[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





 THE ADMINISTRATION'S AUTO BAILOUTS AND THE DELPHI PENSION DECISIONS: 
                   WHO PICKED THE WINNERS AND LOSERS?

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON TARP, FINANCIAL SERVICES
              AND BAILOUTS OF PUBLIC AND PRIVATE PROGRAMS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 10, 2012

                               __________

                           Serial No. 112-178

                               __________

Printed for the use of the Committee on Oversight and Government Reform









         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

  Subcommittee on TARP, Financial Services and Bailouts of Public and 
                            Private Programs

              PATRICK T. McHENRY, North Carolina, Chairman
FRANK C. GUINTA, New Hampshire,      MIKE QUIGLEY, Illinois, Ranking 
    Vice Chairman                        Minority Member
ANN MARIE BUERKLE, New York          CAROLYN B. MALONEY, New York
JUSTIN AMASH, Michigan               PETER WELCH, Vermont
PATRICK MEEHAN, Pennsylvania         JOHN A. YARMUTH, Kentucky
JOE WALSH, Illinois                  JACKIE SPEIER, California
TREY GOWDY, South Carolina           JIM COOPER, Tennessee
DENNIS A. ROSS, Florida












                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 10, 2012....................................     1

                               WITNESSES

The Honorable Christy Romero, Special Inspector General for The 
  Troubled Assets Relief Program, United States Treasury 
  Department
    Oral Statement...............................................     6
    Written Statement............................................     9
Mr. Ron Bloom, Former Member of the Automotive Task Force, United 
  States Treasury Department
    Oral Statement...............................................    27
    Written Statement............................................    29
Mr. Matthew Feldman, Chief Legal Advisor, United States Treasury 
  Department's Auto Team
    Oral Statement...............................................    33
    Written Statement............................................    35
Mr. Harry Wilson, Former Member of the Automotive Task Force, 
  United States Treasury Department
    Oral Statement...............................................    38
    Written Statement............................................    40
Mr. Todd Zywicki, Professor of Law, George Mason University
    Oral Statement...............................................    65
    Written Statement............................................    67

                                APPENDIX

Report on GM Agreements With Unions Give Rise to Unique 
  Differences in Participant Benefits............................   109
Timeline of Interview Requests...................................   163
Follow up questions from Delphi Audit Interviews.................   165
A prepared statement from The Honorable Elijah E. Cumings, a 
  Member of Congress from the State of Md to The Honorable 
  Darrell E. Issa, a Member from Congress from the State of 
  California, Prepared Statement.................................   166
Harry Wilson Tapped By Teamsters To Rescue Ailing Trucking 
  Company And Union Jobs.........................................   175
The Honorable Patrick McHenry, a Member of Congress from the 
  State of North Carolina, Opening Statement.....................   177
The Heritage Foundation Backgrounder, Auto Bailout or UAW 
  Bailout?.......................................................   179
The Honorable Paul Ryan, a Member of Congress from the State of 
  Wisconsin, Prepared Statement..................................   193
CAR Research Memorandum..........................................   194

 
 THE ADMINISTRATION'S AUTO BAILOUTS AND THE DELPHI PENSION DECISIONS: 
                   WHO PICKED THE WINNERS AND LOSERS?

                              ----------                              


                        Tuesday, July 10, 2012,

                  House of Representatives,
     Subcommittee on TARP, Financial Services, and 
           Bailouts of Public and Private Programs,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 2247, Rayburn House Office Building, Hon. Patrick T. 
McHenry [chairman of the subcommittee] presiding.
    Present: Representatives McHenry, Guinta, Ross, Quigley, 
Maloney, and Speier.
    Also Present: Representatives Turner, Kelly, Johnson, and 
Cummings.
    Staff Present: Will L. Boyington, Majority Staff Assistant; 
Molly Boyl, Majority Parliamentarian; Drew Colliatie, Majority 
Staff Assistant; John Cuaderes, Majority Deputy Staff Director; 
Adam P. Fromm, Majority Director of Member Services and 
Committee Operations; Linda Good, Majority Chief Clerk; Tyler 
Grimm, Majority Professional Staff Member; Christopher Hixon, 
Majority Deputy Chief Counsel, Oversight; Jaron Bourke, 
Minority Director of Administration; Kevin Corbin, Minority 
Deputy Clerk; Ashley Etienne, Minority Director of 
Communications; Devon Hill, Minority Staff Assistant; Jason 
Powell, Minority Senior Counsel; Brian Quinn, Minority Counsel; 
Safiya Simmons, Minority Press Secretary; and Davida Walsh, 
Minority Counsel.
    Mr. McHenry. The Committee will come to order.
    This hearing is entitled The Administration's Auto Bailouts 
and the Delphi Pension Decisions: Who Picked the Winners and 
the Losers?
    We have a distinguished panel before us today, but it is 
always the order of this Subcommittee by reading the Oversight 
and Government Reform Committee's mission statement. The 
Oversight Committee mission statement: We exist to secure two 
fundamental principles: first, Americans have a right to know 
that the money Washington takes from them is well spent and, 
second, Americans deserve an efficient, effective government 
that works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers, because taxpayers 
have a right to know what they get from their government. We 
will work tirelessly in partnership with citizen watchdogs to 
deliver the facts to the American people and bring genuine 
reform to the Federal bureaucracy.
    And that is what this hearing is about, the auto bailout 
decision and the winners and the losers that resulted from 
this.
    We have a distinguished panel here today, and I will begin 
by recognizing myself for five minutes.
    Today's hearing is about the transparency in government and 
fulfilling this Committee's commitment to provide the American 
people with answers and accountability. When Congress passed 
the Troubled Asset Relief Program, known as TARP or the 
bailouts, in October of 2008, at the height of the financial 
crisis, it was designed with a specific purpose: to take toxic 
assets off the books of large banks and financial institutions.
    While today's intention is not to re-litigate TARP or the 
bailouts, it is important to discuss their consequences and, 
indeed, there are consequences. When the Government 
orchestrates a bailout, it is clear that there will be both 
winners and losers.
    While some of my colleagues will spend a great deal of time 
talking about bailout winners, it is unlikely that you will 
hear them spend much time talking about the bailout losers.
    Although their losses were significant, we are not here to 
discuss bond holders, who took a haircut in the auto bailout. 
We are here today to focus on non-unionized retirees at Delphi, 
who watched part of their pensions disappear while some of 
their coworkers were made whole. Those coworkers whose pensions 
were left intact were members of the United Auto Workers Union 
and they are clear winners of the auto bailouts.
    A recent study from one of today's witnesses, George Mason 
University law professor Todd Zywicki, calculated that United 
Auto workers received approximately $26 billion from taxpayers 
via the auto bailouts that they would not have received had 
they been treated according to standard bankruptcy principles. 
Mr. Zywicki is a witness here today and we look forward to 
hearing from him.
    When the Pension Benefit Guaranty Corporation terminated 
the pensions of all Delphi retirees, General Motors agreed to 
top-up, or make whole, their obligations to unionized workers. 
At the same time, the non-unionized workers took significant 
cuts in their pensions.
    Despite the fact that GM's promise to the Union could have 
been thrown out in bankruptcy, like so many of GM's other non-
unionized commitments were, the Union agreement was kept in 
place. That was a decision made by the Government.
    The Special Inspector General for the Troubled Asset Relief 
Program has been seeking answers to questions about the 
irregularities of the Delphi pension decisions. Ms. Romero is a 
witness here today as the Special Inspector General for TARP.
    We are here today because for over a year three of the key 
figures involved in the GM and Chrysler bailouts have refused 
to meet with the Special Inspector General. I am grateful that 
they showed today, and we are very interested in hearing their 
testimony and the reasons for not meeting with the Special 
Inspector General.
    On May 9th, the Special Inspector General notified the 
Committee that three former Obama Administration officials 
before us today, Mr. Bloom, Mr. Feldman, and Mr. Wilson, had 
been uncooperative with the Special Inspector General's audit. 
These three individuals come from diverse backgrounds and 
possess different expertise, but together represent leading 
figures from President Obama's Auto Task Force. All three of 
these individuals made pivotal decisions which are projected to 
cost taxpayers $23 billion and have left many Delphi retirees 
with drastically reduced pensions, while preserving full 
pensions for Delphi's unionized retirees.
    These are the consequences of the bailouts.
    So, with that, I would recognize the Ranking Member, Mr. 
Quigley of Illinois, for five minutes, and following that I 
will recognize Mr. Turner from Ohio for five minutes for an 
opening statement, and if the gentleman would like five 
additional minutes, we would be willing to grant that.
    Mr. Quigley. Thank you, Mr. Chairman. I appreciate that. I 
am sure it won't be necessary in today's hearing. I want to 
thank the Chairman for holding this hearing.
    No one understands or appreciates the importance of 
transparency and strong oversight in government more than 
members of this Committee. Congress created the Office of 
Special Inspector General for the Troubled Asset Relief 
Program, SIGTARP, and members of Congress asked SIGTARP to 
perform its Delphi audit.
    Unfortunately, SIGTARP's audit has been stalled because 
they have not been able to interview three of the witnesses 
here today, Ron Bloom, Matt Feldman, and Harry Wilson, who are 
all former members of the Administration's Auto Task Force.
    In preparation for this hearing, the Democratic staff spoke 
with all three individuals and discovered they are willing to 
be interviewed by SIGTARP. This is a positive development and I 
am glad that SIGTARP will now be able to complete its audit.
    SIGTARP's audit should complement the thorough work GAO has 
already completed on the Delphi pension issue. GAO published 
its findings on Delphi pensions in December of 2011. The GAO 
concluded that ``Treasury deferred to GM's business judgment 
and that Treasury did not explicitly approve or disapprove of 
GM providing top-ups.'' Those are conclusions supported by the 
evidence gathered by GAO.
    Today I am looking forward to hearing an update from 
SIGTARP on the progress of its audit, and I will be eager to 
read its final report upon completion.
    But the most important conclusion that should be drawn from 
the Auto Task Force actions is that they helped save more than 
a million American jobs. As President Obama recently said, I 
was betting on the American worker and I was betting on 
American industry, and three years later the American auto 
industry is coming roaring back.
    Thank you, Mr. Chairman. One second.
    [Pause.]
    Thank you, and I yield back.
    Mr. McHenry. I thank the Ranking Member. In the Ranking 
Member's opening statement he suggested what we received in an 
email at 5:46 yesterday from the Minority staff, that you have 
a commitment from the three Auto Bailout Task Force members 
today that they will meet with SIGTARP and fulfill that request 
that has been longstanding with them, and I thank the Ranking 
Member for getting those commitments and I thank the Minority 
staff for getting those commitments because it has been well 
over a year in the works of SIGTARP trying to get Mr. Bloom, 
Mr. Feldman, and Mr. Wilson to submit themselves for 
depositions.
    With that, I would like to enter into the record the time 
line of interview requests from SIGTARP, beginning on May 5th 
of 2011 and going through May 16th of 2012, including an email 
we received last night at 9:40 p.m. from SIGTARP explaining 
that the three witnesses in question had no communications of 
any sort, indicating that they will make themselves available 
for the requested interviews in conjunction with our audit.
    So without objection, those two documents will be entered 
into the record.
    Mr. McHenry. Again, this is bipartisan work and I 
appreciate the willingness, Mr. Quigley, of you and Minority 
staff and counsel to get those commitments, so we are hopeful 
that transparency is served from that, and I know the gentleman 
has been very active on those issues of transparency and 
government. So thank you.
    With that, I will recognize Mr. Turner of Ohio, who has 
been a leader on the subject matter of this hearing, for five 
minutes for the purposes of an opening statement.
    Mr. Turner. Thank you, Mr. Chairman. I would like to thank 
you and Chairman Issa and, of course, Chairman Jordan for the 
work that has been done on this issue and for holding this 
important hearing today.
    Today's hearing continues our efforts to uncover why the 
Treasury Department, the Auto Task Force, and the Pension 
Benefit Guaranty Corporation chose to terminate the hard-earned 
pensions of Delphi salaried retirees in the course of its 
multibillion dollar taxpayer-funded bailout of General Motors.
    Contrary to what the Vice President said recently on one of 
his campaign stops, that these retirees are doing fine, they 
are not doing fine. Thousands of retirees lost their pensions, 
many of which are in my community in Dayton, Ohio, as a result 
of the Administration's decisions during the auto bailout.
    Appearing on CNN this Sunday, White House Chief of Staff 
Jack Lew proclaimed that this Administration is the most 
transparent ever. Well, not on this issue, and we are going to 
find out why today.
    Understandably, I have serious concerns about how this 
Administration, including the three members of the Auto Task 
Force we have before us, have continued to stonewall, provided 
silence on these issues, and repeated failures to disclose 
information that are critical to the issues that have affected 
almost 20,000 people across the Country and that was done with 
taxpayers' dollars. This is not a venture that was undertaken 
with your own money, it was undertaken with taxpayers' money. 
And the openness that this Administration promised needs to be 
enforced.
    In part, we are here today because the three former Auto 
Task Force members refused to meet with, speak to, or testify 
before the Special Inspector General for the TARP program. It 
is my hope that we will shed light on who within the 
Administration made the decision to cut the hard-earned 
retirement benefits of these Delphi salaried retirees and that 
perhaps the Administration's policy of denying access to this 
information, hiding behind backroom deals stops.
    I want to thank Christy Romero and SIGTARP for being here 
today and for your honesty in your letter. You wrote us a 
letter that said that SIGTARP believes that the Auto Task Force 
played a role in the pension decision and these individuals' 
failure to speak to SIGTARP on this issue poses a significant 
obstacle to SIGTARP's ability to complete this audit. And then 
you acknowledged that you didn't have an ability to subpoena 
these three gentlemen to make them testify.
    You also acknowledge in your written testimony that you 
commenced this as a result of several members of Congress, 
including myself, asking you to undertake the audit to get 
questions answered about how this process went forward.
    Mr. Bloom, Mr. Feldman, and Mr. Wilson, the happy train of 
silence and refusing to answer questions ends today. You have 
been summoned before Congress because of your refusal to answer 
SIGTARP's questions because they didn't have the ability to 
compel you. You are here today because you know we do. You 
didn't come here because you believed you wanted to share 
information with Congress; you were brought here because of 
your refusal to share the information that the American public 
is entitled to hear as a result of taxpayers' dollars that were 
used in the auto bailout of General Motors and thousands of 
people that lost their pensions. There is an accountability 
here.
    Now, you are going to take an oath when you testify today. 
This is not a political proceeding; this is a legal proceeding. 
You will be testifying; you will not be giving speeches. That 
is why you are sworn in. It is called testifying before 
Congress. And in that I want you to rise to the level of 
understanding what the obligation is. It means that if you 
don't speak truthfully in front of us, that obviously you can 
be subject to perjury or disbarment or other types of 
consequences, because Congress takes people appearing before us 
seriously.
    Now, we are hearing and we are looking forward to hearing 
from you, that you are now willing to cooperate, and I want you 
to also be aware that during that process of supposedly 
cooperating with SIGTARP, we have the ability to continue to 
enforce it. We have the ability to bring you in for depositions 
under oath, bring you back before Congress again. If the 
information you provide is not complete and is not thorough, 
you will continue to have your happy train of silence met here 
with Congress, where the American people require answers, 
because you served in a public position with public dollars and 
public obligations, and today we are going to have public 
questions.
    Thank you, Mr. Chairman.
    Mr. McHenry. I thank the gentleman from Ohio.
    Members will have seven days to submit opening statements 
for the record.
    We will now recognize our panel of witnesses today.
    The Honorable Christy Romero is the Special Inspector 
General for the Troubled Asset Relief Program, United States 
Department of Treasury; Mr. Ron Bloom, Mr. Matthew Feldman, and 
Mr. Harry Wilson are all former members of the Automotive Task 
Force at the United States Department of Treasury; Ms. Nikki 
Clowers is the Director of Financial Markets and Community 
Investment at the Government Accountability Office. Thank you 
for your service. Mr. Todd Zywicki is a professor of law at 
George Mason University School of Law and a senior scholar at 
the Mercatus Center.
    As you all well know, this Committee swears in witnesses 
before their testimony, so if you would all please rise and 
raise your right hands, you will be sworn before your 
testimony. Raise your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. McHenry. You may be seated.
    Let the record reflect that the witnesses answered in the 
affirmative.
    You all are well practiced at testifying before Congress. 
As you well know, we have the light system here. Green means, 
as we know from traffic schools or, if you have tickets, 
repeated traffic schools, green means go; yellow means hurry 
up; and red means stop. You have five minutes to summarize your 
testimony in order to allow for discussion and questions 
afterwards.
    We will begin with Ms. Christy Romero for five minutes.

