The amendment sponsor was Republican Steve LaTourette of Ohio. 215 Democrats and 4 Republicans voted for the overall package. Bipartisanship!

The most snort-worthy reaction from the White House:

The White House said Wednesday it strongly opposes the measure, arguing it would “set a dangerous precedent, potentially raising legal concerns, to intervene in a closed judicial bankruptcy proceeding on behalf of one particular group.”

Funny, Democrats had no problem advocating radical intervention in closed judicial bankrupty proceedings before.

And dealer favoritism by the White House, not Congress, is precisely what a majority of Democrats apparently think is the problem that needs fixing.

The WSJ broke the news on Friday about Obama’s new “pay czar,” Kenneth Feinberg.

His official title as executive-pay-limiter-in-chief: Special Master of Compensation.

Can’t wait to see his logo.

Next up: Obama appoints the…

…Distinguished Overlord of Oxygen Intake (to limit individual human carbon emissions);

…Royal Captain of Calorie Consumption (to limit weight gain and end obesity);

…Exalted Diva of Diversity Broadcasting (to enforce the Fairness Doctrine and limit exposure to excessive, poisonous conservative opinion on the airwaves).

***

History footnote: The term “special master” is a legal term referring to court-appointed volunteers who ensure that judicial orders are followed. In common law, “special masters in lunacy” handled psychiatric cases.

“Masters in lunacy” fits the Obama administration nicely, doesn’t it?

Zero Hedge covers a court hearing involving terminated Chrysler dealers with some follow-up on its previous analysis of Dealergate and possible Clinton-tied cronyism in Arkansas.

Tyler Durden points to one very interesting declaration from Ethel L. Cook, a Chrysler dealer based in Little Rock. Click on his post for the PDF link to the full testimony, but here’s an excerpt:

Having reviewed the pattern of assumption and rejection of dealers throughout their region, I have detected a pattern: In every market where there is a dealership connected with former Penske Automotive executive Steve Landers, or his new automotive partnership with “Mac” McLarty (former Chief of Staff for President Clinton) and Robert L. Johnson (majority owner of the Charlotte Bobcats), the competitors are rejected.

In the Little Rock, Landers Chrysler Dodge Jeep is located far out of town in Benton, Arkansas. Nevertheless, the two Little Rock dealers, Cook and Crain were rejected.

In the Fayetteville, Arkansas area, Landers-McLarty Dodge Chrysler Jeep is located far out of town in Bentonville, Arkansas. Competitors Springdale Dodge Chrysler, Steve Smith County Jeep and Jones Brothers were all rejected.

In the Shreveport, Louisiana market, Lee’s Summit Dodge Chrysler Jeep (a Landers McLarty dealership) is located in Bossier City, Louisiana. Both competitive dealers, Claude de Beaux in Vivian, Louisiana and Greater Birmingham Dodge Chrysler in Shreveport were rejected.

In the Springfield, Missouri market, Tri-Lakes Motors (a Landers-McLarty dealership) is located in Branson, Missouri. Competitors Heritage Chrysler Jeep in Ozark, Missouri and Ramsay Motor Company in Harrison, Arkansas were rejected. A pattern seems to be emerging. Everywhere there is a Landers-McLarty dealership, Chrysler has rejected the competition.

In the Huntsville, Alabama market, Landers McLarty Dodge Chrysler Jeep, is located in Huntsville. Competitor Cloverleaf Chrysler Dodge Jeep was rejected.

Favoritism and cronyism towards preferred dealer group is not a valid exercise of business judgment.

It’s official. General Motors has filed for bankruptcy. Government Motors is now in business, with a perpetual taxpayer lifeline:

General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.

As it reorganizes, the fallen icon of American industrial will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

George W. Bush stuck the key in the bailout ignition.

Barack Obama floored the gas pedal.

The taxpayers got stuck with a lemon for life.

***

Commenter John424: “Tell me again why we had to give billions to GM and Chrysler? Oh yeah, to avoid bankruptcy and all of the attendant problems associated with it. RIP America. We hardly knew ye.”

Crikey. A community organizer is now auto-exec-in-chief. And a 31-year-old (almost) law school grad with no knowledge of the auto industry is in charge of dismantling GM:

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

***

From the White House background fact sheet on GovMo:

General Motors Restructuring – Shared Sacrifice

· UAW: The modified labor agreement reached between the UAW and GM will be operative and will be assumed by the New GM.

