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 ➡ “Congress Says ‘No’ to Fannie Mae/Freddie Mac CEO Pay Hike; Misses Big Picture”
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 ➡ “Barra’s Rosy Proclamations Should Embolden UAW”
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 ➡ “Electric Truck Company Looks Like Next Stimulus-Funded Bankruptcy”
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 ➡ “With Boehner Going, Ethics Committee Must Release Azerbaijan Junket Report”
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 ➡ “No Justice for General Motors’ Victims”
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 ➡ “GM Should Listen to Marchionne’s Pitch”
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 ➡ “Hillary Emails Shed Light on Clintons’ Role in Loan to Fraudster”
Lawyers for Senator Robert Menendez (D-NJ) recently asked that several of the counts in the indictment be thrown out because the investigation started after “unproven allegations” that Menendez has sex with underage prostitutes.
In response, the government says it has “corroborated” evidence of this misconduct, even though Menendez was not criminally charged with it. Paul Mulshine of The Newark (NJ) Star-Ledger, has a good account of this legal misstep.
Menendez lawyers did not challenge the counts in the indictment based on Menendez advocacy of a port security deal in the Dominican Republic that would have provided a windfall for his biggest donor and co-defendant, Dr. Salomon Melgen.
Mulshine also discusses the port deal and NLPC’s role in exposing it:
The guy who uncovered that was Tom Anderson of the National Legal and Policy Center, a conservative-leaning ethics watchdog group. Interestingly enough, it was not NLPC but the liberal-leaning Citizens
… Read More ➡ “Menendez Legal Move Backfires”
The following letter was today sent to House Ethics Committee Chairman Charles Dent (R-PA), in photo, and Ranking Member Linda Sanchez (D-CA):
We are writing to express deep concern about the House Ethics Committee’s decision to withhold the findings of the Office of Congressional Ethics (OCE) related to its investigation of Member and staff travel to Azerbaijan. The Committee’s action, along with its order to OCE to “cease and refer” without the Committee having officially started an investigation, sets a dangerous precedent that could fundamentally undermine the important benefits that OCE has brought to the House ethics process.
On July 31, the House Ethics Committee issued its report, “In the Matter of Officially- Connected Travel by House Members to Azerbaijan in 2013” (“the Ethics Committee Report”). In the Ethics Committee Report, the Committee concluded that no Members knowingly violated House ethics rules and standards while raising concerns about possible criminal … Read More ➡ “Ethics Groups Demand Ethics Committee Release Azerbaijan Junket Report”
Rumors have circulated that General Motors is considering building Buick SUVs in China which would be sold both there and in the USA. The timing of the leaked plans could not be worse as China markets continue to collapse, spreading contagion to world markets. The timing also coincides with GM’s negotiations with the UAW, raising the suspicion that GM is using the rumor to leverage their bargaining power with the UAW.
Why is GM focusing so much on the Chinese market at the worst of times? Regardless of the weakening Chinese economy, it would be challenging to convince American consumers to purchase SUVs built in China given the perception of lower quality and safety standards. China also has not been the best of US allies considering ongoing computer hacking allegations, aggressive military build-ups and unfair currency devaluation tactics.
The UAW should call GM’s bluff on its Chinese gambit. If GM … Read More ➡ “Buicks Made in China – More Bad GM Timing”