                       WITNESS STATEMENTS

           STATEMENT OF THE HONORABLE CHRISTY ROMERO

    Ms. Romero. Chairman McHenry, Ranking Member Quigley, and 
members of the Committee, I am very honored to appear before 
you today and very much want to thank you for holding this 
hearing.
    SIGTARP was created to protect the interest of those who 
funded TARP, and that is the American taxpayers, and an 
important part of SIGTARP's mission is to bring transparency to 
decisions that were made by the Government in the wake of the 
financial crisis. By examining the past, we can take advantage 
of lessons learned so that we can better protect taxpayers in 
the future. In addition, taxpayers have an absolute right to 
know the decisions that went into how TARP dollars were spent.
    The Government provided approximately $80 billion in TARP 
funds in the auto bailout, and SIGTARP has brought transparency 
to decisions made by Treasury and the Auto Task Force in the 
auto bailout. We seek to bring greater transparency to GM's 
decisions to provide funds to top-up the pensions of certain 
hourly workers who were at Delphi Corporation, who were 
formerly employed by GM, and who were represented by one of 
three unions.
    We are conducting an audit review of Treasury's role in 
that decision and whether the Auto Task Force pressured GM to 
provide additional funding for those pensions. We have closely 
coordinated with GAO, who conducted similar, but not 
duplicative, reviews.
    We have experienced significant delay by the refusal to be 
interviewed by the three former Treasury officials who served 
on the Auto Team: Mr. Bloom, Mr. Wilson, and Mr. Feldman. The 
former co-head of the Auto Team, Mr. Rattner, only agreed to be 
interviewed this May. These individuals were heavily involved 
in the TARP assistance to GM and GM's restructuring, and have 
knowledge about the pension issues.
    We first requested from Treasury interviews of these former 
Treasury officials in May 2011. Months later Treasury told us 
that the individuals would not meet with SIGTARP, while other 
members of the Auto Team would. We contacted these individuals 
directly while reviewing documents and interviewing other 
witnesses. We asked Treasury to speak to these former Treasury 
officials about the importance of cooperating with SIGTARP. 
When it became clear that the individuals would not agree to be 
interviewed, we informed this Committee.
    The lack of cooperation by these former Treasury officials 
has significantly protracted SIGTARP's review. We were forced 
to look elsewhere for the information. While we continued to 
request their cooperation, we reviewed more than 100,000 pages 
of documents, but those documents do not provide a complete 
picture. We often find in our audits a lack of detailed and 
complete documentation of decision-making related to TARP. Many 
discussions and decisions are made in meetings and telephone 
calls; interviews of government officials are essential to gain 
a complete picture. Documents such as emails simply do not tell 
the whole story.
    We interviewed others who might have information. We 
interviewed 43 current and former officials from GM, Delphi, 
three unions, PBGC, the Auto Team, and DSRA, which represents 
certain Delphi salaried workers whose pensions GM did not top-
up. Information from these witnesses and documents led SIGTARP 
to determine that Mr. Wilson, Mr. Feldman, and Mr. Bloom were 
the government officials who were involved in the Delphi 
pension decision and discussions.
    SIGTARP does not have the ability to compel witness 
testimony. There is no valid reason for these former Treasury 
officials to refuse to be interviewed. Treasury suggested that 
SIGTARP's interviews are unnecessary because GAO already 
determined Treasury's role and because Mr. Wilson and Mr. 
Feldman were deposed in GM and Delphi's bankruptcies. GAO did 
not conduct interviews of Treasury's role or whether there was 
any pressure by the Auto Team, instead deferring to SIGTARP. 
Also, we have read the depositions and still find it necessary 
to conduct the interviews.
    The refusal by these former Treasury officials to speak to 
SIGTARP poses a significant obstacle to our ability to complete 
the audit and to taxpayers gaining a full understanding of the 
discussions and considerations in GM's decision. Our need to 
speak with them is significant. That is balanced with the fact 
that there is no hardship for these individuals to come talk 
with us. Other important and very busy government officials 
have been interviewed by SIGTARP, including Secretary Geithner, 
former Secretary Paulson, Chairman Bernanke, and former 
Chairman Bair.
    Also, and this is very important, it sets a dangerous 
precedent if former Treasury officials who worked on TARP 
programs are allowed to evade SIGTARP's oversight and refuse to 
be interviewed. Such a precedent could potentially impact all 
of our ongoing and future audits. Most of the government 
officials who worked on TARP have since left government 
service.
    I want to thank the Committee for always supporting 
SIGTARP, and I am available to answer any questions that you 
have.
    [Prepared statement of Ms. Romero follows:]





    
    Mr. McHenry. Thank you, Ms. Romero, and thank you for your 
service to our Government.
    Mr. Bloom, you are recognized for five minutes.

                     STATEMENT OF RON BLOOM

    Mr. Bloom. Mr. Chairman and members of the Committee, good 
morning. While I am here today at your request in my capacity 
as a former Treasury official, I left the Treasury Department 
in February of 2011 and left government service in September of 
2011. I am, therefore, not in a position to discuss events 
since February 2011 or anything concerning possible future 
actions.
    During the period of my government service, I testified 
regarding the Treasury's automotive investments in front of the 
Senate Banking Committee on June 10th, 2009; the House 
Judiciary Commercial and Administrative Law Subcommittee on 
July 21st, 2009; the Congressional Oversight Panel on July 
27th, 2009, and February 25th, 2010; and the House Subcommittee 
on Regulatory Affairs, Stimulus Oversight, and Government 
Spending on June 22nd, 2011. In addition, I participated in 
numerous meetings and discussions, and helped prepare and 
deliver written and oral responses to countless inquiries of 
SIGTARP, GAO, Congressional Oversight Panel, and individual 
elected officials and staff from both the House of 
Representatives and the Senate.
    I understand that the Committee has taken an interest in 
issues regarding the pensions of certain former employees of 
the Delphi Corporation. As you may know, I was named as a 
defendant in a lawsuit in federal court regarding that issue. 
On September 2nd, 2011, I was dismissed from the case, as was 
Treasury and the President's Auto Task Force.
    When President Obama took office, the American automobile 
industry was on the verge of collapse. In the year prior, the 
industry lost over 400,000 jobs and, as 2008 came to a close, 
both GM and Chrysler were running out of cash and faced the 
imminent prospects of uncontrolled liquidations. The collapse 
of the U.S. auto industry posed a substantial risk to financial 
market stability and the economy as a whole. Therefore, the 
previous Administration provided $24.8 billion to the auto 
industry.
    After studying the restructuring plan submitted by GM and 
Chrysler, President Obama decided that he would not commit any 
additional taxpayer resources to these companies without 
fundamental change and accountability. He rejected their 
initial plans and demanded that they develop more ambitious 
strategies to reduce cost and increase efficiencies.
    However, President Obama also recognized that failing to 
stand behind these companies would have far-reaching 
consequences. GM and Chrysler were supported by a vast network 
of auto suppliers which employed three times as many workers 
and depended on the automaker's business to survive. An 
uncontrolled liquidation of a major automaker would have had a 
cascading effect throughout the supply chain, causing failures 
and job losses on a much larger scale. Because Ford and other 
auto companies depended on those same suppliers, the failure of 
the suppliers could have caused those auto companies to fail as 
well. Also at risk were the thousands of auto dealers across 
the Country, as well as small businesses in communities with 
concentrations of auto workers.
    It was this interdependence that led some experts at the 
time to estimate that at least one million jobs could have been 
lost if GM and Chrysler went under. Widely respected economist 
Mark Zandi recently stated that 2.5 million jobs were at risk. 
These were grave risks at a time when our economy was losing 
750,000 jobs per month; credit markets were still not 
functioning properly; bank lending had contracted substantially 
and there was no chance of securing private lending on a scale 
sufficient to save GM and Chrysler.
    To avoid uncontrolled liquidations, the President decided 
to give GM and Chrysler a chance to show that they could take 
the tough and painful steps to become viable companies. Working 
with their stakeholders and the President's Auto Task Force, 
both GM and Chrysler underwent fair and open bankruptcies. This 
process required deep and painful sacrifices from all 
stakeholders, including workers, retirees, suppliers, dealers, 
creditors, and the countless communities that rely on a vibrant 
American auto industry. The steps that the President took 
avoided a catastrophic collapse of the entire auto industry and 
kept hundreds of thousands of Americans working.
    Today the American automobile industry is mounting a 
comeback. In 2011, GM, Chrysler, and Ford increased their U.S. 
market share for the second year in a row. Exports of motor 
vehicles in 2011 increased by 21 percent over 2010. This 
increase in market share and exports has translated into more 
American jobs. Since 2009, the auto industry has added over 
233,000 jobs, the fastest pace of job growth in the auto 
industry since 1997. In addition, since 2009, GM and Chrysler 
have announced investments totaling over $11.5 billion.
    In a better world, the choice to intervene in GM and 
Chrysler would not have had to be made. But amidst the worst 
economic crisis in a generation, the Administration's decisions 
avoided devastating liquidations and provided the American auto 
industry a new lease on life and a real chance to succeed.
    I am prepared to do my best to answer your questions.
    [Prepared statement of Mr. Bloom follows:]





    Mr. McHenry. Mr. Feldman, you are recognized for five 
minutes.

                  STATEMENT OF MATTHEW FELDMAN

    Mr. Feldman. Thank you.
    Mr. Chairman and members of the Committee, I understand 
that I have been requested to appear today before you to 
discuss my role with the Treasury Department's Auto Team, which 
I joined in March of 2009 as chief legal advisor and on which I 
served until August of 2009.
    The Treasury Department recruited me to join the Auto Team 
from my career as an attorney in private practice, where I 
specialized in reorganizing and restructuring large businesses, 
not unlike the American automobile manufacturers that were in 
significant financial distress at that time in 2009.
    I believe that the work of the Auto Team contributed to a 
successful effort to avert disastrous consequences to both the 
American automobile industry and the American economy as a 
whole. I am fiercely proud of my service and I am prepared 
today to assist the Committee in reaching a complete 
understanding of the Auto Team's work during what was a 
difficult time and an unprecedented challenge for all involved.
    Although it is wonderful to see the dramatic recovery of 
the automobile manufacturers and the thousands of American jobs 
that were saved as a result of our work, I am mindful that the 
restructurings that the Auto Team worked on required many 
Americans to make great personal sacrifices. As a result of the 
Delphi Corporation bankruptcy, for example, Delphi and the 
Pension Benefit Guaranty Corporation were forced to terminate 
Delphi's pension plans, which means that there are Delphi 
retirees who, unfortunately, will collect less than their full 
pension benefits.
    Delphi had underfunded its hourly pension plan and, later, 
its salaried pension plan well prior to filing for bankruptcy 
protection, a situation that ultimately threatened General 
Motors' future success as it exited from its own bankruptcy. 
Because General Motors viewed a well-motivated workforce at its 
largest supplier as critical to ensuring an uninterrupted 
supply chain, General Motors made the commercially reasonable 
and necessary decision to honor certain top-up agreements it 
entered into in 1999 with the United Auto Workers and certain 
other unions when Delphi was first spun off from General 
Motors. Sadly, many of Delphi's employees did not have top-up 
agreements with General Motors, and some of those employees 
will face a shortfall in their pension payments as the PBGC 
assumes responsibility for their plans.
    The Auto Team agreed that honoring the top-up agreements 
was a prudent business decision, and we believed that doing so 
would protect both General Motors and the American taxpayers' 
collective investment in the company. We supported General 
Motors' business decision and I remain convinced today that it 
was the best course of action available at that time.
    While I am pleased that General Motors and other American 
automobile manufacturers have become successful, profitable 
contributors to our economy, I recognize that the restructuring 
process imposed painful, but necessary, sacrifices on many of 
Delphi's stakeholders. As a bankruptcy practitioner and a 
restructuring specialist, I have seen similar circumstances all 
too often. It is, without a doubt, one of the most difficult, 
disheartening aspects of my job, and I have only the deepest 
sympathy for everyone affected.
    Prior to my invitation to testify here today, I received a 
request from the Office of the Special Inspector for Troubled 
Asset Relief Program that I participate in an interview. I 
attempted to determine what further information SIGTARP 
believed it required to complete its audit because my memory 
concerning specific details was considerably better in July 
2009, when I gave a lengthy deposition in connection with the 
Delphi Chapter 11 proceedings that covered many of the topics 
concerning my role on the Auto Team.
    It was my hope that the transcript of that deposition, 
along with the extensive documentary record SIGTARP has 
undoubtedly assembled, would be sufficient to meet SIGTARP's 
needs. After several requests, SIGTARP provided a list of six 
topics on which it desired further information, but it appears 
that SIGTARP contacted the Subcommittee before I had an 
opportunity to respond. In any event, I am here today prepared 
to answer any questions the Subcommittee has concerning my role 
on the Auto Team, which I will do to the best of my ability.
    [Prepared statement of Mr. Feldman follows:]





    Mr. McHenry. Thank you.
    Mr. Wilson.

                   STATEMENT OF HARRY WILSON

    Mr. Wilson. Chairman McHenry, Ranking Member Quigley, and 
members of the Subcommittee, thank you for the opportunity to 
testify before you today.
    I am here to report, at your request, on the Government's 
efforts in 2009 to avoid a catastrophic collapse of the U.S. 
automotive industry and specifically regarding its investments 
in General Motors. My testimony today is in my capacity as a 
former Treasury official, which I left in early August 2009, so 
that is the limit of my direct knowledge.
    First, some brief background on myself. I have spent the 
vast majority of my career in the private sector, working at 
some of the best financial firms in the Country with a focus on 
fixing troubled businesses. As the late 2008 financial crisis 
deepened and the Bush, and then Obama, Administrations began to 
intervene through TARP, I felt it was critical that Treasury 
officials had the restructuring skills that I had in order to 
minimize the cost to taxpayers. So although I am a lifelong 
Republican, due to my desire to serve my Country, I joined the 
Auto Team in early March 2009 and focused primarily on General 
Motors. After General Motors exited bankruptcy, I wrapped up my 
work and left Treasury.
    I have continued my turnaround work both in the private 
sector and the public sector since then. For example, in 2010 I 
was Republican nominee for New York State comptroller. I ran on 
a platform of seeking to fix New York State's broken 
government, and though I lost in a very close race with nearly 
2.1 million votes, I was the top Republican vote-getter in New 
York in 2010.
    Shortly after that I founded my firm, The MAEVA Group, LLC, 
which is focused on fixing problem companies.
    Now let me turn to the auto rescue. In late 2008, early 
2009, GM and Chrysler were on the verge of collapse due to 
years of mismanagement and the financial crisis. Unfortunately, 
the capital markets were in the middle of an unprecedented 
shutdown, obliterating any possibility of private financing. 
This lack of private financing and the substantial 
interdependency of the American automotive industry meant the 
following: one, that absent tens of billions of dollars, GM and 
Chrysler would liquidate; two, their liquidation would have 
meant the failure of many of their suppliers; and, three, the 
widespread failure of suppliers would have threatened Ford, 
which is why Ford never opposed our work.
    It is only because of this unique confluence of events, 
this once in a lifetime storm that threatened to destroy an 
essential American industry that I, a staunch fiscal 
conservative, reluctantly came to accept that the only 
alternative, the least bad option, was emergency financial 
support, the path initiated by the Bush Administration.
    The Obama Administration's decision to pursue this work in 
a commercial manner, as they defined, meant that we would seek 
the best outcome with the minimum potential cost to the 
taxpayer.
    The results of that work speak for themselves. GM had its 
most profitable year ever in 2011, even though auto sales have 
still not fully recovered to pre-crisis levels; it has grown 
market share and now has a fortress balance sheet.
    Tragically, the human cost to these massive restructurings 
were significant, and that is the sad part of any 
restructuring. But absent the Auto Team's work, the human cost 
and the cost to the American taxpayer would have been far, far 
greater.
    While Treasury was closely involved in pressing GM 
management for the major changes needed to make the company 
profitable, we were very careful to never get involved in the 
specific decisions on plant closures, dealer closures, or the 
like. We would agree with GM on the broad strokes, which was to 
create a world-class auto business, and the key components of 
that, and they would make the detailed decisions that needed to 
be made to implement those broad strokes.
    This approach applied to the same sad story of Delphi. When 
Delphi came to the Auto Team's attention, Delphi was bleeding 
approximately $150 million in cash per month. GM was supporting 
Delphi because Delphi was the sole supplier for certain 
critical GM parts, so a Delphi liquidation would have shut down 
all of General Motors. This was an unsustainable proposition 
both for GM and for the American taxpayer.
    To resolve Delphi's loan bankruptcy, GM management agreed 
to various measures, including providing capital and honoring 
the top-up agreements GM had made in 1999. Other commitments, 
including pensions for salaried employees or other unionized 
employees not covered by top-up agreements, were not accorded 
additional consideration.
    Consistent with the rest of our work, Treasury provided 
general input, but not specific decisions to these matters, as 
was recognized in the GAO finding in December 2011.
    So, in closing, the restructuring world is a difficult one, 
filled with painful choices to minimize the human and financial 
costs, while maximizing the probability of a company's long-
term success. The human costs of the GM rescue were deep, 
significant, and tragic, and those who have suffered losses of 
any kind have my deepest sympathies. But as great as those 
costs were, they paled in comparison to the costs of inaction.
    As a fiscal conservative, I wish our work had not been 
necessary. As an American citizen, I wish that more companies 
operated with better management so that these tragic situations 
would not happen as frequently as they do. But amidst the worst 
financial crisis in the past 75 years, the actions of the Bush 
and Obama Administrations avoided devastating liquidations and 
provided the American auto industry a second chance.
    And then one last point on testifying. I would disagree 
with the characterization of my particular willingness to 
testify. Because I believe as SIGTARP now knows, I have 
committed to both the Majority staff last Thursday, the 
Minority staff on Sunday, and through Treasury to SIGTARP 
officials themselves to testify and would be happy to do so.
    With that, I look forward to your questions.
    [Prepared statement of Mr. Wilson follows:]





    
    Mr. McHenry. We certainly appreciate that willingness that 
has been just over a year in the making. But we are grateful 
for it nonetheless, as well as the other two members of the 
Task Force, even if it is at the eleventh hour. And we are 
grateful, as I said, for the Ranking Member and his good work 
and the Minority staff's good work in securing those 
commitments the day before this important hearing. We are 
simply just trying--and thank you for submitting that for the 
record; that is going to be one of my records.
    If we could submit for the record whether or not the three 
members of the Task Force represented today will submit 
themselves for that interview with SIGTARP. The outline that I 
have of extensive requests from SIGTARP to you three gentlemen, 
Mr. Bloom, Mr. Feldman, and Mr. Wilson, is extensive. So pardon 
me for not relieving you of the burden of testifying before 
Congress when we get that commitment at 5:46 the day before a 
10 a.m. hearing. But I think we are going to continue with this 
and expect some questions on that, as I am sure you do.
    Mr. Wilson, Mr. Feldman, thank you for your willingness to 
testify on the particular issue of this hearing. And, Mr. 
Bloom, we will direct some questions to you to see if you will 
be willing to submit some testimony for that.
    With that, Ms. Clowers, from the Government Accountability 
Office, you are recognized for five minutes.