The statistical gurus at financial blog Zero Hedge have taken a hard, long look at the question of Dealergate and cronyism. They’ve made their preliminary findings available here. Using regression analysis, they tackled the relationship between dealership survival and Clinton donor status – and found a significant correlation:

This puzzled us. Why would there be a significant and highly positive correlation between dealer survival and Clinton donors? Granted, that P-Value (0.125) isn’t enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statistians would not call this a “find” as 95% confidence intervals are the gold standard for this sort of work. Nevertheless, it seems clear that something is going on here. Specifically, the somewhat low probability that the Clinton data showing higher survivability of Clinton donors could result just from pure chance. But why not better significance with any of the other variables? Why this stand out?

Then we got to thinking. Steven Rattner, the Car Czar, is married to Maureen White, one-time national finance chairman of the Democratic National Committee. What does Maureen do now? From her website:

Maureen White is currently Chairman of the Board of Overseers of The International Rescue Committee (IRC), a member of the North American Advisory Board for the London School of Economics, and a National Finance Chair of the Hillary Clinton for President Campaign. (emphasis ours)

That website looks dated, but you get the idea.

Again, we want to point out that our findings are preliminary and subject to change. But whatever the result, the Administration has made themselves very vulnerable by taking charge of the dealership closing decisions.

Doug Ross weighs in and reiterates a point I made last week: “It is incumbent that “Car Czar” Rattner and the Obama administration immediately disclose — with their vaunted ifull transparency’ — the methods used to select dealerships for closure.”

Thomas Lamb pursues the cronyism of color angle.

The bloggers are continuing their intriguing work. Doug has a new post here shedding more light on Mack McLarty/Robet Johnson’s dealerships. Joey has more info on Lithia Motors here.

As I’ve stated from the beginning, there is still much to be researched on this issue. Given Obama’s Chicago gangland propensities, anything corrupt is possible.

Some professional journalists, however, have shown obstinate unwilligness to get to the bottom of the decision-making process.

The Washington Post’s business columnist Steven Pearlstein was asked about the story yesterday in an online Q&A. He scoffed:

Boonsboro, Md.: A bit off the topic, but have you or anyone at the Post investigated this? Chrysler dealers shut down in Obama bankruptcy are mostly Republican? It seems a crosscheck of dealerships to be closed versus donations shows almost all the dealers to be closed donated to Republicans. http://hotair.com/

Steven Pearlstein: Oh, please. What percent of all auto dealers are Republican? I bet its (sic) pretty high.

Well, why don’t you use all your professional journalism training and find out the answer, Mr. Pearlstein? And why don’t you look at the flip side of the question — as “amateur” bloggers have been doing — and investigate the circumstances of the protected dealers?

Pearlstein is not alone in dismissing the blogosphere out of hand. The impulse to denigrate blogs is borne of professional protectionism.

Ace reflects on the conservative blog-MSM dynamic:

Here’s a dilemma for conservatives. The MSM will not investigate any of these claims, ever. So what is a conservative to do? If a conservatives admit that this line of inquiry seems unlikely to turn up malfeasance, the MSM uses such statements as pretexts to not bother to even check, and uses such statements against conservatives who are agitating for additional investigation — “Even conservatives think this is unlikely, so you guys are obviously crazy…”

Of course I want this looked into, of course. It’s my guess it’s a non-story, not my expert opinion.

But the MSM is so ridiculously biased that they make honesty a dangerous and politically counterproductive business.

The only way to even get the MSM to do their jobs and take a look is to pressure them by claiming Worst Scandal Eveh, even if we don’t all necessarily buy that. But we have to claim that in order to spur any sort of media interest whatsoever. (That interest, of course, coming in the form of stories like Conservatives Now So Crazy They Think Obama Is Closing Chrysler Dealerships for Political Advantage, which isn’t exactly the headline we seek, but that’s the best we can hope for from the MSM.)

A few quick points: I do think that eventually, the MSM will come around to investigating. If they find anything at all that confirms the politicizing of the process, they’ll either whitewash it, downplay it, or take credit for exposing it with little or no credit to the bloggers who first started digging. They’ll also ignore the fact that some of us early on have made the caveat from the start not to make too-broad claims.

I also don’t think it’s necessary to over-sell the story in order to get more mainstream coverage. The fact is, Missouri senators have already pressed the White House for more transparency on the closure decision-making process.

