GM Could Be in Hot Water With FTC Over Truth in Advertising

[jpd80]

LINK
General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

The TV spot may land GM in hot water with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

But a top Senate Republican has accused GM of misleading taxpayers about the loan repayment, saying the struggling auto giant was able to repay a $6.7 billion bailout loan only by using other bailout funds in a special escrow account.

Iowa Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout — also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.

"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.

Ah so it looks like GM has paid out some of it's loans early to the US and Canadian governments
but they did it by dipping into Escrow Fund money given to GM by the government....

I knew GM couldn't be that smart to start earning a profit just like that..

[TUF_302]

GM sometimes act like they want to go down the gurgurler!, why not try building decent cars and making money that way!? :

[phillyc]

Originally Posted by jpd80

Ah so it looks like GM has paid out some of it's loans early to the US and Canadian governments
but they did it by dipping into Escrow Fund money given to GM by the government....

I knew GM couldn't be that smart to start earning a profit just like that..

Unbelievable, except that we are talking about GM here. Go bankrupt, write off the best part of $100B worth of debts (forcing others into bankruptcy), get a bailout of $60B from the US government, keep some of that money as working capital to be repaid, then get another wad of US government money in a trust account. Then use the trust account money to pay back the working capital. Then say, aren't we great... GM = Liars.

[Falc'man]

As noted in the other thread, this is serious stuff, but as you put it, Phil, there's something about GM that makes this not so much of a surprise.

[Jason[98.EL]]

what do you guys think the US government will do

me i think that they should charge the ceo with fraude or would that be going to far

Jason

[Joe5619]

Originally Posted by phillyc

Unbelievable, except that we are talking about GM here. Go bankrupt, write off the best part of $100B worth of debts (forcing others into bankruptcy), get a bailout of $60B from the US government, keep some of that money as working capital to be repaid, then get another wad of US government money in a trust account. Then use the trust account money to pay back the working capital. Then say, aren't we great... GM = Liars.

Pretty good summary up!!


It is amazing anyone at GM actually thought this was a good idea.. Goes to show they are still run by nobs!!

[Nikked]

Does GM even know what they are doing. there have been so many press releases saying what they're going to do (new cars, exports etc), but nothing happens...

[SVD]

Sounds pretty much like Holden...do you think Holden sent their PR/Advertising mob over to GM in the states?

[GrimmReaper09]

Why am I not surprised by this. In my personal experience......anything to do with GM or Holden is just a croc of ******** and not worth the paper the receipt is printed on.

Just my personal opinion.

[Wally]

I suspect the outcry is more Republican V Democrat than based purely on fact:

http://www.newsoxy.com/gm/repays-loans-12939.html

http://www.foxnews.com/opinion/2010/...payer-bailout/

[The G6ET Spot]

Originally Posted by Jason[98.EL]

what do you guys think the US government will do



Jason

The US government will do exactly the same thing our government would do to Holden if it were them.

And that is SFA as they will use the line that the compoany means so much to teh country pfft

[Deco28]

I'd just like to point out that GM has done nothing wrong.

It's like taking a 100k loan from the bank, 1 month later deciding I don't need that 100k anymore and paying it back with interest...

[jpd80]

Originally Posted by Deco28

I'd just like to point out that GM has done nothing wrong.

It's like taking a 100k loan from the bank, 1 month later deciding I don't need that 100k anymore and paying it back with interest...

Except they did it with money given to them in an Escrow Fund set up by the government.
Legally, they may not have transgressed but they are definitely misleading the public.

The US government will do nothing because they want the public to be confident in GM and buy shares
at the IPO later this year. I hope for the US taxpayers' sakes the Government gets as much as possible back.

[mik]

i feel sorry for those people that got the shaft from GM, the company might get back on its feet(one way or another), but those people will never see their dough.

[Brazen]

Mountain out of a molehill,

Use general revenue which includes TARP payments to pay back $6.7 Billion to the US govt.

In the end $6.7 Billion has been paid back.

[bobthebilda]

Originally Posted by SVD

Sounds pretty much like Holden...do you think Holden sent their PR/Advertising mob over to GM in the states?

Your probably not too far from the truth there SVD. When Reuss left australia to take up his post of Head of North America, He took Jason Laird (Head of Holden corporate affairs) with him.

Obama is going to do everything he can to keep GM alive, and if it means selling a dud company back to American investors, at least he can say he saved them.

[jpd80]

Originally Posted by Brazen

Mountain out of a molehill,

Use general revenue which includes TARP payments to pay back $6.7 Billion to the US govt.

In the end $6.7 Billion has been paid back.

That money came from an escrow fund set up by the government.

For GM to proclaim that they are paying back debt years ahead of time
and use taxpayers money to do it is a bit rich.

[Wally]

Originally Posted by U.S. Senator Chuck Grassley of Iowa is the ranking member of the Senate Finance Committee and a senior member of the Judiciary and Budget Committees

However, to understand the disclosure you have to be a sophisticated investor with time to pore over the fine print buried in massive SEC filings and government reports prepared by independent watchdogs with teams of auditors

Well obviously he doesn't know about Ford Forums ability to cut through all the techincal stuff and tell it as it is.

[ebxr8240]

Originally Posted by Wally

Well obviously he doesn't know about Ford Forums ability to cut through all the technical stuff and tell it as it is.