                   STATEMENT OF NIKKI CLOWERS

    Ms. Clowers. Thank you, Chairman McHenry, Ranking Member 
Quigley, and members of the Subcommittee.
    I appreciate your having me here today to speak about the 
termination of Delphi's pension plans. In my comments today I 
will discuss two issues: first, the key events leading to the 
termination of Delphi's pension plans and, two, the role of the 
Department of Treasury in those events. My comments are based 
on our recent reports on these issues.
    First, the termination of Delphi's pension plans and the 
provision of retirement benefit supplements, also called top-
ups, to some Delphi employees, but not others, culminated from 
a complex series of events involving Delphi, GM, various 
unions, Treasury, PBGC that stretched back to 1999. In that 
year, GM spun off Delphi as an independent company. At that 
time, GM agreed to provide top-ups to collectively bargain 
hourly employees, meaning that if something went wrong with 
these pension plans for these employees after Delphi became a 
separate company, GM would ensure these employees received 
their promised benefits.
    No such agreement was negotiated for salaried employees. 
When these agreements were negotiated, Delphi's pension plan 
for the hourly workers was not fully funded. In contrast, the 
plan for the salaried workers was fully funded.
    Delphi filed for bankruptcy in 2005 and, as part of its 
initial reorganizational plan made public in 2007, the company 
planned to maintain its pension plans. But by this time both 
the salaried and union pension plans were underfunded. As part 
of Delphi's exit from bankruptcy, GM agreed to take on some 
liabilities from Delphi's hourly pension plans in two phases. 
However, by the time GM declared bankruptcy in June 2009, it 
had only taken on the first phase of the plan's liabilities.
    GM did agree with the UAW, however, as part of its 
restructuring, that GM would honor the previously negotiated 
top-ups. Salaried Delphi employees and Delphi employees who 
belong to other unions were not included in this agreement.
    Employees of these other unions, along with Delphi salaried 
employees, protested this outcome in bankruptcy court. To 
maintain its supply chain, GM agreed to top-up the pensions of 
two other unions, as their consent was needed to resolve 
Delphi's bankruptcy. However, they did not agree to do so for 
the salaried workers, and this is where the situation stands 
today.
    I would now like to discuss Treasury's role in these 
events. Treasury's role stemmed from its position as the 
primary lender to GM in its bankruptcy. As the primary lender, 
GM played a significant role in helping GM resolve the Delphi 
bankruptcy in terms of GM's interest. However, with regard to 
GM decisions about Delphi pension plans, court filings and 
statements from GM and Treasury officials suggest that Treasury 
deferred to GM's business judgment.
    Nevertheless, according to the records and Treasury 
officials, Treasury agreed with GM's assessment that the 
company could not afford the potential cost of sponsoring the 
Delphi hourly plan itself upon emerging from bankruptcy. 
Treasury also agreed with GM's rationale not to assume the 
Delphi salaried plan since that plan had been fully funded when 
GM transferred it to Delphi in 1999.
    As for the top-ups, Treasury officials said that while 
Treasury did not explicitly approve or disapprove of GM's 
agreement to honor previously negotiated top-up agreements with 
some unions, it agreed with GM's conclusion that it had solid 
commercial reasons to enter into such agreement. In particular, 
Treasury stated that its aim was to ensure that new GM would 
only assume the liabilities of old GM that were commercially 
necessary, and that due to new GM's continued dependency on the 
UAW workforce and the workforce of other unions, Treasury 
officials felt GM had solid commercial reasons to agree to the 
top-ups for these retirees. Also, Treasury stated that GM was 
never obligated to provide top-ups to the salaried or other 
retirees.
    In conclusion, Mr. Chairman, when companies go bankrupt and 
leave their plans with large, unfunded liabilities, some 
participants will not get their full benefits promised to them 
by their employer. This, unfortunately, is not unusual. What 
makes this case more unusual is the series of events that 
unfolded over the last decade that lead us here today and the 
number of players, including Delphi, PBGC, the unions, GM and 
Treasury, and the roles they played.
    Mr. Chairman, Mr. Ranking Member, and members of the 
Subcommittee, this completes my prepared statement. I would be 
happy to answer any questions that you may have at the 
appropriate time. My colleague, Charles Jeszeck, is also 
available to answer any specific questions regarding PBGC.
    [Prepared statement of Ms. Clowers follows:]





    Mr. McHenry. Thank you, and thank you for your testimony.
    Professor Zywicki, you are recognized for five minutes.

                   STATEMENT OF TODD ZYWICKI

    Mr. Zywicki. Thank you, Chairman McHenry, Ranking Member 
Quigley, members of the Subcommittee.
    It is my pleasure to testify today on matters related to 
the Obama Administration's Automotive Task Force and the 
refusal of former Automotive Task Force members to cooperate in 
efforts to understand the Task Force's controversial decision 
to top-up Delphi Corporation's pension plan for Delphi 
employees who were members of the United Auto Workers Labor 
Union.
    General Motors' decision to guarantee the obligations of a 
completely separate company, Delphi, was completely unjustified 
under current established principles of bankruptcy law, and it 
increased the cost to the taxpayer bail out the automotive 
industry by more than $1 billion, with no reciprocal benefit to 
General Motors.
    I commend this Committee for seeking answers to this 
unexplained behavior by the Automotive Task Force, and 
SIGTARP's Christy Romero for insisting on answers to these 
questions.
    Altogether, the Government pumped $80 billion of TARP funds 
into the bailouts of General Motors and Chrysler, and related 
entities, with, as Chairman McHenry suggested, not a shred of 
statutory basis for allocating funds in that manner. According 
to the United States Department of Treasury, it is estimated 
that, at current share prices, the loss to the American 
taxpayers will be about $23 billion from this investment in the 
automotive bailouts.
    Now, it would be one thing to lose billions of dollars if 
it was necessary to facilitate the bankruptcy reorganization of 
these companies. But according to a recent paper by James Sherk 
and me, the entire loss to the taxpayers from the automotive 
bailouts is attributable to the unjustified preferential 
treatment of the UAW in bankruptcy, to the tune of $26.5 
billion.
    To give you a sense of the size of those losses, that is 
larger than NASA's annual budget; that is larger than the 
entire foreign aid budget; and that is larger than the annual 
budget of the State of Missouri. It would be much more accurate 
to refer to this as a UAW bailout, rather than an automotive 
bailout.
    We have heard a lot of talk about shared sacrifice today, 
but I think Steven Rattner, the Obama Administration's former 
car czar, said it best when he said we should have asked the 
UAW to do more. We did not ask any UAW member to take a cut in 
their pay.
    James Sherk and I document three different ways in which 
the UAW was given preferential treatment here that resulted in 
this massive loss to the taxpayers.
    First, the UAW VEBAs were given far better treatment as 
unsecured creditors than any other unsecured creditors in 
either the General Motors or Chrysler bankruptcy cases.
    Second, UAW employees were given preferential treatment as 
employees. Usually, in bankruptcy cases, when confronted with 
above-market, uncompetitive wage scale, bankruptcies use to 
reduce them to competitive levels. What it is going on right 
now as we see in the airline bankruptcies, for instance, in 
which bankruptcy has been used to bring airline bankruptcy wage 
scales to competitive rates.
    In General Motors, the UAW did make wage concessions, but 
on behalf of future hires, not on behalf of any current 
employees, as Steven Rattner admitted. And very few other 
concessions were made. As a result, the wages for General 
Motors, in particular, still remain above that of any foreign 
transplants and in any other States.
    Third brings us to the issue that we are here today, the $1 
billion that was given by General Motors to top-up the pensions 
of certain Delphi employees, the United Auto Workers, the IUE, 
and the USWA union members, but not other hourly employees or 
salaried workers. How can this be?
    Delphi was spun off in 1999, a full 10 years before the 
General Motors bankruptcy. They were a completely separate 
company. There was no continuing legal obligation for General 
Motors to pay for the retirement of the employees of a 
completely separate company. Instead, all we have heard, as far 
as I can tell, is a farfetched rationalization that we needed 
to squander $1 billion for some theoretical fear related to 
this. It is hard to see any explanation other than political 
clout.
    What I would like to know is whether any rational investor 
would spend $1 billion of their own money to pay for the 
retirement of employees of a completely separate company, or 
whether they would be only willing to do it with our money, the 
money of the taxpayers.
    And perhaps it was necessary to have a targeted 
intervention in order to deal with the frozen credit markets at 
the time. That could be. Firms like this reorganize all the 
time, and I take any claims like that with a grain of salt. 
But, by and large, this is a smokescreen for what we are 
talking about today.
    The question is, today, whether or not it was worth 
throwing away $26.5 billion worth of taxpayer dollars purely to 
preserve the benefits and the wages and everything else of the 
UAW. Was it worth it to go through bankruptcy and go through a 
process in which the Indiana Teachers and Police Fighters lost 
some of their secured bonds in order to enrich the UAW?
    I look forward to questions.
    [Prepared statement of Mr. Zywicki follows:]