Do the rest of the MSM’s business journalists take Pearlstein’s arrogant “Oh, please” position that the answers are not even worth pursuing?

***

Jim Hoft has further info/commentary.

Bloggers are doing excellent work digging into the Chrysler dealership closure list. Yesterday, I cautioned against making sweeping claims that all the dealerships targeted for closure were partisan victims. On the flip side, bloggers are examining the protected dealerships that were spared by the Obama administration.

Joey Smith reports:

In my analysis of the Chrysler dealers that will remain open, I came across one dealer group that stood out to me.

The company is called RLJ-McLarty-Landers, and it operates six Chrysler dealerships throughout the South. All six dealerships are safe from closing. The dealer locations are:

1. Bentonville, AR (northwest Arkansas)
2. Lee’s Summit, MO (south of Kansas City, MO)
3. Branson, MO
4. Olathe, KS (near Kansas City)
5. Bossier City, LA (near Shreveport)
6. Huntsville, AL

The interesting part is who the three main owners of the company are. The owners are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas “Mack” McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA’s Charlotte Bobcats).

Doug Ross points to an interesting post by Thomas Lamb on Maxine Waters’ statements regarding minority-owned dealerships.

Stay tuned.

***

Related: Plan to ax dealers not Chrysler’s decision -lawyer

***

Dear Car Czar, let’s have some transparency, please:

U.S. Sens. Claire McCaskill and Kit Bond wrote a letter Friday to President Barack Obama’s auto task force seeking answers to concerns raised by Chrysler and General Motors dealerships in Missouri that learned last week their contracts will be terminated.

Auto dealers statewide have expressed frustration to McCaskill and Bond about the lack of information they have received from Chrysler and GM, saying they didn’t know the criteria used to make the contract termination decisions.

The two Missouri senators asked the task force for the criteria used to determine how many and which dealerships would be terminated, as well as the process for dealerships to appeal decisions.

“Many Missouri dealers are asking us why certain profitable dealers, costing the auto companies nothing, were selected for closure,” McCaskill, a Democrat, and Bond, a Republican, wrote to White House car czar Steve Rattner. “From this perspective it appears an arbitrary standard may have been used to make these decisions … these dealers deserve a little more than just a pink slip in the mail.”

There have been several interesting and informative blog posts published recently on the Chrysler dealership closure “hit list.”

Posts by Joey Smith, Doug Ross, and on Free Republic shed light on the campaign contributions of the targeted dealers — who happen to lean Republican.

Is Obama capable of such Chicagoland thug tactics? Of course he is, and I’ve pointed out many cases of it over the past two years.

But I would caution against getting carried away with “Nixon enemies list” rhetoric until a thorough vetting of the dealers on the list is done — which may take a while, but can definitely be expedited through the same kind of crowd-sourcing that has already taken place.

Fact is: Some of the GOP dealers on the list don’t deserve a whole hell of a lot of sympathy. Or my tax dollars.

Here are two examples from my own cursory review of the Republican donors listed by other bloggers:

Florida GOP Rep. Vern Buchanan is on the list. What no one has mentioned, though, is that he has a record of financial shadiness and his dealerships have been embroiled in fraud lawsuits.

Then there’s Illinois/Missouri car dealer James Auffenberg, Jr., who was recently acquitted by a Virgin Islands jury in a massive tax and wire fraud case — but still may face civil action to collect millions in alleged unpaid taxes.

It’s unpopular to say, but there are probably many dealerships on the list that deserve to be closed down.

One more point about the political correlation: It may just be that more Republican-leaning businessmen than Democrat-leaning ones gravitate toward the car dealership business to begin with, which could explain the apparent disproportionate partisan impact.

In any case, it’s too early to start painting them all as victims of a politically motivated witch hunt.

Keep digging.

Like the “Cory the Driller” open letter that resonated last year with small businessmen, Asness’s cri de coeur has touched a nerve. Let’s hope his peers on Wall Street listen and learn.

***

Battered Hedge Fund Managers’ Syndrome
by Michelle Malkin
Creators Syndicate
Copyright 2009

Greed is good – until it gets in the way of a union-friendly restructuring deal. President Obama, generous recipient of Wall Street largesse, angrily derided a group of hedge fund managers this week as “speculators.” The miffed president suggested that uncooperative firms were selfish for holding out on the government’s Chrysler bankruptcy plans and refusing to make “sacrifices” to benefit the United Auto Workers.

