President Obama loves taking credit for saving the American auto industry and this week a federal audit reveals that the rescue effort has fleeced U.S. taxpayers out of an astounding $9.7 billion.
While this may seem inconceivable to most, the numbers don’t lie. The United States Treasury has recorded a $9.7 billion loss on its $49.5 billion bailout of General Motors, according to a report released this week by the Special Inspector General for the Troubled Asset Relief Program (TARP). Remember the $700 billion boondoggle created to help stabilize the nation’s financial system during the 2008 crisis by purchasing “toxic assets?”
A chunk of the cash went to GM, the struggling Detroit-based auto maker that has publicly celebrated being clear from all government loans. In fact, GM held a ceremony at a Kansas City factory in 2010 to announce it had paid back $8.1 billion in government loans. “As of today, GM has repaid in full and interest,” the company’s CEO, Ed Whitacre, told the crowd. Obama has many times touted the success of the government’s bailout of GM.
To shove it down the nation’s collective throat as a triumph, numbers have been kept from the public until now. Part of the bailout included taxpayers’ ownership stake in GM, the forced purchase of so-called toxic assets. Not surprisingly, the stock sales have all taken place “below Treasury’s break-even price,” the TARP watchdog found. That means taxpayers must take the bewildering $9.7 billion hit.
The new report also documents billions of dollars in fraud and corruption associated with TARP throughout the nation. They include multi-million-dollar bank fraud and Ponzi schemes, foreclosure rescue scams and a number of other illicit operations using TARP funds. In fact the IG’s report discloses in detail many of the TARP-related crimes that have been prosecuted throughout the country, including more than a dozen states and the District of Columbia.
Getting back to the GM debacle, just a few weeks ago Judicial Watch revealed as part of an ongoing TARP investigation, that the government lost or wrote off $1.6 billion invested in GM since the beginning of this year alone. The figure came from Treasury documents obtained by JW. To get an idea of the rapid rate of loss, the files reveal a shocking $477 million loss during a small period between May 6 and the end of June.