    Mr. McHenry. Thank you, and thank you for your testimony.
    We have two current federal folks that are in federal 
service on this panel. I want to thank you for your current 
service to our Government and to our people.
    I want to thank the three previous members that were in 
government service for your service to our Government and to 
our people. Public service should be just that.
    Now, there are also consequences for the decisions we make, 
given the public trust, and, in conjunction with that thought, 
that is what this hearing is about.
    I ask unanimous consent that our colleague from Ohio, Mr. 
Johnson, be allowed to participate in today's hearing. Without 
objection, that is ordered.
    I will recognize myself for five minutes.
    For more than a year SIGTARP has been trying to secure 
interviews to complete their work on this subject matter of the 
Delphi pension decisions, and I want to ask Mr. Bloom why were 
you not willing to cooperate.
    Mr. Bloom. I was very involved in personal matters at the 
time. I spent a long time in government service and I didn't 
believe I had anything that I could usefully contribute. But as 
I have said, if it is important to the Committee, I am prepared 
to sit with them now.
    Mr. McHenry. Mr. Feldman, same question. Why were you 
simply not willing to cooperate?
    Mr. Feldman. In 2009, when I was deposed with respect to 
these issues, I had felt at that time that I had answered and 
given all the information that I had available to me. I also, 
frankly, have left public life and have an active and busy 
private life, and my response to SIGTARP was I think you have 
everything I can give you. Having said that, if an interview 
would be helpful, as I have said to the staffers, I am prepared 
to cooperate.
    Mr. McHenry. Well, Mr. Feldman, to that matter, your 
attorney, Mr. Shatter, was contacted. SIGTARP was actually in 
New York and was willing to meet with you in August to 
September of last year, and you wouldn't participate.
    Mr. Wilson, same question. Why were you not willing to 
cooperate?
    Mr. Wilson. Mr. Chairman, I will give you the same answer I 
gave to Treasury at the time they approached me about it, which 
was I gave a lengthy deposition. I think I sat for 10 or 12 
hours of testimony in the summer of 2009 related to the GM 
bankruptcy, testified on anything under the sun, as you can 
imagine, during that long period of time.
    I had the experience of being interviewed for Mr. Rattner's 
book on these activities in early or the summer of 2010 and, 
frankly, I knew then that I could barely recall a lot of the 
facts from a year before and this was a year later, two years 
after the fact, and I said to Treasury I don't remember a lot 
of what we went through; I could refresh my memory, it would 
take me probably a couple days of reading through public 
documents to do that, and I am extremely busy, and I don't know 
how much I can add.
    And that was the exact response I gave to Treasury.
    Mr. McHenry. Gotcha, you're busy. I hear you. Not too busy 
to meet with Mr. Rattner about his book.
    I would be happy to yield to my colleague.
    Mr. Quigley. Thank you.
    Gentlemen, I respect your service, but let me just say 
this. The percentage of the American public that thinks that we 
do the right thing or will do the right thing is in single 
digits. The real cost of the problems that we faced here, and 
in my community, of the public's perception of us and the 
public's perception of corruption is the loss of the ability to 
lead. The President characterized it as a deficit of trust.
    Now, I am not suggesting for a second that you all did 
anything wrong, but you have to appreciate this lost year, for 
whatever the personal reasons, whether you are in public 
service or not, really doesn't matter. It is the perception of 
how things are done. It is the ability to have transparency to 
appreciate how you made the decisions.
    And if your answers, with all due respect, are I don't 
remember, I get that, or you just give the best answers you 
possibly can. But when you do, when you put things off in this 
manner, you don't help us and you don't help the decisions you 
made. Frankly, I think we made the right decision, and we are 
going to discuss that later, about the bailout, because I 
thought the industry mattered.
    But I think the Chairman is correct. This was a mistake. 
And I appreciate your willingness to testify here and to 
cooperate and to be interviewed by SIGTARP, but it is hard to 
add anything to what Ms. Romero said, except for the fact that 
it isn't that you have done anything wrong, it is that the 
American public has a right to know how those decisions were 
made when so much money was being spent, even if they agree 
with the decisions. So I mean no disrespect. I just wanted to 
add, to an extent complement what the Chairman was trying to 
say.
    Mr. McHenry. I thank the Ranking Member.
    So the question I have, Mr. Bloom, is are you willing to 
submit yourself to an interview with SIGTARP within the next, 
let's say, two months?
    Mr. Bloom. Yes.
    Mr. McHenry. Mr. Feldman?
    Mr. Feldman. Yes.
    Mr. McHenry. Mr. Wilson?
    Mr. Wilson. Yes. I offered up for this afternoon. I haven't 
gotten a response yet, but I would be happy to do that.
    Mr. McHenry. Excellent.
    Well, Ms. Romero, next time you don't have people willing 
to sit down with you for an interview, let me know; we will be 
happy to have a hearing.
    Ms. Romero. I can't say how grateful I am to the Committee, 
to the Chairman, to the Ranking Member of the full Committee, 
Cummings, to Ranking Member Quigley. This is all we wanted.
    We also have not reached any conclusion in our audit. How 
can we reach a conclusion? I can't characterize the role these 
gentlemen played without giving them an opportunity to speak to 
that role. This is all we have wanted and I am grateful, very 
grateful for that.
    It also goes beyond just these three witnesses and this 
audit, as I talked about in my opening statement. It will be a 
very, very dangerous precedent if former Treasury officials or 
other government officials who worked on TARP matters and then 
leave refuse to be interviewed by SIGTARP, that that goes on 
and it is allowed. So thank you very much.
    Mr. McHenry. Thank you.
    I thank you for your willingness to submit yourself to 
this. Mr. Rattner, who testified about this matter, the 
interview took approximately two hours with SIGTARP. I know you 
have busy lives. I also know this was a very important matter 
in your life, in both your public service and now in your 
private sector experience. This is something major for our 
Nation and I think we need to have an accurate portrayal of 
what actually happened and why you made the decisions that you 
made. Books have been written about this. There are going to be 
generations that talk about this excessive amount of government 
intervention, whether justified or unjustified, and the results 
of those bailouts.
    I also will submit for the record that currently the GM 
stock price today is under $21. At the IPO it was $33. For the 
Government to break even, for the taxpayer to break even, that 
number had to be $53. With that, we have had $16 billion in 
direct losses to the taxpayer based on the bailout of just GM.
    I just want to submit that for the record.
    I do have other questions, but in the interest of other 
members' time, we will now recognize Mr. Quigley for five 
minutes, after which we will recognize Mr. Ross for five 
minutes. Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman. I yield to the 
Ranking Member of the full Committee, Mr. Cummings.
    Mr. Cummings. Thank you very much.
    Mr. Chairman, I want to associate myself with your words 
and those of Mr. Quigley and Ms. Romero with regard to the 
necessity and the importance of witnesses cooperating in these 
investigations. And I want to thank the witnesses for being 
here and for their service to the Country.
    The former members of the Auto Task Force were part of the 
Obama Administration's successful rescue of the American 
automotive industry. In December 2008, an analysis by the 
Economic Policy Institute projected that ``the bankruptcy of 
U.S. automakers and the collapse of the domestic auto assembly 
industry could eliminate up to 3.3 million U.S. jobs within the 
next year.'' The collapse of General Motors alone would lead to 
an estimated loss of 900,000 jobs. That calamity was averted by 
the actions of you, our former members of the Government and 
the Obama Administration's Auto Task Force, and you deserve our 
thanks and we do appreciate what you have done.
    Today's hearing is not focused on these successes, but on 
why these three individuals have not yet been interviewed by 
the Special Inspector General for the Troubled Asset Relief 
Program, which is conducting a review of the Auto Task Force's 
work, and I am very pleased to know that you all are willing to 
submit yourself to being interviewed.
    I recognize that you all are private citizens now and are 
under no obligation to speak with the Inspector General, but we 
support the Inspector General's Office and want them to 
complete their work. As I understood it, this was the principal 
reason we were holding today's hearing.
    However, in preparing for the hearing, my staff contacted 
each of these three former officials and all three of them said 
what they said today, that they are now willing to be 
interviewed.
    The Chairman has apparently decided to go forward with 
today's hearing, and that is his right. But, as a result, we do 
not have the benefit of the Inspector General's final report, 
which I anxiously look forward to. I think this could have been 
handled with a few phone calls rather than a hearing, but that 
is not my call to make.
    Mr. Chairman, if you are going to proceed, and I know you 
are, I ask that you do so on an evenhanded basis. There is 
another issue almost exactly like this one, in which an 
inspector general has conducted a review, has sought to 
interview a former official, and has been refused. Unlike the 
present case, however, there is substantial evidence of serious 
abuses, as well as unethical and potentially illegal conduct in 
that case.
    On two occasions I have written to Chairman Issa about 
findings by the Inspector General of the National Labor 
Relations Board that a former Board member, Mr. Peter 
Schaumber, was regularly receiving deliberative, pre-
decisional, and inside information from another Board member, 
Mr. Peter Flynn. The Inspector General warned that Mr. 
Schaumber had received copies of draft Board decisions and 
other deliberative information on pending Board actions. Yet, 
the Inspector General was never able to conduct an interview of 
Mr. Schaumber, who was a former employee.
    It seems to me that the only difference with that case is 
that it involved a Republican. Mr. Schaumber served as a senior 
advisor and co-chair of the Labor Policy Advisory Group to 
presidential candidate Mitt Romney when he was engaged in these 
activities.
    As I stated from the outset, I strongly support our 
inspectors general and I believe our Committee should help them 
when they cannot obtain access to information. So, Mr. 
Chairman, I know how diligent you are, and I would like to ask 
you now will you support my request for a hearing with Mr. 
Schaumber to obtain his testimony? Will you join me in 
requesting that the Committee call him before us, like you 
called these three gentlemen before us today? And will you 
commit to conducting the operations of this Committee on an 
evenhanded basis?
    Mr. McHenry. Well, Mr. Cummings, I want to thank the 
Ranking Member. At the beginning of this hearing I went through 
a significant amount of this time line. I will be happy to look 
at the letter that you have presented this morning. I recognize 
that I was not on that exchange. I am not familiar with the 
subject matter you are bringing up, but I trust the gentleman 
has a deep and abiding interest in government transparency; he 
has been diligent in a tough, but fair Ranking Member in my 
dealings with the gentleman, having served on his subcommittee 
in my first term in Congress. I thank you for bringing this 
subject matter up and I will be happy to look at this issue.
    Mr. Cummings. May I have another 20 seconds, please?
    Mr. McHenry. Absolutely.
    Mr. Cummings. I just ask unanimous consent that my two 
previous letters on this topic be entered into the record. We 
have been asking for this since March, Mr. Chairman, and I see 
no difference between these cases other than that the gentlemen 
here today have all agreed to be interviewed by the Inspector 
General, and Mr. Schaumber has not.
    Mr. McHenry. Without objection.
    Mr. Cummings. I want to thank you for your patience. Thank 
you.
    Mr. McHenry. I thank the Ranking Member for bringing that 
subject matter up.
    Ms. Romero, to that end, have you contacted the Committee 
about this subject matter and this witness?
    Ms. Romero. As regards to these three witnesses----
    Mr. McHenry. Oh, it is a different IG. I am sorry.
    Ms. Romero. Oh.
    Mr. McHenry. I am sorry, I was just informed of that.
    Well, thank you, Mr. Cummings, and we certainly will follow 
up with you on that. You have my commitment on that.
    With that, we will now proceed to Mr. Ross of Florida for 
five minutes.
    Mr. Ross. Thank you, Mr. Chairman. You are to be commended 
for holding this hearing.
    As a practicing lawyer, I find that justice doesn't always 
move at the rate we would like it to move, and the collection 
of facts is absolutely necessary for the rule of law to be 
applied and justice to prevail.
    While we are here on the eleventh hour and now getting 
cooperation from the witnesses, I am grateful for their 
cooperation. But, Mr. Feldman, when you say that it should have 
been done back in July of 2009, when your deposition was taken 
and you had a better recollection of the events, I also think 
back to the witnesses that I would have in my cases and am 
grateful for discovery depositions because it allows for a 
person, allows for a witness to recollect their thoughts and 
remember their testimony.
    So again I am grateful for you all to agree now, but let me 
go into some questions.
    Mr. Bloom, you indicated in your opening that the 
bankruptcy proceeding was fair and open. My question to you is 
was it any different than any other normal bankruptcy 
proceeding? I mean, was this not one of the most expedited 
bankruptcy proceedings in the history of the U.S.?
    Mr. Bloom. In my experience, it was faster than average, 
but there are other 363 sales----
    Mr. Ross. Are you familiar with any other bankruptcies that 
were expedited in such a summary fashion?
    Mr. Bloom. Well, the sale of the parts of Lehman Brothers 
to Barclays in the Lehman bankruptcy, that portion of it, which 
was a 363 sale, which is what this was, was actually done more 
quickly.
    Mr. Ross. And, Mr. Feldman, are you familiar with, in your 
experience, any company independent through a bankruptcy 
proceeding giving $1 billion to another company, as was done in 
this particular situation?
    Mr. Feldman. Certainly, they honored a contract and they 
made the decision to honor the contract based on their business 
judgment, and I frankly think you see that all the time in 
many, many bankruptcies.
    Mr. Ross. Mr. Zywicki, how do you respond to that?
    Mr. Zywicki. Well, first, I would say I have never seen a 
bankruptcy like this at all. I have taught bankruptcy for 15 
years; I practiced bankruptcy. I have never seen a bankruptcy 
case in which secured creditors received $0.29 on the dollar 
and unsecured creditors received $0.44 on the dollar, which is 
what happened here; and, again, some of those secured creditors 
were other retirees, the Indiana policemen and teachers 
retirement unions.
    I have never seen, under the guise of a 363 sale, what 
really amounted to or what is effectively a sub rosa plan, 
which is not just selling the company, but dictating how the 
assets are going to be distributed. What we also saw in this 
case was an auction that was anything but a fair auction of the 
assets; there were strings attached to it that basically 
required that anybody----
    Mr. Ross. And why was that? Was the UAW that effective?
    Mr. Zywicki. Well, anybody else who wanted to bid on the 
company was required to give preferential treatment to the UAW 
in the same sort of way that the Government did with respect to 
honoring the VEBAs. Once the company went into bankruptcy, of 
course, we saw a lot of other shenanigans. But I have never 
seen any bankruptcy case that resembled this in terms of the 
impact on the rule of law, the way in which it scrambled around 
priorities, and the speed at which they essentially sold the 
company and distributed the assets.
    Mr. Ross. Thank you.
    Mr. Bloom, what role did the Auto Task Force or other 
administration officials play in the negotiations between GM 
and the UAW in this bankruptcy?
    Mr. Bloom. I think the role we played in that generally was 
the same role we played with most of the issues, which is to 
say that we deferred to General Motors in terms of their 
business judgment about how to handle a particular matter, and 
I think the UAW negotiation would fall into that category. But 
we reviewed that decision to see if we agreed that it was 
commercially reasonable.
    Mr. Ross. And did the UAW have a great deal of leverage in 
these negotiations?
    Mr. Bloom. I think it would be fair to say they had a 
degree of leverage. I wouldn't describe----
    Mr. Ross. Do think they would have derailed the entire deal 
over the salaries of a few?
    Mr. Bloom. I can't speculate as to what they might have 
done.
    Mr. Ross. Mr. Feldman, what do you think?
    Mr. Bloom. I think our judgment at the time was that the 
judgments that GM made were reasonable.
    Mr. Ross. Mr. Feldman, your opinion? The UAW exerted a 
great deal of leverage in this negotiation?
    Mr. Feldman. I think everybody in the case who had leverage 
exerted that leverage. The UAW was really no different than any 
other participant.
    Mr. Ross. Do you think they would have derailed the 
negotiations over----
    Mr. Feldman. I truly don't know. General Motors----
    Mr. Ross. But you would have to speculate. I mean, this is 
your forte.
    Mr. Feldman. I don't think speculating is my forte. My 
forte is how to move companies through Chapter 11, include 
these two companies, Chrysler and General Motors.
    Mr. Ross. And never on speculation?
    Mr. Feldman. I try not to.
    Mr. Ross. Thank you.
    With regard to the payback, let's say that under the Bush 
Administration we give GM $10, under the Obama Administration 
we give $20 to GM; GM pays back $20. In this particular 
example, it hasn't all been paid back. Was that something that 
was never intended to come to fruition or was it just that we 
wanted to make sure that we paid back what was given under the 
Obama Administration? Mr. Feldman, I will go to you for that.
    Mr. Feldman. I don't think that was the intention. The 
intention was to get paid back. Unfortunately, in the case of 
General Motors, the stock price has not performed as I think 
people hoped it would. But one of the reasons that General 
Motors was de-levered to the extent it was de-levered was to 
hopefully help the stock price.
    Mr. Ross. I see my time has expired, so I will yield back. 
Thank you.
    Mr. McHenry. I thank my colleague.
    We will now recognize Ms. Speier from California for five 
minutes.
    Ms. Speier. Mr. Chairman, thank you.
    I want to thank Mr. Feldman, Mr. Wilson, and Mr. Bloom for 
being here as private citizens today and for recognizing that 
there is a responsibility as private citizens to support one's 
Country.
    Professor, you referenced shenanigans, which I thought was 
an interesting term, because I could think of a lot of 
shenanigans that went on with Wall Street, and particularly 
Goldman Sachs, among many other. Would you call those 
shenanigans?
    Mr. Zywicki. I don't know those in detail. If I looked at 
it, I would be willing to call them shenanigans, a lot of them. 
It would be possible. I have not looked at those in as much 
detail as I have with respect to these auto bankruptcies.
    Ms. Speier. Well, with Goldman Sachs, they actually created 
a product for a specific individual who wanted to short them, 
and then sold those products as if they were good, outstanding 
products. Those, to me, are--that kind of conduct is 
shenanigans. I think a company going bankrupt is not 
necessarily shenanigans, or trying to keep it alive is not 
necessarily shenanigans.
    Let me ask you, Mr. Wilson, as you noted in your testimony, 
you are a lifelong Republican, and proud of it, I have no 
doubt, and you were the Republican conservative and Independent 
party nominee for New York State's comptroller, is that true?
    Mr. Wilson. Yes.
    Ms. Speier. The work you did to rescue the U.S. auto 
industry was about doing what was best for the Country, was it 
not?
    Mr. Wilson. Yes.
    Ms. Speier. At any time did you detect that persons on your 
team were pursuing a political agenda?
    Mr. Wilson. No.
    Ms. Speier. Were you attempting to push a particular 
political agenda?
    Mr. Wilson. Only to save as much taxpayer money as 
possible.
    Ms. Speier. Oh, what a novel idea, to save taxpayer money. 
Is that what you were engaged in doing?
    Mr. Wilson. Yes.
    Ms. Speier. Okay. Is it true that you were working to stave 
off a potential collapse of a very large and interdependent 
U.S. automotive industry, and you were deferring to the 
company's business judgment regarding many of these detailed 
decisions?
    Mr. Wilson. Yes.
    Ms. Speier. So, as you look back at your time, would you 
say that you regret having done anything as a member of that 
Task Force?
    Mr. Wilson. I wouldn't say that. I mean, we could always do 
a better job. You always have second thoughts and wish you did 
better than anything you do in life, but I certainly feel that 
we did the best we could given the circumstances and the 
timing, and I think it was the right thing for the Country.
    Ms. Speier. So are you proud with what happened?
    Mr. Wilson. Yes.
    Ms. Speier. How about you, Mr. Feldman?
    Mr. Feldman. I think I said in my opening remarks that I 
remain fiercely proud. I think what we did was, with a lot of 
help from a lot of other people in the Government and at the 
companies, pretty spectacular for these companies, frankly.
    Ms. Speier. Mr. Bloom?
    Mr. Bloom. I would just echo my former colleagues' 
comments, and I would emphasize Mr. Feldman's point; there were 
a lot of people who worked extremely hard on this matter, but I 
think collectively a very good result was achieved compared to 
the alternative.
    Ms. Speier. Now, each of you is going to now provide a 
deposition to SIGTARP on your activities, and we also have a 
