The painful and fruitless existence of Smith Electric Vehicles, waster of $32 million in U.S. taxpayer funds, has been extended after yet another near bankruptcy.
The Kansas City electric delivery truck manufacturer, whose actual business negotiates in government grants, tax breaks and other subsidies – rather than a product anyone actually wants to pay for – had announced at the end of September, via its British investor Tanfield Group, that it needed to raise $4.5 million by October 2nd and $10 million by the end of the month. Without the cash infusion, Tanfield said, “the company is likely to be forced to seek protection under US bankruptcy laws or close down its operations.”
Yesterday Tanfield notified its own investors that Smith Electric had “raised a loan” of $2.9 million thanks to help from – as you might guess – a Chinese manufacturer, FDG Electric Vehicles Limited… Read More ➡
The Wall Street Journal has reported that the UAW’s voluntary employees’ beneficiary association (VEBA) fund was underfunded by approximately $20.7 billion in 2014, which was the latest reported period. The shortfall has grown from the previously reported 2013 figure when the trust was estimated to be 93% funded. The latest funding figure, which was hurt by growing medical benefits costs, plummeted to 74% in one year.
The VEBA fund was established in order to transfer liability of retiree medical benefits costs from General Motors, Ford and Chrysler (now Fiat Chrysler Automobiles) to the UAW prior to GM going bankrupt in 2009. In fact, the fund was one of the primary driving forces of GM’s bankruptcy as the company agreed to fund the account with $30 billion as part of the agreement; money they didn’t have.
Total net assets for the VEBA trust stood at about $60 billion in 2014. … Read More ➡
The Supreme Court has declined to hear an appeal from Rep. Charles Rangel (D-NY) who was seeking to overturn his Censure by the House of Representatives. Lower courts had ruled that they have no jurisdiction over internal workings of the House.
Rangel was Censured by the by the entire House of Representatives on December 2, 2010 by a vote of 333-79, the first such action in 27 years.
The action was the result, in part, of investigations by NLPC. Among the counts alleged by the Ethics Committee were Rangel’s failure to pay taxes on rental income from a Dominican Republic beach house, and his failure to report hundreds of thousands in income and assets on his financial disclosure forms.
In August 2008, the NLPC staff reviewed Rangel’s disclosures and noticed that he has a home in the Dominican Republic, but reported little or no rent. We sent an investigator to … Read More ➡
If there is an issue that has united popular indignation, Left and Right alike, executive compensation surely ranks near or at the top. But the bipartisan opposition to recent pay increases for the CEOs of mortgage conduits Fannie Mae and Freddie Mac, while highly understandable, misses the larger point. Several months ago, these companies, which account for nearly half the outstanding home mortgage debt in the U.S. and which since 2008 have been wards of the government, announced plans to raise annual CEO pay from $600,000 to $4 million. Their overseer, the Federal Housing Finance Agency, approved the hikes. In response, Congress overwhelmingly has passed (or is on the verge of passing) bills to roll them back. Lawmakers would do better to allow the firms to operate freely and without subsidies.
National Legal and Policy Center has visited the travails of these two companies many times over the last … Read More ➡
General Motors’ CEO, Mary Barra, continued to project a bright future for the automaker during a recent presentation to shareholders. The prognostication gave a rosy appraisement for financial estimates as far out as 2020, when Barra says GM will have between $9 billion to $10 billion in free cash flow. Her crystal ball also shows that electric cars will compete with gas-powered vehicles by 2022 and that global car sales will increase by 50% to 130 million by the year 2030.
It is very difficult to predict future profitability in the very cyclical auto industry, but GM is desperate to give its shareholders some hope. GM share price has far underperformed broader markets since the company’s 2010 IPO and still trades below the $33 offering price. The S&P 500 index has gone up by about 70% compared to GM’s decline since trading began. Putting aside the fact that 2020 cash … Read More ➡
An electric truck manufacturer that was awarded $32 million from President Obama’s stimulus program has informed one of its investors that it is on the verge of bankruptcy, if it did not raise $4.5 million by Friday and $10 million by the end of October.