VERY good... Lol...
So if I get a loan to to pay my Visa off .. I have paid back my loan... Aha yea.. Keep it up G.M you'll go broke again...
Though it's all smoke and mirrors... Tell em what they want to hear..
The more things change .. The more they stay the same...

[Brazen]

Originally Posted by ebxr8240

VERY good... Lol...
So if I get a loan to to pay my Visa off .. I have paid back my loan... Aha yea.. Keep it up G.M you'll go broke again...
Though it's all smoke and mirrors... Tell em what they want to hear..
The more things change .. The more they stay the same...

TARP funds were not to be payed back, so its more like using your tax return to pay off the loan.

[FPV GTHO]

GM will get a slap on the wrist and told to withdraw the adds. I'd be surprised if the government pushes for anything more considering its in their best interests to see GM continue to recover and generate interest for a future share sale.

[phillyc]

http://www.leftlanenews.com/top-repu...ack-loans.html

Originally Posted by left lane news

Top Republican questions GM/administration over TARP funds used to pay back loans
04/22/2010, 10:56 PMBy Mark Kleis
A top Senate Republican, Charles Grassley, questioned the Obama Administration regarding the recent announcement by General Motors that all federal loans had been repaid. Grassley believes that the loans were in fact paid back with other federal bailout funds – not from profits due to the operation of the automaker.


GM announced on Wednesday that it had fully repaid the $6.7 billion in loans from the U.S. government, and $1.4 billion in loans to the Canadian government. Today, according to Fox News, a Republican Senator has questioned the legitimacy behind that announcement.

Senator Charles Grassley accused both the Obama Administration and GM of misleading taxpayers about the true status of the automaker’s government-sourced loans. Grassley accused the automaker of using funds from a different part of the government funded bailout in order to pay back its loans.

Grassley’s charge was verified by the inspector general behind the bailout, who oversees the Trouble Asset Relief Program (TARP) funding. Special inspector general of the TARP program, Neil Barofsky, told the Senate Finance Committee and Fox News that GM used bailout money out of an escrow account in order to pay back other government loans. Grassley mentioned in his letter to treasury secretary Timothy Geithner that a form filed with the Securities and Exchange Commission (SEC) showed $6.7 billion worth of taxpayer funds were sitting in an escrow account available to GM.

Grassley questioned Geithner, asking for public clarification about why GM was allowed to use taxpayer funds from the escrow account in order to pay back a taxpayer-funded loan. “It appears to be nothing more than an elaborate TARP money shuffle,” said Grassley in his letter.

Following GM’s triumphant announcement on Wednesday, Vice President Joe Biden said the repayment was a “huge accomplishment.”

“The bottom line seems to be that the TARP loans were ‘repaid’ with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials,” wrote Grassley.

[jpd80]

Originally Posted by Brazen

TARP funds were not to be payed back, so its more like using your tax return to pay off the loan.

Yes they are loans and most financial institutions have repaid the money or in the process of repaying.
In a way it's good that GM is reducing its debt load but they are doing it by also reducing their ready cash.
The money the Government invested in GM is now locked up in ownership and can only be released at the
Initial Purchase Offer of stock later this year, if they don't get a good price, the taxpayers of USA will be the big loser, not GM.

Claiming that taxpayers have been reimbursed in full is exceedingly deceptive.

[jpd80]

Also, GM is carrying a book value of $70B, which is far more than it's worth; therefore the $46B that taxpayers have sunk in GM right now is worth far less than $46B.

The taxpayers have not, in any meaningful sense, been repaid or made whole......

[Nikked]

So in plain english, GM is paying back a lone with a lone?

[Falc'man]

Originally Posted by phillyc

http://www.leftlanenews.com/top-repu...ack-loans.html

You see, it's way more complex than that. If you don't have a degree in banking (like wally the banker does) there's no way you can understand what or how GM did this, okay? Even the guy you quote seems to know nothing, because it's complex, and he's only the "Special inspector general of the TARP program". It's like, you know, just... look... I mean... it's okay... believe me!

[Wally]

Do have a secret crush on me or something? Sniping members, anyone for that matter is so...well .... you know ... school girly.

[Falc'man]

Originally Posted by Wally

Do have a secret crush on me or something? Sniping members, anyone for that matter is so...well .... you know ... school girly.

How about you stop taking digs at this forum and it's members, or maybe just... you know... stop defending the indefensible, it's foolish.

[Wally]

How about you read what is written, instead of putting your obvious hatred of me to the continuous test. You and your cohorts have not ceased with the subdefuge and malice from day one. All because you decided me owning a Holden was tantamount to high treason, little matter I have owned and operated Fords for nearly as long as you've been on this planet. Your binary thinking might be in lock step with many here, but surely someone of your obvious intelligence can do better than react spitefully to a bias you yourself have imposed on those who don't pander to your beliefs?

Insofar as the thread goes, you yourself admit it is complex, yet you allow no orbit for anyone to have an opinion because you have decided it's far to complex for the rest of us simpletons too. I have no qualms that GM are masters at the art of corporate chikanery, they are a US company all said and done.

You hold the power my friend, how are you going to handle your new role, with probity or persecution?

[Falc'man]

All I read was sarcasm. So you got some back.
Anyhow, you need to take it easy and disconnect for a while. An internet discussion is not supposed to upset you.