GAO report that has been completed that suggests that there was 
nothing underhanded. Have you read the GAO reports? Do you have 
any comments on that GAO report? Any of you.
    Mr. Feldman. I have read the GAO report. I suspect my 
colleagues have as well. I didn't take issue with anything in 
the GAO report; I thought it was, overall, a very good job.
    Ms. Speier. Anyone else have any comments? Mr. Bloom?
    Mr. Bloom. I wouldn't disagree.
    Ms. Speier. All right, I yield back, Mr. Chairman.
    Mr. Turner. [Presiding.] Thank you. I want to thank the 
Chairman for yielding the gavel to me during this period of 
asking questions, and I want to thank the Ranking Member, Mr. 
Quigley.
    This is a bipartisan issue. If you noticed, the topic of 
this hearing is not the auto bailout, the questions of whether 
or not it should have been doing or shouldn't have been done. 
The topic is the Delphi pensions, those who did not receive the 
top-up or their pensions being whole, in fact, had their 
pensions reduced, and the involvement of the Auto Task Force 
and these three gentlemen and their refusal to participate in 
that. The GAO report did not have information for determining 
their role or their responsibilities.
    Mr. Bloom, you have said that you have testified a number 
of times, but, as you acknowledge in your own testimony, you 
did not testify concerning this topic because you claim that 
there was ongoing litigation that would prevent you to stand in 
front of Congress and tell the truth.
    Mr. Feldman, do you have a medical condition that affects 
your memory?
    Mr. Feldman. I do not.
    Mr. Turner. Great. Thank you. Because in your testimony you 
have, like, foreshadowed that you might claim that you don't 
remember this stuff when you go before SIGTARP or when the 
other questions are asked of you in this Committee, and I would 
want to invite you to have a refreshed memory because of two 
things. One, when we pull up your law firm's advertisement of 
what you do, not only do they recognize that you have a 
practice that is complex litigation, clearly, you recall it. 
But the very first thing it tells is that in March 2009 you 
were recruited to serve as the chief legal advisor for the 
strategy to restructure and recapitalize General Motors 
Corporation. It is the first item. So if your clients can avail 
themselves of the knowledge you had, we want to also.
    Mr. Bloom, you testified before this Committee, on the 
Regulatory Affairs Subcommittee on June 22nd, 2011. At that 
hearing I handed you three pages of questions. My staffer, 
Andy, who is going to hand them to you again, handed them to 
you at that hearing. Do you recall receiving these questions?
    Mr. Bloom. Yes.
    Mr. Turner. Okay. I asked you if you would answer those 
questions, and let me refresh your memory as to what you said. 
Here is the video of you at that hearing.
    [Video played.]
    Mr. Turner. Mr. Bloom, your answer to me on June 22nd, 
2011, was absolutely. I have not received one answer from you. 
Why haven't you answered me?
    Mr. Bloom. Subsequent to the time before I had a chance to 
answer, I left government service.
    Mr. Turner. So your answer changed because you left 
government service?
    Mr. Bloom. I did not feel it was appropriate that I 
continue to involve myself in this matter after I left 
government service.
    Mr. Turner. Well, clearly, this Committee views that 
otherwise, as do the taxpayers. You had great responsibility, 
as also your current firm indicates and advertises you as the 
senior advisor at the U.S. Department of Treasury where he 
helped lead the restructuring of General Motors. Is your 
accountability to the taxpayers. Will you commit, as you did in 
that hearing, to answer these questions now?
    Mr. Bloom. I am here today, and if there are questions I 
can answer, I will do it.
    Mr. Turner. Will you commit in writing to answer these 
questions, as you did under oath in that hearing on June 22nd?
    Mr. Bloom. I will answer the questions I can answer today.
    Mr. Turner. So we will just keep you here and I will just 
orally ask you the questions, with the Chairman's approval, 
then.
    Mr. Feldman, we have a number of your coworkers' emails 
that also can help you refresh your recollection. When we get 
to the SIGTARP's reason for wanting to speak to you, Ms. Romero 
states, SIGTARP believes that the Auto Task Force played a role 
in the pension decision, and these individuals' failure to 
speak on this issue poses a significant obstacle.
    Mr. Feldman, do you agree that you played a role in the 
pension decisions?
    Mr. Feldman. I don't think I agree that I played a role in 
the pension decisions. I certainly spoke regularly to the PBGC 
and to General Motors regarding the Delphi pension issues.
    Mr. Turner. Did you ever speak to people at the White House 
concerning this issue?
    Mr. Feldman. Brian Deese, who was, at that time, at the 
White House, was a regular member of our team and the team 
reported to Larry Summers and Tim Geithner, and obviously Mr. 
Summers or Dr. Summers was at the White House at that time.
    Mr. Turner. Can you please put up slide 6?
    [Slide.]
    Mr. Turner. This is Joseph House of PBGC, his email 
following his conversation with you, where he says that you 
reported that you made progress discussing our proposal with a 
number of key folks at Treasury and at the White House, but he 
has not yet wrapped up his coordination. This would be the 
issue of the pensions. PBGC's emails indicating that we have 
several, including this one, that indicate your role on the 
Auto Task Force of coordinating the issue of the pensions. Do 
you disagree with this email?
    Mr. Feldman. I don't disagree that I was the coordinator or 
facilitator of those issues. I think that is accurate to say.
    Mr. Turner. What was your role? You just said a minute ago 
you didn't have one.
    Mr. Feldman. I think you asked whether I was a decision 
maker, and I was not a decision maker.
    Mr. Turner. I asked you to describe what your role was. 
Would you describe that role for us, please?
    Mr. Feldman. Sure. I was the facilitator, coordinator of 
issues between General Motors and the PBGC, among other roles, 
regarding the Delphi pension issues.
    Mr. Turner. And how does that role assist or affect PBGC 
and its participation in the bankruptcy process and in the 
decision affecting the pensions?
    Mr. Feldman. Well, the decision that the PBGC made with 
respect to the pensions was independent of anything that 
Treasury or I had to say to the PBGC. The issue vis-a-vis the 
PBGC and Delphi was what claims the PBGC would have in the 
Delphi case; what liens they would purport to have over assets 
of Delphi, particularly the foreign assets of Delphi, and that 
had a large impact on Delphi's future and obviously on GM's 
future.
    Mr. Turner. So, Mr. Feldman, you played a role in 
determining the either claiming or releasing of PBGC liens on 
General Motors-Delphi assets in the bankruptcy process with 
respect to these pensions.
    Mr. Feldman. That is not correct.
    Mr. Turner. That is what I heard you say. Please clarify.
    Mr. Feldman. Let me be very clear. I urged the PBGC to come 
to decisions in a rapid manner because it had the potential to 
hold up General Motors' emergence. But I did not advocate for 
positions vis-a-vis the PBGC; I played the role of a 
facilitator or mediator, if you will, between the PBGC and 
General Motors.
    Mr. Turner. My time has expired.
    Mr. Quigley?
    Mr. Quigley. Thank you, Mr. Chairman.
    Good morning, Ms. Clowers.
    Ms. Clowers. Good morning.
    Mr. Quigley. Your audit tried to identify some of the 
factors that went into GM's decisions to top-up some pensions 
and not others. That is correct, right?
    Ms. Clowers. It did.
    Mr. Quigley. Your December 2011 report states, ``Treasury 
deferred to GM's business judgment and Treasury did not 
explicitly approve or disapprove of GM providing top-ups.'' So 
it would appear from your report that the Delphi pension matter 
was decided by GM without Treasury influence?
    Ms. Clowers. Yes. We reported that while Treasury played a 
significant role in resolving the Delphi bankruptcy, as they 
wanted that resolved as quickly as possible, as new GM emerged 
from bankruptcy, they played an advisory role with regard to 
the pension plan issues as laid out in court filings and 
interviews with GM, PBGC officials, and Treasury officials. I 
think an example of that is in a court filing that shows that 
Treasury assumed GM would be honoring the hourly plans, up 
until it was informed by GM in June that it could no longer do 
so because of the financial burden.
    Mr. Quigley. Okay. And in your mind and in what you wrote, 
what were the factors driving GM's decisions?
    Ms. Clowers. According to GM officials that we spoke to and 
the public records that we reviewed, GM considered the 
dependency on the UAW for the workforce; they were heavily 
reliant on the workforce, so, emerging from bankruptcy, they 
wanted to make sure they had a motivated and intact workforce. 
They also considered other costs and risk factors, and weighed 
that against emerging from bankruptcy in terms of what type of 
costs and risks they wanted to take on.
    Mr. Quigley. And did you find any evidence that Delphi's 
pension decisions were anything other than GM's private 
business decisions?
    Ms. Clowers. Again, the court filings, Treasury officials, 
PBGC officials, GM officials stated that Treasury only played 
an advisory role. I would note, however, in conducting our 
work, we coordinated with SIGTARP, and our report focused on a 
broad range of things, including PBGC issues, the events 
leading to the termination in Treasury's role. But we did not 
conduct an investigation, as SIGTARP is doing, and we did not 
interview the former officials here today.
    Mr. Quigley. Is there anything else you want to add related 
to the GM decision-making process and the questions I have 
asked?
    Ms. Clowers. No, sir.
    Mr. Quigley. All right. Thank you.
    I yield back.
    Mr. McHenry. [Presiding.] I thank the Ranking Member and 
certainly appreciate his line of questioning as well.
    We will now recognize Mr. Kelly of Pennsylvania for five 
minutes.
    Mr. Kelly. Thank you, Mr. Chairman. Thank you for holding 
the hearing and allowing me to participate.
    I do have a question. Mr. Bloom, I have been with you 
before at other hearings. When we talk about the boards and we 
talk about GM making decisions, is the consensus is these are 
GM board decisions that were made involving the UAW?
    Mr. Bloom. I think it would depend on the decision.
    Mr. Kelly. But specifically with this one, when it comes to 
pensions and picking and choosing who would get bailed out and 
who would not get bailed out.
    Mr. Bloom. I couldn't say whether General Motors management 
specifically brought this issue to their board of directors or 
not; I wouldn't know.
    Mr. Kelly. Did you sit on the board of directors of General 
Motors?
    Mr. Bloom. No.
    Mr. Kelly. No. You were part of the Auto Task Force?
    Mr. Bloom. Yes.
    Mr. Kelly. Okay. And the board of directors, again, the old 
GM versus the new GM, because there are two completely 
different entities there, as we know. A lot of the new General 
Motors were appointees by the Administration.
    So as we move on, let me ask you this, Mr. Wilson, in your 
testimony, I think this really makes a lot of sense, you talked 
about what happened with this and you say, on page 2, the 
results of the work speak for themselves. General Motors had 
its most profitable year ever in 2011, even though auto sales 
have still not fully recovered.
    I know we talk about the auto industry coming roaring back. 
Do you know what GM made in 2011?
    Mr. Wilson. I think it was just under $8 billion net 
income.
    Mr. Kelly. How much taxes did they pay?
    Mr. Wilson. Well, they had some NOLs from the transaction.
    Mr. Kelly. Well, how much did they pay in taxes?
    Mr. Wilson. I don't know.
    Mr. Kelly. I will tell you what it is. It is zero. Zero.
    And maybe, professor, you can tell us why they paid zero 
taxes on almost $8 billion in profits.
    Mr. Zywicki. Sure, yes. This is another anomaly about these 
cases that are very irregular, which is that the Treasury 
Department issued essentially a special ruling for TARP 
recipients that allowed them preferential treatment under the 
tax code in order to carry forward net operating----
    Mr. Kelly. Wait, wait. Can I just say, so preferential 
treatment? Can we just say on the street we call that picking 
winners and losers, and who gets to take advantage of things 
that weren't available to others in bankruptcy?
    Mr. Zywicki. I think that would be a very accurate 
description, yes.
    Mr. Kelly. So $7.1 billion. I am a General Motors dealer, 
by the way, so I am really happy when they make money. But I 
always like the fact, and the President always talks about the 
99 percent and the 1 percent, and how the 1 percent is not 
paying their fair share. An almost $8 billion profit and they 
didn't try to put anything back in? That is offensive to me as 
a taxpayer.
    I know that during the bailout, as a dealer, I didn't get 
one cent. In fact, I was at risk of losing my dealership, and 
the answer was, you know what, good luck; you guys can probably 
make it if you really work hard, we made it. I understand that.
    But when we talk about this auto industry roaring back, we 
are talking about an industry that had 16.5 million sales every 
year. It fell to 9.5 million sales. So the roaring back comes 
as a result of the fact that cars, like people, age; cars, like 
people, can't perform at the same level they had when they were 
newer. There is a thing called the scrapping rate that is 
taking place.
    So the roaring back really is a result of a diminished 
market the last three or four years. So, yes, it is going to 
come roaring back. It is going to come roaring back, but I 
think right now they are projecting somewhere some people say 
13.5 million units a year, some 14.5 million units a year. But 
I am telling you, from a guy who is actually on the lot, 
talking to people, what is keeping it from really roaring back 
is people just aren't sure what the future holds. They are not 
willing to go into a 48-month or 60-month commitment, not 
knowing if they are going to have a job in that time period.
    So I think it is important that we really take a look at 
what did happen in the auto industry, and I have to tell you, 
Mr. Wilson, I know you are a good Republican and I know that 
you are very heralded for what you do.
    Without objection, I would like to enter the testimony from 
City and State, an article that talked about Harry Wilson 
tapped by the Teamsters to rescue an ailing trucking company 
and union jobs.
    Mr. Kelly. You do a good job at what you do. I don't think 
there is any question about that, and I think people in the 
private sector, it doesn't really matter what political 
affiliation you have. I mean, I sell cars. The prerequisite is 
they have to be a Republican to buy a car from me. I just want 
everybody to come in and avail themselves of the fine products 
that General Motors builds.
    Mr. Wilson. But you are in Florida, not New York.
    Mr. Kelly. So you do have close ties and you are going to 
try and help the trucking association too, because they are 
also in a very bad shape right now, are they not?
    Mr. Wilson. Yes. In that particular deal, sir, we completed 
that restructuring in July of 2011.
    Mr. Kelly. Okay. So they are back on their feet and 
recovering.
    Mr. Wilson. Yes.
    Mr. Kelly. But my real question, I guess it comes down to 
how do we pick those we bail out and those we don't?
    Mr. Wilson. As a government or as a private sector?
    Mr. Kelly. As a government, knowing that the private sector 
funds all these decisions that we make.
    Mr. Wilson. Sure. Well, philosophically, the way I look at 
it is it is almost never acceptable for the Government to 
intervene in the private sector, and I have gotten ribbing from 
friends of mine with philosophical similarities about why was 
it okay in 2009. And the only reason I personally concluded it 
was okay was because we were on the edge of the abyss. No one 
knew where the bottom was, sir, as you remember. The S&P was at 
66.
    Mr. Kelly. Let me ask you one thing. So the bailout was to 
keep General Motors from going bankrupt, right?
    Mr. Wilson. No, I think the rescue was done to save the 
entire American auto industry from going out of business.
    Mr. Kelly. All right, all right. So the market would be the 
market; the industry fairs on its own.
    Professor, the length of the GM bankruptcy, how many days?
    Mr. Zywicki. I don't remember exactly, but it was like 30 
to 60 days from beginning to end.
    Mr. Kelly. So one of the biggest bankruptcy cases ever is 
solved in 30 to 60 days?
    Mr. Zywicki. That is what we are led to believe, yes.
    Mr. Kelly. So if we don't use what was ultimately used and 
we let the--I am sorry, my time is up. I just wanted to see if 
it had gone through a normal bankruptcy, what would the 
recovery time have been also. I apologize.
    Mr. McHenry. The gentleman can answer the question. Then we 
will move forward.
    Mr. Zywicki. If it had gone through normal bankruptcy, it 
would have taken somewhat longer, but it would have been a lot 
more transparent. We could have a real 363 sale; we could have 
not shredded the rule of law in terms of priorities and those 
sorts of things. So it may have taken a little bit longer, but 
there is no reason why we had to do all the things that we did, 
all this other stuff in order to fix the auto companies.
    Mr. McHenry. I thank the gentleman for his testimony.
    We will now recognize Mrs. Maloney of New York for five 
minutes.
    Mrs. Maloney. I want to thank the gentleman and I want to 
thank all of the panelists for being here.
    Actually, I want to thank President Obama for saving the 
auto industry in America. I, for one, can't imagine an America 
that doesn't build our own cars. Granted, it is not where it 
was, but we saved at least a million jobs, and we are now 
exporting cars and we seem to be doing a good job. We have to 
remember, when President Obama took office, the industry was 
shedding jobs by hundreds of thousands, and GM and Chrysler 
faced the possibility of being totally liquidated, which would 
then have huge ramifications.
    Even in New York we had suppliers in New York that were 
supplying the auto industry, and they went out of business and 
many New Yorkers lost their jobs. We weren't building the cars, 
but we weren't building some of the parts. So it had 
ramifications across our great Nation.
    Yet, when the American auto industry was on the brink of 
collapse and we were going to lose, by all estimates, from all 
economists, at least a million jobs on the line, that would 
have been at least one in eight jobs in Ohio and in jobs across 
our Country. And it wasn't just the people in the auto plants. 
We have to remember this. This industry affected everyone. It 
affected the suppliers hundreds of thousands of miles away and 
up and down the chain. It affected the restaurants near the 
plant; every store, every school, everyone in the community, 
the families that depended on the worker that was at that 
plant.
    I remember some people said let Detroit go bankrupt, let it 
go down the drain. Even a guy running for president said that. 
But our President said, no, we are going to save the auto 
industry and, quite frankly, I am proud of the auto industry. I 
am proud of their comeback and I think it is an American 
success story that America bet on the American worker and bet 
on American industry. And GM is back. Now it is the number one 
company in the world. Ford is on the move, was handled 
extremely well during that whole crisis. They did extremely 
well. Chrysler is back.
    I think supporting with policies the American worker and 
American business, I think it is a success story. So I want to 
applaud everyone on the panel or everyone who played any role 
whatsoever in saving an American industry which is now 
exporting cars.
    Now, I would like to point out and put in the record the 
GAO highlights first page, and I want to quote from it because 
there is some confusion about Treasury's role, and I am going 
to quote exactly from their report. ``Although acknowledging 
the significant role Treasury played in GM's restructuring, GM 
and Treasury officials stated that Treasury's role was advisory 
concerning GM's decisions not to take on additional Delphi 
pension liabilities, but to honor the top-up agreements with 
some unions.'' Also, PBGC officials stated that PBGC 
independently made the decision to terminate the plans.
    So I would like to put that in the record because it 
clarifies the independent voice of GAO.
    Mr. McHenry. Without objection.
    Mrs. Maloney. I know that we have a representative here and 
we have some questions for Ms. Clowers, but I first want to ask 
Mr. Bloom, Mr. Feldman, and Mr. Wilson, and I want to thank 
them, first, for testifying. They are out there, aren't they? I 
don't have my glasses, so I can't see. I regret I was at a 
hearing in Financial Services that I had to attend and I didn't 
hear all of it, but I read your testimony.
    I want to know what was your overall mission as members of 
the Auto Task Force? Delphi was just one piece of the situation 
that you were facing and Delphi was a major parts suppliers to 
GM that had been experiencing its own financial troubles for 
some time. If you saved GM, but Delphi failed, all of your 
efforts would have been for nothing, is that correct? Your 
answer?
    Mr. Bloom. I think I would echo what Mr. Wilson had said 
earlier. Our mission was not to save General Motors; our 
mission was to see if there were a way to facilitate the 
restructuring of these companies so that the American 
automobile industry in its entirety could continue to function 
at the least possible cost to the taxpayer. It was General 
Motors' judgment, which we did not disagree with, that if 
Delphi had liquidated, General Motors' ability to reorganize 
would have been put seriously at risk.
    Mrs. Maloney. Well, my time is up and I think that says it 
all, so I think your judgment was right. We are employing, it 
saved over a million jobs, we are exporting. I would call that 
an American success story. Congratulations for any role you did 
to support it.
    Mr. McHenry. The gentlelady's time has expired.
    Mr. Guinta, the Vice Chair, is recognized for five minutes.
    Mr. Guinta. Thank you, Mr. Chairman. I want to make a 
statement and a comment, then I want to yield some additional 
time to Mr. Kelly.
    What I am hearing from this testimony is that had this 
action not taken place, that America would be forever changed; 
that the Federal Government had no choice but to act. There are 
a lot of people in this Country that disagree with that 