The “sacrifices” involved Chrysler debt holders agreeing to sell the debt to the government at prices determined by union-beholden bureaucrats instead of bankruptcy courts. The hedge firms balked. Obama sneered that the dissenters were looking for “unjustified taxpayer-funded bailout.” But the holdouts never took banking bailout funds from Washington. And the targeted financial executives were simply doing what good money managers are supposed to do: put their clients’ fiduciary interests first.

Obama’s corporate-bashing rhetoric should, of course, come as no shock. During the campaign and continuing through his first 100 days, he has routinely attacked the “ethic of greed.” When Sen. John McCain publicized Obama’s wealth redistribution comments to Joe the Plumber, Obama snarked that McCain was “fighting for Joe The Hedge Fund Manager” and was “in cahoots with Joe the CEO.” First Lady Michelle Obama also singled out hedge fund managers for scorn, urging young people to turn away from unrewarding work on Wall Street for more fulfilling jobs in the “helping industry.”

But behind the public lashings, the Obamas were all too happy to pass the plate around the pews of the Church of “Greed.” According to the Center for Responsive Politics, hedge funds and private equity firms donated $2,992,456 to the Obama campaign in the 2008 cycle. Obama, vocal critic of the campaign finance practice known as “bundling,” accepted more than $200,000 in bundled contributions from billionaire hedge-fund manager James Torrey, more than $100,000 in bundled contributions from billionaire hedge-fund manager Paul Tudor Jones and more than $50,000 in bundled contributions from billionaire hedge-fund manager Kenneth C. Griffin, chief executive officer of Citadel Investment Group in Chicago.

No less than 100 Obama bundlers are investment CEOs and brokers: nearly two dozen work for financial giants such as Lehman Brothers, Goldman Sachs or Citigroup. By comparison, Evil Republican Rich Guy John McCain received $1,699,525 from the industry.

Obama lambastes the “system and the culture” of the un-helping industry. But he is so much a part of – not apart from – the very climate he condemns. “Speculators” fill many of the top positions in the Obama White House. Hedge fund manager Larry Summers heads the National Economic Council. White House chief of staff Rahm Emanuel made millions as an investment banker at Wasserstein Perella. Vice President Joe Biden’s son, Hunter, made a comfy living in the hedge fund business until he got entangled into an ongoing mess with the shady Paradigm Capital Management involving fraud and giant Ponzi schemes.

Yes, there are rotten hedge fund managers who have squandered billions of dollars without accountability – not unlike the government bailout and stimulus fund managers in Washington who continue to throw good money after bad. President Obama demagogues the unpopular industry because it fits the popular narrative – Wall Street bad, Washington good. Like battered wives, most hedge fund managers who supported Obama have tolerated the abuse futilely hoping it will stop.

Until this week, that is. In an extraordinarily candid open letter to Obama, hedge fund manager Cliff Asness defended his industry from the president’s “backwards and libelous” charges. “Managers have a fiduciary obligation to look after their clients’ money as best they can, not to support the President, nor to oppose him, nor otherwise advance their political views,” Asness wrote. He has oversight of some $20 billion at AQR Capital Management, LLC , which is not involved in the Chrysler case.

Asness minced no words: “The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him…Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.”

Business as usual in the Era of Hope and Change. Perhaps demonized entrepreneurs will finally learn that when the dog you feed bites your hand, you don’t roll up your sleeve and give him your arm. You get a new dog.

Malkin is the author of the forthcoming “Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies (Regnery 2009).

Tom Lauria represents a few of the non-TARP Chrysler creditors. He reported the threats on WJR radio host Frank Beckmann’s radio show in Detroit:

Zero Hedge summarizes and surmises:

In an interview of momentous importance, WJR’s Frank Beckmann interviews Tom Lauria, the Head of Restructuring at top five law firm White & Case, in which the lawyer, who represents Chrysler hold-out hedge funds Stairway Capital and Oppenheimer Funds, discusses on the record the amazing treatment by the White House of Perella Weinberg, which initially had been a transaction hold out but after threats by the White House (not my words) was forced to drop their objection and go with the administration. Says Lauria:

“One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight…That was Perella Weinberg.”