The troubled saga of Smith Electric Vehicles should be particularly sickening for taxpayers because it sprouted out of a similar failed company, of the same name, in Great Britain. Smith, as part of the U.K.-based Tanfield Group, stumbled out of Europe and re-established itself in Kansas City – opportunistically at the time that President Obama was rolling out his plans to “stimulate” the “green” energy sector in early 2009.
More on that momentarily, after a look at Smith’s current desperation. According to reports from investment Web sites in England, Tanfield – which currently holds a 5.8 percent ownership stake – was notified last week … Read More ➡
John Boehner’s Speakership was a setback for Congressional ethics. He backslid on a number of important reforms, and helped to return the Ethics Committee to its traditional role of covering up wrongdoing by incumbent members of Congress.
Boehner ally Rep. Charles Dent (R-PA), the Chairman of the Ethics Committee, is currently orchestrating a whitewash of apparent House rules violations related to a junket by ten House members to Azerbaijan in 2013.
On July 31, the Ethics Committee announced that it had found “no evidence” that the ten broke House rules. It plans “no further action regarding this matter and considers it closed.”
For ethics groups, however, the matter is far from closed. In fact, both liberal and conservative groups, along with reform advocates like Norm Ornstein, are demanding the Committee release a report on the trip compiled by a separate entity, the Office of Congressional Ethics (OCE).
According to the … Read More ➡
The response of the Justice Department to General Motors’ ignition switch defect cover-up was announced last week. GM’s failure to address the deadly defect led to the loss of lives of at least 169 people. Any hopes for the families of the victims that the crony status of GM would not stand in the way of justice were squashed as the company was given a slap on the wrist by its friends at the Obama Administration.
The Justice Department’s news release regarding the meager $900 million penalty reeked of hypocrisy as it tried to paint a picture of a repentant GM while admitting the company was guilty as charged. From the release:
SIGTARP Special Inspector General Christy Goldsmith Romero said: “General Motors’ criminal conduct found by SIGTARP and our law enforcement partners defies comprehension. Our investigation uncovered that GM learned about a life-threatening ignition switch defect that would cause air
… Read More ➡
Fiat Chrysler Automobiles’ CEO Sergio Marchionne’s quest to merge his company with General Motors continues to garner attention and draw suggestions that GM might be shooting itself in the foot by ignoring the offer to talk. Two respected sources weighed in on the drama, most notably CNBC anchor and ex-hedge fund manager Jim Cramer who has lost confidence in GM management and dumped his shares of the company.
In a TheStreet.com piece, Cramer was rightfully complimentary of Marchionne’s talents. Marchionne is a savvy leader who took advantage of the Obama Administration’s desperation, lack of vision and poor negotiating skills during the 2009 auto bailout process when the Italian automaker was given a free stake in a sinking Chrysler corporation at the low point of the auto sales cycle. Cramer was also right on point with his criticism of GM CEO Mary Barra. From the piece:
As for Cramer, he said
… Read More ➡
The latest batch of publicly-released State Department emails provide more evidence that a $10 million loan from the Overseas Private Investment Corporation (OPIC) to Clinton Foundation donor Claudio Osorio was made as a result of pressure from Bill and Hillary Clinton.
The loan to a company named InnoVida, owned by Osorio, was supposed to be for building houses in earthquake-ravaged Haiti, but Osorio used the money to finance a lavish lifestyle. Osorio is currently in prison for fraud. OPIC is an independent agency but submits its budget through the State Department.
The Clintons’ efforts to push the OPIC loan were uncovered by NLPC’s Ken Boehm and Tom Anderson. They spent many hours at both the state and federal courthouses in Miami going through documents related to the InnoVida case.
The emails also illustrate how close Clinton supporters like Jonathan Mantz have run a lucrative influence-peddling operation. Mantz was Hillary’s 2008 … Read More ➡