assessment. There are a lot of people in this Country that 
disagree with that assessment. There are a lot of people in 
this Country who believe in America; that a Federal Government 
should be limited and effective and efficient. I happen to be 
one of those Americans and I find it somewhat offensive that 
people in this Committee, in this panel feel that only the 
Federal Government could act to save the private sector.
    Now, we talk about the size and scope of General Motors. 
Fannie Mae is actually larger than General Motors. So under the 
auspice of the Federal Government had to act to save this 
industry, apparently you are also suggesting and admitting that 
we are going to have to act to save Fannie Mae. I am not sure 
that people in this Country believe in that either.
    There is one question I have for Mr. Wilson. Did unions get 
special treatment in this bailout, yes or no?
    Mr. Wilson. No.
    Mr. Guinta. In your opinion.
    Mr. Wilson. No.
    Mr. Guinta. Okay.
    Mr. Zywicki, in your opinion, did unions get special 
treatment in this bailout?
    Mr. Zywicki. Yes, absolutely.
    Mr. Guinta. Okay. Why do you think that?
    Mr. Zywicki. As we document in our paper, first, they were 
treated better with respect to their VEBAs in the General 
Motors cases than other unsecured creditors were treated; 
second, they were treated much better than employees typically 
are treated in bankruptcy cases, and they were allowed to 
retain wages that, frankly, are above market wages, above any 
of their competitors' wages, and were thereby prevented from 
having to do what typically happens; and, third, there was 
really no justification for giving $1 billion to the retirees 
of another company, which is what they did with respect to 
Delphi.
    Mr. Guinta. So, Mr. Wilson, is Mr. Zywicki telling the 
truth or is he lying?
    Mr. Wilson. I don't think he is lying; he is just mistaken, 
and woefully so.
    Mr. Guinta. So you don't think what he said actually 
happened?
    Mr. Wilson. I think he has the facts completely wrong, and 
I would be happy to go through in detail why.
    Mr. Guinta. Okay, explain to me in 15 seconds how he is 
wrong.
    Mr. Wilson. Well, there is no way to explain $26 billion of 
mischaracterization in 15 seconds. I would be happy to explain 
it----
    Mr. Guinta. Twenty-six billion dollars?
    Mr. Wilson. That was his claim.
    Mr. Guinta. Okay.
    Mr. Wilson. But, again, I am happy to go and, of course, 
you will cut me off at any time you want to.
    But if you look at each of the three pieces, sir, we 
negotiated the best possible deal we could with each of the 
constituencies, with both UAW and with the bondholders. The 
bondholders overwhelmingly approved the General Motors 
bankruptcy deal, overwhelmingly.
    If they felt they were disadvantaged, there were people who 
held $28 billion in claims and they could have voted with their 
feet. But they chose not to because they felt the deal was a 
fair deal. So that is why his first point is completely wrong.
    His second point is also completely wrong. We were governed 
in all our actions by the Corker amendments. Senator Corker, 
who is an honorable and wonderful Senator, put forward a bunch 
of stipulations in the early TARP work that said that GM's wage 
rates had to equal--and Chrysler's, but I focused on General 
Motors--GM's wage rates had to equal Toyota's, and that was an 
aspect of long negotiations in terms of what does that mean----
    Mr. Guinta. Let me reclaim my time. The question was, was 
there special treatment or preferential treatment given to 
union members. It sounds like you are doing a lot of explaining 
and telling me why that is not the case.
    Mr. Wilson. Right.
    Mr. Guinta. I disagree with you. I think it is very clear 
that there was special preferential treatment given to one 
group over another. Now, you are free to disagree with me----
    Mr. Wilson. I do, sir.
    Mr. Guinta.--but it is pretty clear that is exactly what 
happened. Let me ask about you. Have you gotten any 
preferential treatment since your work with unions on this from 
unions?
    Mr. Wilson. Of course not.
    Mr. Guinta. Of course not. You have not done any work since 
this with any union?
    Mr. Wilson. Yes, I have done----
    Mr. Guinta. Oh, you have.
    Mr. Wilson. But that is not preferential treatment, sir. I 
completely resent the--do you have any evidence to suggest 
that, sir?
    Mr. Guinta. I am asking the question.
    Mr. Wilson. I answered the question----
    Mr. Guinta. I would like to know what work are you doing 
with unions now.
    Mr. Wilson. The Teamsters approached me because I have had 
enormous success in restructuring broken businesses in many 
walks of life, almost entirely as a private investor, and they 
asked for my help in their largest employer, YRC, which we 
successfully restructured out of court, the largest out-of-
court restructuring done in many years, in record time. And 
because of that success they asked me to work with them in 
other situations.
    But I have also worked with private investors; I have 
worked on my own; I have been on the other side of the table 
from unions both before and since. So I am an investor and 
restructuring expert, and I work in situations trying to fix 
companies before they go away.
    Mr. Guinta. Okay. Thank you very much for your testimony.
    I will yield back the balance of my time to the Chair.
    Mr. McHenry. I thank my colleague for yielding back.
    We will now recognize Mr. Johnson of Ohio for five minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and to the rest of 
the Subcommittee members for granting unanimous consent to 
allow me to participate in today's important hearing.
    As you may know, I represent Ohio's Sixth Congressional 
District, which includes parts of northeastern Ohio and the 
southern suburbs of Youngstown. A large number of Delphi 
retirees, both salaried and unsalaried, live in the district 
that I represent. Since I was elected to Congress in 2010, I 
have been looking closely at the reason why one class of 
workers, the union retirees, were given preferential treatment 
over the non-union salaried retirees.
    It has now been almost 20 months and I still have not heard 
a compelling reason as to why this was done, and today I hoped 
that this hearing would produce answers to those questions that 
many of us have been asking.
    Mr. Bloom, last year, when you were still employed by the 
Obama Administration, I asked you whether or not that all 
parties involved were treated fairly and received neither more 
nor less than they would have simply because the Government was 
involved. Do you still believe, today, that all parties were 
treated fairly?
    Mr. Bloom. Yes.
    Mr. Johnson. Did the newly restructured General Motors have 
any contractual obligations to top-up the union retirees' 
pensions?
    Mr. Bloom. I'm sorry, the newly restructured General 
Motors?
    Mr. Johnson. Yes. Did the newly restructured General Motors 
have any contractual obligations to top-up the union retirees' 
pensions?
    Mr. Bloom. I believe that the newly restructured General 
Motors, as part of their bankruptcy settlement with the UAW, 
reaffirmed their commitment to top up the pensions of the 
Delphi retirees.
    Mr. Johnson. Was it a contractual obligation?
    Mr. Bloom. I believe it was part of their contract with the 
UAW, yes.
    Mr. Johnson. Okay. How can you say that all parties were 
treated fairly when the union retirees kept their full 
pensions, while you and others raising the pension funding 
status 100 percent and the union retirees kept one of the best 
health care plans in the U.S.; on the other hand, the salaried 
retirees lost up to 70 percent of their pension plans and their 
health care? I mean, I learned this principle in kindergarten. 
Fair is fair. How can you give one group 100 percent and take 
70 percent from another group and call that fair?
    Mr. Bloom. First thing, I would say that the union retirees 
at General Motors did not retain the health care program they 
had before; they received a VEBA, which is going to be 
responsible providing the health care. It does not have 
sufficient funds to provide the benefits they used to have, 
number one.
    Number two, when I used the word fair, I did not use the 
word equal. In a bankruptcy, all constituents, and Mr. Feldman 
made this point earlier, all constituents try to use whatever 
leverage they have to try to get the best arrangement they can. 
It was General Motors' business judgment that the overall deal 
they made with the UAW was fair and the cheapest deal they 
could make----
    Mr. Johnson. Mr. Bloom, I hate to cut you off. I appreciate 
your explanation.
    Mr. Bloom. Well, I am trying to answer your question.
    Mr. Johnson. Reclaiming my time, Mr. Bloom. I appreciate 
your explanation, but I am running out of time. It is an 
interesting nuance that now we have changed the definition. 
There is a different between fair treatment and equal treatment 
under the law. That, I don't understand.
    Mr. Zywicki, it is clear to me and many of my colleagues 
and the public that the Obama Administration's auto bailout 
staff used taxpayer dollars to pick winners and losers, and now 
it seems, in an effort to not embarrass the President in a very 
contentious re-election campaign, members of the auto bailout 
team have refused to be interviewed by the inspector general on 
their actions. Now, we know they have agreed to today, but up 
until now it hasn't happened.
    Tens of thousands of salaried retirees saw their retirement 
funds greatly reduced, by up to 70 percent, while the union 
retirees were made whole and were even topped up. Do you think 
it was fair?
    Mr. Zywicki. Equal and fair sound pretty much the same to 
me, Congressman. And I would also say, to Mr. Guinta's earlier 
question, which was he asked whether or not the unions were 
given preferential treatment. What I heard Mr. Wilson say was 
that he justified preferential treatment that he thought was 
reasonable. But I don't think there is any question the unions 
were given preferential treatment.
    Mr. Johnson. Mr. Zywicki, thank you for your answer.
    I would like to yield my last 20 seconds to my colleague 
from Ohio, Mr. Turner, for a follow-up question.
    Mr. Turner. Mr. Bloom, you were saying that there was a 
contractual obligation with respect to the top-ups. Those don't 
survive in bankruptcy, right? So they were free to either 
affirm or not affirm them. So you can't say that it was a 
contractual obligation, therefore they must. They were in 
bankruptcy, correct?
    Mr. Bloom. What I think I said was in the General Motors 
bankruptcy, General Motors made a contract with the UAW. That 
contract included affirming the prior agreement relative to the 
Delphi retirees.
    Mr. Turner. Because I think you were leaving the impression 
with the Committee that there was some obligation within 
bankruptcy, and they had no obligation within bankruptcy, it 
was one that they affirmed, correct?
    Mr. Bloom. That is what I said.
    Mr. Turner. Thank you.
    Mr. Johnson. I yield back, Mr. Chairman.
    Mr. McHenry. I thank my colleague for yielding back.
    With that, I will begin a second round of questions for the 
panel.
    Now, Mr. Wilson, I just want to make sure this is for the 
record. My colleague from Pennsylvania, Mr. Kelly, submitted 
for the record a newspaper article called City and State--I'm 
sorry, Mr. Guinta submitted that for the record. There is a 
quote in here, and I think this is the implication of Mr. 
Guinta. It is not to impugn your character in any way. I 
understand you took great offense to that, but simply saying, 
this is a quote from Mr. Gold, the Teamsters Director of 
Strategic Research and Campaigns: ``We are not at liberty to 
discuss any details, but we approached Harry, Mr. Harry Wilson, 
after closely following the work on the Obama Administration's 
Auto Task Force, and given the similarities that GM faces and 
YRCW faces, we believe he would be a tremendous help in fixing 
this challenging situation.'' Now, that is the quote from this.
    The implication is that you are pretty agreeable to the 
unions, and based on their experience. It is not about 
impugning your character in any way, shape, or form. When you 
testify that you have these Republican credentials, you are 
testifying as an Obama Administration official. He is not 
talking about your character, he is just simply saying that 
your actions in public life have been agreeable to unions, and 
I just want to make sure that is corrected for the record and 
that is established. In no way it is a character assassination; 
that is the context of his questions and comments.
    I want to move on and I want to ask the three auto bailout 
task force folks, Mr. Bloom, Mr. Feldman, and Mr. Wilson about 
this and I want to get your comments on the record. Steven 
Rattner, the Obama Administration's former car czar and one of 
your former colleagues and boss, admitted to the Detroit 
Economic Club this past December ``we should have asked the UAW 
to do a bit more.'' You can see the quote on the screen here. 
``We did not ask any UAW member to take a cut in their pay.''
    Do you agree with Mr. Rattner that, in retrospect, you 
should have asked the UAW to make more concessions? Mr. Bloom?
    Mr. Bloom. I haven't seen Mr. Rattner's speech, so I don't 
know the broader context, and I certainly don't know what he 
means by a bit, so I can't comment specifically. If your 
question is----
    Mr. McHenry. No, I am asking you to comment----
    Mr. Bloom. You asked me if I agreed with him. I can't tell 
you whether I agree with him. I can answer your question. If 
your question is do I think we should have asked the UAW to do 
more, my answer is no.
    Mr. McHenry. No?
    Mr. Bloom. No. I think what we did was reasonable.
    Mr. McHenry. Okay. So no pay cut; fine and dandy.
    Mr. Bloom. I think the aggregate deal that General Motors 
extracted from the UAW was reasonable.
    Mr. McHenry. Okay.
    Mr. Feldman?
    Mr. Feldman. Again, I don't know what the context of 
Steve's quote is.
    Mr. McHenry. Well, let me restate this.
    Mr. Feldman. But what I would say about the UAW is you have 
to remember Chrysler went first. Chrysler's negotiation with 
the UAW was really led by Fiat. So the deal that they 
established, which became part of the pattern bargaining in 
General Motors, was done between two third parties, did not 
have Task Force intervention, no thumbs on the scale. So, in 
hindsight, I am perfectly content with where everything came 
out.
    Mr. McHenry. Perfectly content. So no, the answer is no.
    Mr. Feldman. The answer is no.
    Mr. McHenry. Okay.
    Mr. Wilson?
    Mr. Wilson. Sure, Mr. Chairman. I have said publicly that I 
believe that the only kind of remaining legacy issue of General 
Motors is this pension under-funding, which is an issue--and 
drag on its stock--an issue for the company, and that I wish 
that the restructuring had addressed that in some way. It was 
the judgment of General Motors management, in their negotiation 
with the UAW, that they would keep the pension intact, and we 
didn't intervene in that because this was our mandate. But I 
believe that that is an issue that could have been better 
addressed in bankruptcy.
    Mr. McHenry. So the answer is yes, no?
    Mr. Wilson. I think more could have been done.
    Mr. McHenry. More could have been done, okay.
    Well, thank you for answering the question. I wanted to 
give you an opportunity to respond. This was in Mr. Zywicki's 
testimony.
    Mr. Feldman, if you will put up slide two on the screen 
here, you will see an email that you sent on June 30th, 2009. I 
recognize that you are not going to have instant recollection 
of this. In your email you ask GM to bring the UAW into the 
loop about negotiations over the termination of Delphi pension 
plans, stating that it ``could get messy.''
    The Obama Administration contended that it would not get 
involved in the day-to-day affairs of GM. Was it your place to 
advise GM to talk with UAW, and was this advice based on 
prudent bankruptcy proceedings or was this more about political 
expediency?
    Mr. Feldman. I don't think it was about either, bankruptcy 
or political expediency. I think if you go back to that moment 
in time, basically the PBGC had made the determination that it 
was going to terminate both the hourly plan and the salary 
plan. It previously made the decision on the salary plan and, 
really, what I was doing was reminding General Motors that, 
given their relationships with the UAW, that they needed to get 
out in front of the communications, not substantive advice to 
General Motors.
    Mr. McHenry. Well, this was prior to the PBGC terminating 
the plan.
    Mr. Feldman. Correct. But I think if I recall, and I don't 
have perfect recall, but I think if you recall the PBGC, at 
that point, had started its process of thinking about a 
termination of the Delphi hourly and salaried plans.
    Mr. McHenry. All right. Thank you for putting that on the 
record.
    With that, for the second round, we will go to Mr. 
Cummings. I will recognize the Ranking Member for six minutes.
    Mr. Cummings. Thank you very much.
    Mr. McHenry. Thank you.
    Mr. Cummings. Sorry Mr. Guinta had to leave, I am sure he 
had another engagement, but he said something that was very 
interesting. He said there are some folks that feel that only 
the Federal Government could bail out folks and whatever, make 
corporations run. I don't want to take the words out of his 
mouth, but that is what he implied.
    I don't think there is anyone over on this side that thinks 
only the Federal Government can do what the Federal Government 
was able to do. In other words, there are times when the 
Federal Government has to step in, and I think I am glad that 
the Federal Government did step in to this situation because we 
were able to save millions of jobs.
    And I know that there are people who are working right now 
who would say thank you very, very much for saving my job. 
There are people who, when their child got that notice about 
college, being accepted to a college, they don't have to do 
what the guy did in the commercial, drop his head; they are 
able to say, okay, I can afford that college, we can do this.
    There are others that are able to provide food on the table 
for their families; there are others that are able to live the 
life that they want to live, as opposed to being on the 
sidelines of life, drawing an unemployment check. So I am glad 
that President Obama and this team did what they did.
    In the November 18th, 2008, New York Times op ed entitled, 
Let Detroit Go Bankrupt, Mitt Romney wrote, ``A managed 
bankruptcy may be the only path to the fundamental 
restructuring the industry needs. The Federal Government should 
provide guarantees for post-bankruptcy financing and assure car 
buyers that their warranties are not at risk.'' Mr. Romney 
predicted that, as a result of direct Government assistance to 
the auto industry, ``its demise will be virtually guaranteed.''
    Mr. Wilson, has Mr. Romney gotten it right? Nearly four 
years since Mr. Romney wrote those words, is GM showing signs 
that it is guaranteed to fail?
    Mr. Wilson. I am going to try not to interject myself into 
the presidential debate, but I think----
    Mr. Cummings. No, I just want you--you are a Harvard--and 
that is a lot of thing, I was very impressed. A lot of people 
don't realize this. You are an honor graduate of Harvard 
College and then the business school at Harvard. So I don't 
want anybody to think you are some lightweights. That is why I 
am asking you. No, I am serious. I heard what they said about 
you and I am going to ask you some questions about your 
background a little bit later, but you can go ahead and answer 
the question.
    Mr. Wilson. Sure. I think the results, Congressman 
Cummings, speak for themselves. I think that GM had its most 
profitable year ever in its 103 year history in 2011, even 
though auto sales still have not recovered back to their 
normalized level. And I think it has a cost structure and a 
capital structure that have made it the largest and most 
profitable car maker in the world. So I think as long as they 
keep on the same path, they maintain the same discipline that 
they now have, I believe the company has a bright future.
    Mr. Cummings. Steve Rattner, the former head of the Auto 
Task Force, wrote, in a February 24th, 2012, New York Times op 
ed that Mr. Romney's proposal ``sounds like a wonderfully 
sensible approach except that it is utter fantasy.'' Mr. 
Rattner further wrote that ``every scrap of private capital had 
fled to the sidelines'' and without government financing 
initiated by President George W. Bush in December 2008 the 
companies would not have been able to pursue Chapter 11 
reorganization.
    Mr. Wilson, Mr. Bloom, Mr. Feldman, is Mr. Rattner's 
assessment correct? Do you agree that there simply were no 
other options available aside from complete liquidation or the 
path that was taken? We will start with you, Mr. Bloom.
    Mr. Bloom. It was our judgment, and I have no reason to 
question it, and it was based on extensive talking in the 
market, plus our collective experience, that if the Government 
had not provided the debtor-in-possession financing, that 
General Motors would have had to liquidate.
    Mr. Cummings. Mr. Feldman?
    Mr. Feldman. I completely agree. We were in touch with the 
largest financial institutions in the world. They were simply 
not going to provide capital. We spoke to the largest private 
equity funds in the world; they were talking about needing nine 
months to due diligence General Motors to make a determination 
as to whether they would make an investment. The U.S. 
Government, unfortunately, was a lender of last resort, but it 
was the only lender, in my view.
    Mr. Cummings. Mr. Wilson?
    Mr. Wilson. That is correct, sir. I talked about, in my 
written testimony, this unique confluence of events of both the 
failures of the companies at the time of a complete freeze in 
the financial markets, and it was those two things that made 
this so unusual. In normal times, even in bad economic normal 
times, you can find private capital. We beat the bushes to try 
to find private capital and there was no one willing to step 
forward with any kind of reasonable terms or any terms at all 
to fund even a few billion dollars, much less the $80 billion 
we needed to effectuate the rescue.
    One private equity firm approached us and said they would 
put in $1 billion, so we were still $79 billion short, if we 
guaranteed them an 8 percent return. Now, what would the 
reaction of the taxpayer have been, or this panel, had someone 
agreed to do that? It should have been, rightfully, outraged 
and, of course, we said no. So that was the state of the world 
in which we lived in March of 2009 and the context in which we 
had to make decisions.