…The full interview with Tom Lauria below is a must hear for everyone as it discloses not only the administration’s strong arming tactics in black and white, but also discloses some other critical facts that the president on his regular TV appearances has failed to mention such as:

- First lien holders were willing to accept a 50% discount on their positions, however the 71% demanded by the administration was seen as too much.
- The cash going to Junior claims (creditors below the first liens) will be between $10 and $20 billion, a number which in practice should satisfy a par recovery for the 1st liens if the Absolute Priority Rule was actually withheld.
- Among the creditors are not just vulturous hedge funds but “pensioners, teachers, credit unions, college endowments, retirement plans, and personal retirement accounts.”

In conclusion, Lauria summarizes the developing Chryslerf#%k best:

“The President is trying to abrogate contractual rights; if he will attack that contractual right, what right will he not attack?”

The only surprise is that anyone is surprised. The coercion cow has been out of the barn for a while now.

Chutzpah:

Chrysler’s got $4 billion in emergency aid from the U.S. government and has said it will seek another $3 billion in government loans. And yesterday it agreed to form an alliance with Italy’s Fiat as it looks for the road out of the woods.

(The Fiat deal fine print reportedly makes it conditional on Chrysler’s getting that extra U.S. loan.)

But the troubled auto maker is not letting its economic ails keep it from going to the movies.

Chrysler plans to help underwrite the fourth installment of the “Terminator” movie series, “Terminator Salvation,” where it will place its vehicles in cameo roles. The film is scheduled for release later this year. Financial terms of the sponsorship deal were not disclosed.

“This spring, Terminator 4 comes out and we will be one of the sponsors,” Chrysler director of media Susan Thomson said in a presentation at the Automotive News World Congress. “We have a following with the Terminator movies and we are going to continue with that.”

Operation Three Little Piggies Alert: How can they keep the terms of the film deal secret while they suckle from the public teat?

I’m shocked, shocked. Failing auto maker Chrysler needs more of our money to stay afloat. And they need it now. On top of that, Chrysler Financial is negotiating a separate request for its own massive cash infusion a la the GMAC deal.

And on top of that, the automakers are still grubbing for $25 billion from the Energy Department.

Oink, oink, oink:

Chrysler LLC is seeking $3 billion in additional government aid and its finance arm is in advanced talks with the U.S. Treasury to obtain a multi-billion cash infusion that could be finalized by Friday, officials said.

Chrysler is the only one among Detroit’s Big Three automakers seeking immediate additional aid. General Motors Corp. said it had no plans to seek more aid beyond the $13.4 billion the U.S. Treasury Department is loaning it from the $700 billion Wall Street rescue fund, known as the Troubled Asset Relief Program, or TARP…

The Bush administration is working to complete action on financing help for Chrysler Financial LLC before it leaves office on Jan. 20. A government official involved in the talks said it would be less than the $6 billion package GMAC LLC received.

“We’re very hopeful that (with) continued support from the Treasury and access to the TARP funds for Chrysler Financial that we’ll be able to provide additional retail support,” Nardelli said. “Our hope is we would get that resolved within a week or so.”

Chrysler Financial’s request is separate from Chrysler’s request for $3 billion, Chrysler spokeswoman Shawn Morgan said.

Nardelli declined to say how much Chrysler Financial was seeking but said he hoped “it would provide the kind of support for us in a similar fashion that GMAC was able to provide to GM.”

After receiving its TARP money, GMAC announced new financing deals for customers and dropped its credit requirement for loans from a score of 700 to 621.

GM CEO Rick Wagoner called the government’s decision to aid GMAC “a huge plus.” GM owns 49 percent of the finance company. Cerberus Capital Management LP, also Chrysler majority owner, holds the other 51 percent. “We are going to see some very significant changes in GMAC’s ability to fund both wholesale and retail (lending),” Wagoner said. Those loans will be “on a more cost competitive basis. … Frankly, over time it’s going to be a strategic advantage for us.”

Neel Kashkari, the assistant Treasury secretary who heads the TARP program, last week explained why it was important for the government help GMAC. “The finance companies serve as the lifeblood of the automakers,” he said. “We knew that our program would need to address the short-term needs of the auto finance companies as well.”

Detroit’s automakers also are seeking loans from a $25 billion Energy Department retooling program to help modernize factories to build more fuel-efficient models.

If it’s Monday, it’s time to play Squealing for Dollars.