may be opposed to where some of these dollars are going. Additionally, these taxpayers find themselves without a say in the matter even though it is technically their taxpayer dollars are supporting GM. Where is the outrage?

We are getting in to murky ethical ground here. If GM were a privately held or publicly traded company not attached in any way to the government teat, then no one has a right to say anything about where they send company money, with the exception of share or stake holders. Until all the connections to the taxpayer and government are severed GM should be using whatever money it makes to actually pay off what it owes the American people and also invest in itself. Congress should step up to the plate and ban any donations of money from TARP entities until they can stand on their own business footing and are truly free and clear of TARP. I can’t fathom why there are no rules about this, but I guess the equation must be political donations good, pay for performance bad, remember the “Pay Czar”.

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1 comment:

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