    Mr. Cummings. I guess it is easy for people to sit in the 
bleachers and look down at the game and then try to second 
guess the efforts of the team, and even when the team wins and 
wins big time, sit on the sidelines and criticize the calls of 
the game. That is just my opinion.
    I yield back.
    Mr. Turner. [Presiding.] Mr. Kelly?
    Mr. Kelly. I thank the Chairman.
    Just so we can be clear on this, and I sometimes get 
confused; I have only been here for a year and a half, but I 
think the confusion comes are we in Washington, D.C. or are we 
on Mt. Olympus. Because the decisions made by government, 
really, we talk about they bailed out the auto industry. I 
understand you bailed out the auto industry, being the guy who 
sold cars his whole life in a family that has been in it over 
60 years: it is the market that saved the auto industry.
    We are not talking, by the way, gentlemen, about union jobs 
and non-union jobs, Republican jobs and Democrat jobs; we are 
talking about American jobs. There is such a fragility to this 
market, and I really get confused sometimes when people who 
have never actually done it can tell you exactly what caused 
this. I mean, wow, I can tell you what caused it: overcapacity, 
over-production.
    When you are structured to do 16.5 million units a year and 
it goes down to 9 million units a year, my goodness, do you 
think you have a problem when you have lost over 40 percent of 
your market? The answer is yes.
    The Government interfered with the natural flow of the 
business cycle. They picked winners and losers. There is 
absolutely no doubt that they picked winners and losers. This 
idea that we have an evolving truth that, as time goes forward, 
we can talk about what is fair and what is equal, that we can 
pick and choose winners and losers and then sit back and say, 
but if we hadn't done it, you don't understand, the market 
would have collapsed.
    The market did collapse. It collapsed because people didn't 
know what their future looked like. A guy who doesn't know if 
he is going to have a job next year does not go into a 48-month 
commitment or a 60-month commitment to buy a new car. How do I 
know this? I stand on the lot with them, I sit in the showrooms 
with them, and I see their pain.
    But whenever you determine that one group will be bailed 
out and another will not, that is just flat outright wrong. 
Let's not become confused. It is pure folly that if it had not 
been for this measure all of the manufacturers would have 
collapsed. Are you kidding me? Do you know there were auto 
manufacturers that actually gained market share during that 
time period? The market, not Government, determines success and 
failure.
    What happened in this situation is that the Government 
decided who wins, who loses; who gets fully funded, who gets 
nothing; who gets to sit at the table and eat, and who gets to 
sit outside. Let there be no confusion over the definition 
between of fair and equal. In the Country that I grew up in, it 
is the same thing.
    And I get sick and tired when people use a legal argument 
to do an end-run on what is right for the American people. That 
is absolutely pathetic. And if that is what we have reverted 
to, no wonder the American people don't have faith in this 
institution anymore. No wonder they don't have any faith in a 
judicial system anymore that picks and chooses winners and 
losers. Oh, yeah, you can fight it if you have enough money.
    I have to tell you, and you know and I know it and 
everybody else knows it in this Country, I am not against the 
unions. Listen, I love the unions. I love what they do. But why 
did you bring them to the table? There is an old saying right 
now that I really believe in: if you are not at the table, you 
are on the menu.
    This Government picked and chose who the winners and the 
losers were. The recovery of the American automobile industry 
has nothing to do with this. There would still have been 
companies. These companies would have gone through a 
bankruptcy, would have come back. We didn't save millions of 
jobs. A bankruptcy with historical, what a recovery period. The 
biggest bankruptcy in America history, bam, 36, 60 days we are 
back on the street and running again, and no problems.
    So when we talk about what is clear and what is 
transparent, when we talk about what is fair, when we talk 
about the 99 percent and the 1 percent, fairness, to me, is 
pretty much handpicked. I will be fair with certain people, but 
I won't be fair with others.
    Mr. Chairman, I appreciate the hearing today and I know 
that there is some confusion about it, but from having been 
there and having to navigate through those very difficult 
times, keep in mind one thing: it is the market that will 
always be the opportunity. How you address that market, your 
ability to compete in a market that is global, your ability to 
build cars of the highest quality has never been contested. You 
know what the problem was? It cost too much to build them here. 
American people go out and the people I talk to, you know what 
they look at? How much is it going to cost me a month. So that 
is what it comes down to.
    So I am going to yield back, but I have to tell you, having 
been there and having been in those waters without a life 
jacket, without anybody throwing me a line, it is offensive to 
me that somebody was picked to win and the other people were 
picked to lose.
    Mr. Cummings. Will the gentleman yield?
    Mr. Kelly. I do.
    Mr. Cummings. I have tremendous respect for you and I know 
you know that. I just want to make sure I understand. Are you 
saying that this situation could have gone into bankruptcy and 
we would have still had the results that we have? Is that what 
you are trying to say?
    Mr. Kelly. Well, reclaiming my time.
    Mr. Cummings. Yes, please. I say this most respectfully.
    Mr. Kelly. And I appreciate that, Mr. Cummings, because you 
and I do have a good relationship. It did go through bankruptcy 
and it came back. The question is who was made whole, who was 
made partial, who was left out in the cold.
    And I have to tell you, gentlemen, I appreciate you being 
here today, but it took a year? It took a year to come? It took 
a year to answer these things from SIGTARP? Really? I have a 
passion for this too. In fact, my friends say to me all the 
time, Kelly, you don't make any sense to me; you left what was 
probably the next to the last on the list of what people 
respect, being the automobile business, and you went to the 
worst.
    [Laughter.]
    Mr. Kelly. We rely on you. You are the people who we rely 
on for the answers. And when you don't testify, what does that 
look like? Tell me. Not in legal jargon, but in common sense, 
everyday American jargon. What does that look like to the 
people who pay for all this, the American taxpayers? It is 
pathetic. The fact that you can do it and you take advantage of 
it is even more pathetic.
    I yield back my time.
    Mr. Turner. Thank you. As we proceed with additional 
questions, I just want to remind everyone that the topic of 
this hearing is The Administration's Auto Bailouts and the 
Delphi Pension Decisions: Who Picked the Winners and Losers. It 
is not the issue of the auto bailout itself, the bankruptcy 
itself; it is what happened with the Delphi pension decisions. 
We are having this hearing because these three gentlemen 
refused to answer questions. Mr. Bloom agreed to answer written 
questions for me a year ago at a hearing, refused since to 
answer them, and these three gentlemen have refused to answer 
SIGTARP's questions. The GAO report is not sufficient; we need 
the SIGTARP report.
    So, with that clarification, I will turn them to Mrs. 
Maloney. Then after her question we will open it up to an 
unlimited time period since Mr. Bloom indicated that the only 
way he was going to answer the questions that he had promised 
Congress that he would answer a year ago in writing is to be 
asked those questions in this hearing room. I will stay and ask 
him those questions.
    Mrs. Maloney.
    Mr. Cummings. Would the gentleman yield just for one 
second, one question, Mr. Turner?
    Mr. Turner. Yes.
    Mr. Cummings. I just want to make clear on this. Did Mr. 
Bloom, I have been here and I have listened. Did he say the 
only way that he would answer questions is to answer----
    Mr. Turner. Well, he is before us.
    Mr. Bloom, I asked you----
    Mr. Cummings. Is that what you said?
    Mr. Turner.--if you would answer these in writing, and you 
said that you would not. I certainly intend to ask you these 
questions here because of that, and your answer stands in the 
record.
    Mr. Bloom. What I said was if you want to go through these 
questions, I am here today. I also said I would talk to 
SIGTARP. If you would like to have SIGTARP ask me these 
questions, I will do it.
    Mr. Turner. But you refused to provide me in writing the 
answers that you promised, and we showed the video----
    Mr. Bloom. As I said----
    Mr. Turner.--before this Committee previously in writing.
    Mr. Bloom. I responded to that already.
    Mr. Cummings. I just wanted a clarification. That is all.
    Mr. Turner. Thank you.
    Mrs. Maloney.
    Mrs. Maloney. Well, pertaining to the pension, I would say 
that members of Congress recognize and sympathize with the pain 
that many Delphi workers are experiencing since GM decided not 
to top-up their pensions, and since everybody seems to want to 
attack Mr. Bloom, I will just ask him. Do you recognize that 
pain too, Mr. Bloom, of some people who were not made whole?
    Mr. Bloom. Of course. Speaking personally and to my 
knowledge, everybody on the Auto Task Force understood and had 
great sympathy for all of the people involved in this tragic 
circumstance who had to make sacrifices. The Delphi salaried 
employees are on the list, but unfortunately, Congresswoman, 
the list is very long. And as I have said repeatedly, our 
judgment was, on balance, while there was terrible suffering, 
much greater suffering was averted. But that in no way is to 
suggest that there was not suffering.
    Mrs. Maloney. Well, I agree with your statement. Had Delphi 
failed, had GM failed, not only would their workers have 
suffered, but also the entire communities. And I would say our 
overall economic health of our Country would have been much 
worse.
    I would like to take issue with the prior gentleman's 
statement. He said that it could have been handled and it would 
have worked itself out on it own. But I want to reference and 
put into record a November 17th publication of 2010, and this 
publication is entitled The Impact on the United States Economy 
of the Successful Automaker Bankruptcies. This was issued by 
the Center of Automotive Research, so this is an independent 
validation, and in this research, which is independent from the 
GAO research that basically says the same thing, the 
Government's actions avoided personal income losses totaling 
over $96 billion and avoided 1.1 million net job losses in 2009 
and another 314,000 in 2010.
    So, Mr. Bloom, since everybody wants you to answer the 
questions, I will ask you--and, Mr. Feldman, Mr. Wilson, if you 
would like to comment--is that correct? Do you agree with this 
independent source? Had it not been for the Government 
intervention, your work for crucial months in 2009, could the 
Country have experienced more than a million net job losses? I 
predict is even more. The impact even hit New York State for 
the suppliers that went out of business that were supplying the 
auto industry.
    So I just wonder do you agree with this statement from this 
independent research organization?
    Mr. Bloom. I haven't reviewed the exact----
    Mrs. Maloney. Well, it basically says had we not acted, we 
would have lost----
    Mr. Bloom. But our judgment at the time, and the material I 
have seen since then that I have reviewed that suggests that 
the losses would have been very significant in jobs. Cars said 
a million; others have used larger numbers. Mark Zandi recently 
said 2.5 million jobs were at risk. So I am not enough of an 
economist to choose between them, but I think our judgment that 
the losses could have been quite catastrophic has been 
confirmed.
    Mrs. Maloney. I just want to ask you, Mr. Bloom, has any 
member of Congress congratulated you and thanked you for your 
hard work in what resulted in, by all accounts, saving over a 
million jobs that impacted many of our great States like Ohio, 
Michigan, Pennsylvania, Missouri, and Illinois? They are all 
interrelated in the supply chain of the auto industry.
    I just would like to ask Mr. Bloom, Mr. Feldman, and Mr. 
Wilson has any member of Congress ever thanked you? Today I 
want to thank you for your public service. I want to thank you 
for your hard work in saving American jobs and I would say 
saving American industry and prestige. I personally cannot even 
think of an America that doesn't make her own cars. And now we 
have bounced back with that American spirit, can do, and are 
even exporting cars and employing people and growing. I just 
want to know has any member of Congress said thank you?
    Mr. Bloom. Congresswoman, I very much appreciate your kind 
words. From time to time, other members of Congress have 
acknowledged that some good things happened.
    Mrs. Maloney. Mr. Feldman, has anyone ever thanked you? I 
thank you today. Has anyone ever thanked you?
    Mr. Feldman. I appreciate that, Congresswoman. I think this 
is the first time I have been thanked.
    Mrs. Maloney. Well, thank you very much. You are an 
American hero. I appreciate your hard work.
    Mr. Wilson?
    Mr. Wilson. Thank you as well, Congresswoman. I have had a 
few Democrats and Republicans thank me over time, but it is 
always nice to hear it. Thank you.
    Mrs. Maloney. Well, I think more of us should be saying 
thank you. Thank you for your public service. You saved jobs; 
you helped America; you grew our economy. Thank you.
    Mr. Turner. Ms. Romero, I would like to thank you for 
bringing forth the light that these three gentlemen have 
refused to talk to you and for your bringing it to our 
attention in a way where we could pull them before us and get 
them to talk to us to commit to talk to you.
    We are going to go to a 10 minute round of questioning. My 
next questions are going to be for Mr. Feldman.
    I do have a quick question for you, Ms. Romero, first. You 
said in your letter SIGTARP believes that the Auto Task Force 
played a role in the pension decision and these individuals' 
failure to speak are a significant obstacle. You do believe 
that, right, that they played a role?
    Ms. Romero. Yes. Yes.
    Mr. Turner. Thank you.
    Mr. Feldman, we are going to spend a significant amount of 
time on the issue of what you did, what your role was, because 
that is really what you guys aren't speaking about. I mean, the 
whole question from SIGTARP, GAO, this Congress, have been what 
did you do; what was your role; what was the basis of the 
decision-making.
    Now, I am going to read you your bio, that I am assuming 
you either approved or wrote yourself. Mr. Feldman was 
recruited to service as chief legal advisor for the Obama 
Administration's Task Force on the auto industry. This cabinet 
level Treasury Department Task Force was assembled to, quoting 
your bio, help develop the overall strategy to restructure and 
recapitalize General Moors Corporation and Chrysler, a 
``strategy'' which resulted in the groundbreaking legal 
proceedings that implemented a comprehensive financial solution 
for both companies.
    Now, SIGTARP believes that you were involved. You said you 
were negotiating among the parties. I understand that, from an 
absolute legal standpoint, that PBGC is a party to this and has 
an ability to make its own decision in settlement negotiations, 
but they didn't do that in a vacuum, right, Mr. Feldman? They 
had you running in between a bunch of different other people 
making proposals to PBGC as to what they should or should not 
do. Now, isn't that correct, Mr. Feldman?
    Mr. Feldman. I think really what they would or would not be 
willing to do--and to just take a step back, the Auto Team, 
which was the working group at Treasury that reported to the 
Auto Task Force, was really charged with helping restructure 
Chrysler and General Motors. We took on additional tasks that 
were critical to those two entities, including the financial 
arm of Chrysler, the financing arm of General Motors, and then 
ultimately Delphi because General Motors was providing funding 
and at the time we got involved was really the sole source of 
funding for Delphi. But we did not--go ahead, you can take 
back.
    Mr. Turner. Thank you. Going to the issue, then, using your 
language instead of mine, of determining what they would or 
wouldn't do, who are the parties that you ran in between of 
doing the negotiating determining the would or wouldn't do? 
Because would or wouldn't, it is still going to PBGC and saying 
someone would like you to do X; will you do X, right?
    Mr. Feldman. The PBGC and General Motors were the main 
parties involved in making decisions--well, the PBGC was the 
main party involved in making decisions about the termination 
of Delphi's pension plans. What the impact of that was had an 
impact on General Motors, and I was playing essentially shuttle 
diplomacy between General Motors and the PBGC, which candidly 
didn't get along very well.
    Mr. Turner. And who else?
    Mr. Feldman. On that issue?
    Mr. Turner. Yes.
    Mr. Feldman. I reported to the Auto Team, but I didn't--
there wasn't a--I am not thinking of a party that was directly 
involved in that.
    Mr. Turner. You didn't share any information about what the 
package was in developing this strategy that is in your bio 
with individuals at the White House, with individuals at 
Treasury? Is that what your testimony is?
    Mr. Feldman. Well, I worked for Treasury, so certainly I 
reported to the Auto Team----
    Mr. Turner. Outside of the Auto Team.
    Mr. Feldman. I kept George Madison informed.
    Mr. Turner. In Treasury, outside of the Auto Team.
    Mr. Feldman. George Madison was General Counsel of 
Treasury, not part of the Auto Team. I was in the Legal 
Department at Treasury, so I did keep Mr. Madison updated; he 
was the General Counsel of Treasury. But in terms of the White 
House, the only people I ever spoke to at the White House was 
Brian Deese and Larry Summers.
    Mr. Turner. Okay, we are going to turn to emails now. We 
have a July 6th email from Joseph House at PBGC. This one we 
don't have on the top.
    Mr. Feldman. Okay.
    Mr. Turner. It is a July 6th email, 9:45 p.m., so he is 
emailing late, and he said I just spoke with Matt Feldman, who 
relayed the following: ``We agreed that any settlement 
discussions would be best saved for direct coordination between 
U.S. Treasury and PBGC at this point, rather than a subject of 
group coordination.''
    Now, he is saying that the settlement discussions were, at 
that point, as a result of his conversation with you, a direct 
coordination between Treasury and PBGC. He does not mention 
General Motors. Do you disagree with his email?
    Mr. Feldman. You would have to ask Mr. House what he meant 
by the email, but I interpret what he meant to mean that we 
were going to talk to the PBGC and then we, meaning Treasury, 
were going to talk to General Motors. Treasury did not play a 
role or did not have authority to settle issues between the 
PBGC and General Motors.
    Mr. Turner. But you did have a role in making 
recommendations and making proposals.
    Mr. Feldman. I would certainly comment on proposals and 
recommendations. The PBGC would ask me did I think that 
something would be acceptable; General Motors would say do you 
think the PBGC would find something acceptable. I certainly 
gave them my judgment.
    Mr. Turner. Well, what occurred after the July 6th email--I 
am going to read that one again. This is Joseph House saying 
that he had just spoken to you and that he agreed with you that 
any settlement discussions would be saved for group 
coordination between Treasury and PBGC, rather than direct 
coordination, is followed by the email that I showed you 
previously, which is slide 6 on July 8th.
    If we could have slide 6, please.
    [Slide.]
    Mr. Turner.--where again Mr. House is reporting that he had 
spoken to you. This one is 6:23 p.m. and this is July 8th. So 
subsequent to your reported agreement by Mr. House that we are 
going to directly coordinate this settlement negotiation 
between Treasury and PBGC, he then reports that you say that 
Feldman reported that he made progress discussing our proposal 
with a number of key folks in Treasury and at White House, but 
has not yet wrapped up his coordination.
    Let's turn to slide 5, then.
    [Slide.]
    Mr. Turner. This is July 15th, 10:57 a.m. This is Karen 
Morris forwarding one from John Minke and it says, Feldman will 
then take it to GM and get their approval, which will either be 
a rubber stamp or one last chance to nick us on the deal.
    We all accept that PBGC has the legal authority with 
respect to its decision-making. We also know that it did that 
in the environment of the pressure of these negotiations and we 
also understand that there were a number of parties who had 
positions and roles and proposals as to what PBGC should do or, 
using your language, would or wouldn't do.
    Mr. Feldman, we would like to get a better understanding of 
that, which is why you have been called this Committee and why 
SIGTARP wants to talk to you, because they believe that you 
were actively involved in the decision-making. Now, I am going 
to ask you a very simple question. I am assuming that with 
respect to the Delphi salaried pensions, that the proposals 
that ended up with the pensions being cut were not solely 
generated by PBGC; that in the negotiations with your liaison 
with the White House, others in Treasury outside of the Auto 
Task Force, the Auto Task Force, and General Motors, that they 
had positions and recommendations as to how those pensions 
should be handled. Is that correct?
    Mr. Feldman. I never had a conversation, nor do I recall 
any conversations where we told the PBGC how the----
    Mr. Turner. I didn't ask you that.
    Mr. Feldman. I am sorry.
    Mr. Turner. I ask you whether or not anyone else had a 
position or a proposal in your shuttle negotiations with 
respect to the Delphi salaried pensions other than PBGC. That 
is a pretty simple question. I would assume the answer has to 
be yes.
    Mr. Feldman. I don't believe so, not with respect to the 
salaried.
    Mr. Turner. So you are testifying under oath before this 
Committee that at no time did anyone else that you were working 
with in your position as the chief legal adviser shuttling 
negotiations, no one else offered you and no one else provided 
you any other proposal with respect to the Delphi salaried 
pensions in any aspect?
    Mr. Feldman. Let me correct it. Delphi certainly, its 
position was it wanted to retain the pension plans and have 
General Motors pay for it or assume it. As I recall, and the 
time frame is a little bit fuzzy, but, as I recall, Delphi 
certainly did not want to give up its pension plans in the 
early stages of my involvement.
    Mr. Turner. Anyone else have a position or a proposal with 
respect to those pensions during your settlement negotiations?
    Mr. Feldman. I don't want to be unequivocal, but not that I 
recall.
    Mr. Turner. As you were before. Well, that is part of the 
subject matter of this investigation and SIGTARP's 
investigation, so I wish you well in your recollection process 
with the----
    Mr. Feldman. I am happy to look at more emails or other 
information you might have.
    Mr. Turner. Excellent.
    Mr. Feldman. I don't recall it.
    Mr. Turner. Excellent.
    Mr. Cummings?
    Mr. Cummings. Mr. Chairman, just out of curiosity, are you 
planning to end the hearing now or are you getting ready to 
just go on and on and on?
    Mr. Turner. No, I am going next to Mr. Bloom for him to 
answer the questions that he is now refusing to answer in 
writing that he had promised Congress in June of last year that 
he would answer in writing, because he invited those questions, 
and I will entertain, with your concurrence, the dismissal of 
the other panel members if there are no other questions for 
those other panel members, so Mr. Bloom can stand before us and 
answer the questions he has refused to answer.
    Mr. Cummings. Well, that is fine with me. And I hate to 
waste people's time, so I think that is very generous of the 
Chairman. You know, one of the things, Mr. Chairman, it has 
come to my attention that your questions of Mr. Bloom have been 
answered by the Secretary of the Treasury, and Mr. Bloom 
forwarded your questions after the hearing.
    Mr. Turner. Actually, no, they haven't. I have the 
Secretary's answers and his answer was this is a matter of 
litigation; I cannot answer.
    Mr. Cummings. I see. All right. But if the Chairman wants 
to dismiss, I think we should allow these folks to go. I have 
no problem with that.
    Mr. Turner. I am certainly fine with that.
    At this point, then, we will take----
    Mr. Cummings. One other thing. I did forget to say one 
thing. When Mrs. Maloney was asking the question about anybody 
saying thank you, I just want you all to know I am thanking 
you, and I thank you very much.
    To Ms. Romero, I am hoping that this has been helpful to 
you. I am hoping that you get the cooperation you need. We, on 
both sides of the aisle, support your efforts and we want to 
make sure you have access to the information that you need in 
order to do your job, and I want to thank you for working with 
both of our offices to try to make this thing move along. Thank 
you.
    Ms. Romero. Thank you so much, Ranking Member Cummings.
    Mr. Turner. At this point we will take a one minute recess 
while the other members of the panel but for Mr. Bloom excuse 
themselves.
    [Pause.]
    Mr. Turner. Mr. Bloom, we are going to get started. We have 
votes that are going to occur, so we are going to be limited, 
as I am certain you are very sad to hear, in the number of 
questions that we are going to ask you. I want to reiterate 
that these are questions that were given to you on June 22nd 
that to this Committee, in a seat similar to the one you are 
sitting in, you said absolutely that you would answer in 
writing. You did not answer them and today you are refusing to 
answer them in writing, so we are going to go through this 
where I ask you the question and get your answer.
    Mr. Bloom. Congressman, the only clarification I would like 
to make is that I believe that the letter that the Secretary of 
the Treasury or Tim Madson, on behalf of the Secretary of the 
Treasury, sent you on November 1st, 2011, did not refuse to 
answer the questions because of the litigation. In fact, there 
are two and a half pages of response to the issues raised in 
the letter. But that said, if you have questions, I will do my 
best to answer them.
    Mr. Turner. We will submit those questions and answers, 
because we have them, obviously, for the record and everyone 
can see that in fact they say this is subject to litigation. 
But we are not going to waste our time on this.
    Mr. Cummings. Mr. Chairman, Mr. Chairman, Mr. Chairman. 
Just a point of clarification. I have the letter, the November 
1st letter, and I have just kind of perused it, but my staff 
has read it in detail, and just for clarification, you said 
that he said that it was under litigation. It just seems like 
there is a lot more to this letter than that. He seems to be 
answering quite a few things in detail. I just wanted 
clarification on it, that is all.
    Mr. Turner. We have answers both in this letter and also 
letters answered directly from Secretary Geithner, and in that 
letter he specifically states, he cited both and you cited it 
previously, an answer of litigation. And this does not answer 
the questions, but we will go forward.
    Mr. Bloom, in the discourse between Treasury and PBGC, what 
role did the Auto Task Force play in the decision-making to 
terminate the pension plan of the Delphi salaried retiree 
workers?
    Mr. Bloom. I couldn't really expand on what Mr. Feldman 
said. I think that would be my answer.
    Mr. Turner. So you have no separate answer of yourself.
    Mr. Bloom. No.
    Mr. Turner. Well, Mr. Feldman indicated that it was an 
advisory position, and what we would like to know is what was 
the position of the Auto Task Force in those discussions with 
respect to the Delphi salaried workers and their pensions.
    Mr. Bloom. I think it was what Mr. Feldman said it was.
    Mr. Turner. You are going to do that for every answer?
    Mr. Bloom. I don't know.
    Mr. Turner. You don't have an independent answer?
    Mr. Bloom. On that question, Congressman, I do not have a 
different answer. If I agree with what has already been said, I 
thought it would be expeditious for me to----
    Mr. Turner. If you had answered it in June would you had 
your own answer?
    There are many that believe that there were significant 
numbers of conflicts of interest between the Treasury, PBGC, 
the Auto Task Force, and new GM. Secretary Geithner serving on 
both the board of PBGC, being the Secretary of the Treasury, 
the Auto Task Force being part of Treasury, and, of course, new 
GM receiving from the Treasury its capital infusion.
    Did you ever have a discussion at the Auto Task Force, the 
actual or potential conflicts within Treasury and the Auto Task 
Force with respect to this bankruptcy proceeding and the Delphi 
salaried pensions? And what was the subject of those 
discussions?
    Mr. Bloom. I do not recall a conversation in Treasury about 
whether or not the issues you raise would pose a conflict of 
interest. I do not recall such a discussion.
    Mr. Turner. Do you believe now that they do?
    Mr. Bloom. I don't see where a conflict of interest would 
have been, no, sir.
    Mr. Turner. In the termination of the Delphi salaried 
pension plans, a significant issue of dispute are the foreign 
assets held by Delphi and the liens that PBGC either asserted 
or might have asserted against those liens. Ultimately, PBGC 
released these liens as part of a settlement in exchange for 
payments by new GM that did not include the Delphi salaried 
retirees' pension plans; the liens did. Do you recall any 
discussions at the Auto Task Force concerning Delphi's foreign 
assets, the liens, and PBGC?
    Mr. Bloom. I do not recall any such discussions.
    Mr. Turner. Would you assert today that those discussions 
did not occur?
    Mr. Bloom. No.
    Mr. Turner. Is it possible they occurred?
    Mr. Bloom. I think anything is possible. I do not recall 
any such----
    Mr. Turner. Did you ever have a conversation about Delphi's 
foreign asset and the liens of PBGC?
    Mr. Bloom. I have no recollection of having any 
conversation of that nature.
    Mr. Turner. We are getting pretty far here. So far we get 
you will give us the answer of the gentleman who answered 
previously or you don't recall. Helpful.
    Mr. Bloom. I can only testify to the best of my ability, 
Congressman.
    Mr. Turner. Clearly. There is a significant amount of 
concern that has been raised about political considerations 
with respect to the PBGC negotiations and the pension plans, 
salaried retirees' pensions, and even the issue of the foreign 
asset liens of PBGC. Did you ever have any consideration or any 
discussions concerning the political effects of the outcomes of 
your recommendations?
    Mr. Bloom. Could you clarify what you mean by the political 
impacts of the outcomes?
    Mr. Turner. I think it is fairly clear. Did you have any 
discussions concerning the political aspects or consequences of 
your decision-making?
    Mr. Bloom. No, not that I recall.
    Mr. Turner. The United Auto Workers have stated that the 
Delphi salaried retirees should be treated with fairness and 
equity. Additionally, the UAW stated in a letter dated January 
15th, 2010, that it supports providing the same top-ups to the 
salaried workers as a matter of fairness and equity that had 
bee provided to other Delphi workers. You answered Mrs. Maloney 
and indicated that you understand the pain that people have. Do 
you agree with UAW?
    Mr. Bloom. I am not familiar with the full context of the 
UAW's comment, but I can answer your question. I can't say 
whether I agree with them or not because I haven't read that 
document. I think a lot of people, as I said earlier, have 
suffered as a result of the GM bankruptcy, and if Congress 
would choose to help one of those constituents who was hurt, 
that would be up to Congress to do. I think it would open a can 
of worms, but I don't have a judgment as to whether Congress 
ought or ought not to do it.
    Mr. Turner. Mr. Cummings?
    Mr. Cummings. I guess I have about, what, about 10 minutes? 
I am going to read this letter into the record.
    November 1st, 2011, Department of Treasury. It is addressed 
to the Honorable Michael R. Turner and it says, Dear 
Representative Turner. This is from Mr. Massad, the Assistant 
Secretary, Department of Treasury. And this is one of the 
letters that we were just talking about in response to 
questions that were raised sometime earlier by Congressman 
Turner.
    It says I am writing in response to your recent letter to 
Secretary Geithner in which you raise certain questions 
regarding the Pension Benefit Guaranty Corporation's decisions 
related to the pensions of certain former employees and 
retirees of the Delphi Corporation. You submitted these 
questions previously to Mr. Ron Bloom, who has since left his 
position with the Administration. Please allow me to respond on 
behalf of the Secretary.
    We recognize that the bankruptcy of Delphi has been 
extremely difficult and challenging for all its employees and 
we are acutely aware of the significant hardships that the 
entire United States automobile industry has faced in recent 
years. The issues you raise in your letter pertaining to 
certain agreements entered into by General Motors Corporation 
in 1999, when the old GM spun off Delphi into a separate 
company, as well as decisions made in connection with Delphi's 
2005 bankruptcy filing.
    Around the time of Delphi's 1999 spinoff from old GM, old 
GM entered into ``top-up agreements'' commitments to pay 
supplemental pension benefits to certain participants in the 
Delphi hourly pension plan, represented by three unions, United 
Auto Workers, the International Union of Electrical Workers, 
and United Steel Workers. Those agreements provided that, in 
the event that benefits under Delphi hourly plan were frozen or 
the plan was terminated, old GM would cover any shortfall below 
the level of benefits promised.
    Over the next several years, Delphi suffered large losses 
and filed for bankruptcy in October 2005. In 2007, old GM, 
Delphi, and the three unions who were party to the top-up 
agreements agreed to extend these commitments. Although there 
were negotiations between old GM and other unions concerning 
similar arrangements, old GM did not enter top-up agreements 
with any other union, nor did it enter into an agreement with 
participants in the Delphi salary pension plan. At the time of 
the 1999 spinoff, the Delphi salary plan was fully funded; 
whereas the Delphi hourly plan was underfunded. Delphi's 
original plan was to emerge from bankruptcy proceedings without 
terminating its pension plans.
    In 2009, four years after Delphi filed for bankruptcy 
protection in 2005, it was determined that, for Delphi to 
emerge from Chapter 11, its pension plans would need to be 
terminated. As a result, Delphi entered into agreements with 
the PBGC to terminate the Delphi salary plan and the Delphi 
hourly plan, and placed both plans under the trusteeship of the 
PBGC.
    Treasury did not have a role in authorizing, approving, or 
consenting the termination of the Delphi salary plan. In 2009, 
in connection with the bankruptcy proceeding of old GM and 
Delphi, General Motors Company agreed to honor certain 
commitments into which old GM had entered, including the 1999 
top-up agreements. New GM has stated publicly that although the 
Delphi bankruptcy was ``a very difficult situation,'' it felt 
that it had made appropriate provisions for the Delphi salary 
plan at the time of the spinoff in 1999.
    The questions you submitted to Mr. Bloom primarily asked 
whether the Presidential Task Force on the auto industry was 
involved in the decisions made by the PBGC and GM regarding the 
pensions of former employees and retirees of Delphi. As Mr. 
Bloom explained in various congressional testimonies in 2009, 
and more recently before the Subcommittee, the previous 
administration provided temporary loans to General Motors and 
Chrysler to avoid uncontrolled liquidations of these companies 
at a time when our economy and financial system were already 
severely stressed.
    President Obama agreed to extend that assistance provided 
that the companies produce viability plans as to how they could 
become competitive. On February 15th, 2009, President Obama 
created the Auto Task Force, made up of cabinet level officials 
and staffed by Treasury, to review the viability plans for the 
companies. The overriding objective that guided the Auto Task 
Force was to bring much needed stability to this crucial sector 
of our economy, keep hundreds of thousands of Americans 
working, and give General Motors and Chrysler a chance to 
become viable and competitive American businesses.
    As Treasury officials have stated, the President directed 
the Auto Task Force to take a commercial approach and ensure 
that in any restructuring the companies took on only those 
liabilities necessary for successful operation. The Auto Task 
Force refrained from intervening in the day-to-day decisions of 
these companies. These companies' restructuring, including GM's 
decision to assume top-up agreements entered into by GM in 
1999, were consistent with those principles.
    These matters have also been reviewed by our Nation's 
judiciary in two contexts, as well as by the Government 
Accountability Office. As you may know, the termination of 
Delphi salary plan and its placement under the trusteeship of 
the PBGC are currently the subject of litigation in black 
versus Pension Benefit Guaranty Corporation. On September 2nd, 
2011, the court dismissed the portion of the case against 
Treasury, the Auto Force, Secretary Geithner, Steve Rattner, 
and Ron Bloom.
    In addition, the bankruptcy court in the Southern District 
of New York reviewed and approved GM's bankruptcy and 
reorganization. In assessing the new GM's decision to honor the 
top-up agreements, the bankruptcy court found no violation of 
the bankruptcy code or applicable case law, and concluded that, 
as a matter of reality, the purchaser needs a properly 
motivated workforce to enable the new GM to succeed, requiring 
it to enter into satisfactory agreements with UAW, which 
includes arrangements satisfactory to the UAW for UAW retirees.
    In addition, the bankruptcy judge and the district court 
approved the transaction at every step. None of those judges 
seriously questioned the validity of the legal process, which 
was typical for a bankruptcy sale. In fact, the bankruptcy 
judge stated, ``While because of the size of this case and 
interests at stake, GM's Chapter 11 case can hardly be regarded 
as routine. GM's proposed Section 363 sale breaks no new 
ground. This is exactly the type of situation where there is a 
good business reason for immediate sale.''
    In its March 30th, 2011, review of the key events leading 
to the termination of the Delphi hourly and salary plans, GAO 
stated that ``The Auto Task Force did not indicate what should 
be done with the Delphi pensions.''
    We are committed to continue transparency regarding the 
restructuring of General Motors. There is an extensive public 
record available concerning treatment of the pensions of Delphi 
employees and retirees. Congress has held several detailed 
hearings on the subject and there are a number of publicly 
available court filings, bankruptcy court opinions, oversight 
reports, and statements from Delphi and General Motors.
    Treasury has posted online certain key automotive industry 
financing program documents which are available at 
FinancialStability.gov. Additionally, pursuant to a request 
from you and other members of the House Committee on Oversight 
and Government Reform, Treasury has provided you numerous 
documents related to the Delphi pension matter.
    In the end, GM underwent a fair and open bankruptcy. This 
process required deep and painful sacrifices from all 
stakeholders, including workers, retirees, suppliers, dealers, 
creditors, and countless communities that relied on a vibrant 
American auto industry. However, the steps that the 
Administration took not only avoided a catastrophic collapse 
and brought needed stability to the entire auto industry, they 
also kept hundreds of thousands of Americans working and gave 
GM a chance to once again become a viable, competitive American 
business, and they avoided further shocks to our financial 
system and economy at a time when we could least afford it.
    Thank you for your continued attention to this important 
matter. Please feel free to contact me or my staff if we can be 
of further assistance. Sincerely, Timothy G. Massad.
    Mr. Bloom, do you have anything you can add to that? Have 
you learned anything else in an effort to satisfy the 
Chairman's questions?
    Mr. Bloom. No.
    Mr. Cummings. I yield back.
    Mr. Turner. Mr. Bloom, I want to thank you for sitting 
through and answering some of the questions that I provided you 
in writing on June 22nd of last year that you had committed to 
answer in writing that you have never submitted answers to. And 
the reason why I appreciate you sitting here and answering them 
is because I wanted, on television and on the record, both your 
demeanor and your lack of answers to be evident.
    Mr. Bloom, we have had this hearing because you refused, 
for 14 months, to answer SIGTARP's questions. You had to come 
to our hearing because we have subpoena power; they don't. You 
come and you say I will be glad to answer SIGTARP's questions. 
Mr. Bloom, you are not glad to answer anybody's questions. You 
are not glad to answer mine; you are not glad to answer 
anybody's. And you were responsible for affecting billions of 
dollars and thousands of people's lives with our taxpayers' 
dollars.
    People are not only hurt, they are angry, and this is 
exactly, contrary to what President Obama promised us with the 
most open administration, not someone like you sitting in front 
of us, unwilling to answer the questions.
    Now, I want to--Mr. Cummings read the letter. I want to re-
emphasize the paragraph that he read that is on page 2, at the 
bottom, that says, As you may know, the termination of the 
Delphi salary plan and its placement under the trusteeship of 
the PBGC are currently the subject of litigation in Black v. 
Pension Benefit Guarantee Corp.
    This letter is not an answer to the questions that I had 
submitted to you.
    Then we have, and I am going to submit these for the 
record, Secretary Geithner's answers, which were similar 
questions that were posed as posed to you, where we were just 
trying to find out how were these decisions made, who made 
them, so that you can have the appropriate type of oversight 
over taxpayers' dollars, because that is how Government works; 
it is open, it is a democracy. You are not playing with the 
undiscretionary dollars of the President, you are actually 
effectuating and administrating taxpayers' dollars.
    So Geithner had the same questions. I am going to submit 
these for the record. And he says openly in the beginning 
answer that the termination of the Delphi retirement program 
for salary employees and its placement under the PBGC's 
trusteeship are currently the subject of litigation in Black 
versus PBGC. I cannot comment on the specifics of any pending 
litigation.
    And then for the next eight pages, these are the 
Secretary's response. I cannot comment specifically on these 
topics as they are the subject of pending litigation. I cannot 
comment specifically on these topics as they are the subject of 
pending litigation. I cannot comment specifically on these 
topics as they are the subject of pending litigation. And he 
goes on for the next 33, almost 35 questions to answer the same 
way, that he can't answer us.
    So here we sit. People have lost their pensions; billions 
of dollars spent. The Secretary of the Treasury won't answer 
the questions. You won't answer the questions. SIGTARP has many 
of them. We are going to work with SIGTARP on their processes 
of trying to solicit from you substantive and valuable answers 
to the questions.
    This Committee has subpoena power, it has deposition power. 
Mr. Bloom, I assure you, we can continue to revisit this with 
you and your panel members. I would certainly hope that when 
you say you are going to participate and answer SIGTARP's 
questions, that it is certainly going to be more thorough than 
your answers here.
    Now, Mr. Bloom, we are all waiting for a SIGTARP report 
that is going to tell us what happened. GAO can't give it to 
us. This process should not be in this manner because of your 
commitment to the taxpayers. Do we have your commitment that 
you will work to refresh your recollection, that you will try 
to answer fully, to your greatest ability, the questions that 
SIGTARP is going to have for you?
    Mr. Bloom. I will answer the questions that SIGTARP asks me 
to the best of my ability.
    Mr. Turner. Mr. Bloom, with that, we have votes that have 
been called. We are going to adjourn the hearing.
    [Whereupon, at 12:52 p.m., the subcommittee was adjourned.]





                                 
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