    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

           THE DELPHI PENSION BAILOUT: UNEQUAL TREATMENT OF RETIREES

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

                                 FIELD HEARING

                                   before the

                     SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                     of the

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 10, 2013

                                   __________

                               Serial No. 113-34

                                   __________

    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

                                   ----------
                             U.S. GOVERNMENT PRINTING OFFICE

    81-743 PDF                       WASHINGTON : 2013

                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     DARRELL E. ISSA, California, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
    PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of
    JIM JORDAN, Ohio                         Columbia
    JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
    TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
    JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
    JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
    PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
    PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
    SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT,
    TREY GOWDY, South Carolina               Pennsylvania
    BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
    DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
    CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
    ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
    THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
    DOUG COLLINS, Georgia                TONY CARDENAS, California
    MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
    KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
    RON DeSANTIS, Florida

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

                     Subcommittee on Government Operations

                        JOHN L. MICA, Florida, Chairman
    TIM WALBERG, Michigan                GERALD E. CONNOLLY, Virginia
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
    THOMAS MASSIE, Kentucky              MARK POCAN, Wisconsin
    MARK MEADOWS, North Carolina

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on June 10, 2013....................................     1

                                   WITNESSES

    Mr. Bruce Gump, Delphi Salaried Retirees Association
        Oral Statement...............................................     6
        Written Statement............................................     9
    Ms. Mary Miller, Delphi Salaried Retirees Association
        Oral Statement...............................................    14
        Written Statement............................................    16
    Mr. Tom Rose, Delphi Salaried Retirees Association
        Oral Statement...............................................    18
        Written Statement............................................    20
    Mr. Paul Dobosz, Delphi Salaried Retirees Association
        Oral Statement...............................................    32
        Written Statement............................................    34
    Mr. James Sherk, Senior Policy Analyst in Labor Economics, The
      Heritage Foundation
        Oral Statement...............................................    36
        Written Statement............................................    38

                                    APPENDIX

    The Hon. Tim Ryan, a Member of Congress from the State of Ohio,
      Opening Statement..............................................    62
    The Hon. Susan W. Brooks, a Member of Congress from the State of
      Indiana, Opening Statement.....................................    64
    Draft PBGC Settlement Agreement from Karen Morris................    65
    Delphi/PBGC Settlement from John Menke...........................    68
    Stipulation from Ms. Karen Morris................................    70
    PBGC Edits to Delphi and GM Press Releases.......................    73

           THE DELPHI PENSION BAILOUT: UNEQUAL TREATMENT OF RETIREES

                                  ----------

                             Monday, June 10, 2013

                       House of Representatives
                  Subcommittee on Government Operations
                   Committee on Oversight and Government Reform
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 10:00 a.m., in
    Room 150, Sinclair Community College, 444 W. 3rd Street,
    Dayton, Ohio, Hon. John L. Mica [chairman of the subcommittee]
    presiding.
        Present: Representatives Mica and Turner.
        Staff present: John Cuaderes, Deputy Staff Director; Linda
    Good, Chief Clerk; and Tyler Grimm, Professional Staff Member.
        Mr. Mica. Good morning. I would like to call this hearing
    of the Committee on Oversight and Government Reform and the
    Subcommittee on Government Operations to order. We are
    conducting this morning a field hearing of our subcommittee.
    The hearing title today is ``The Delphi Pension Bailout:
    Unequal Treatment of Retirees.''
        I am pleased to be in Dayton today, and we are here at the
    request of Congressman Turner.
        The order of business will be as follows. I will start with
    some opening statements, myself, Mr. Turner, and we will leave
    the record open for other members who want their statements to
    be made part of the record.
        Today we will hear after the opening statements from two
    panels of witnesses, and we will have each of them give their
    testimony, and then we will allow for questions after we have
    completed the members of the panels with their testimony.
        So, first of all, I want to thank Mr. Turner for his
    untiring support on behalf of the Delphi pensioners who were
    treated unfairly and again calling this matter to my attention.
    I took over the chairmanship of the Government Operations
    Subcommittee. I am the senior member of the panel. Some of you
    may have seen lately some of the work Mr. Turner, myself, Mr.
    Issa are involved in, a number of high-profile matters before
    the Congress. And we are the chief investigative panel in
    Congress, so it is our responsibility, whether they are big
    issues or issues like the Delphi pension issue that affects
    thousands of retirees, they all deserve our attention, and that
    is the purpose of this hearing today.
        I will say also that I want to thank Sinclair Community
    College for hosting this. I just met President Johnson. I have
    a remote attachment to the community college. I found out that
    Sinclair has an association with two Florida community
    colleges, one Santa Fe and Gainesville, and then my alma mater,
    the Miami-Dade Community College, which I graduated from. I am
    very proud of the work of community colleges and the
    opportunity they give so many people like myself and others.
        So again, we are pleased to be here, and we will proceed.
    We will start with my opening statement.
        I have sort of a general comment that I usually give at
    these hearings to explain the purpose of government oversight,
    Government Reform panel, explaining to folks that we exist for
    two fundamental purposes.
        First, Americans have a right to know that money Washington
    takes from them is well and justly expended; and second, that
    Americans deserve an efficient and effective government that
    works for them. Our duty and responsibility 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 exactly what
    they got from their government and where their government must
    be held responsible.
        We must work tirelessly and in a bipartisan fashion, and
    also with a partnership with citizen watchdog groups, to
    deliver the facts to the American people and bring reform and
    justice and fairness to the American people and hold the
    Federal bureaucracy accountable.
        So that is the mission of our committee in general. As to
    this specific hearing today, again, this is a continuation of
    the committee's efforts to learn how and why salaried Delphi
    retirees saw their pensions cut as a result of decisions made
    by the Treasury Department and the Pension Benefit Guaranty
    Corporation.
        Again, we would not be here without the untiring commitment
    and dedication of your congressman, who has been sort of like a
    pit bull on this and has not let it go and, again, brought this
    to my attention. I got through reading some of these volumes
    and others of background and immediately said to him that a
    great injustice is done to the people that he represents. So I
    know we will not stop until we pursue the truth, get the facts.
    Some of that has not been uncovered today, and that is the
    purpose of this hearing, and we are not going to stop until
    Delphi retirees get the justice they deserve.
        The facts and circumstances about why we are here bear
    repeating. Delphi, and let me say this again for the record,
    separated, as we know, from GM and became an independent
    company in 1999. At that point in time, a separation agreement
    allowed for unionized Delphi employees to secure a guarantee
    from GM that in the event of a Delphi bankruptcy, GM would top-
    up--that is, make whole--the remainder of pensions not covered
    by the Pension Guaranty Fund.
        In fact, no such agreement was made for the salaried
    employees. As such, when the Delphi plans were terminated in
    2009, the salaried retirees faced immense hardship and lost
    health coverage and other benefits, dramatically disrupting
    their lives and their plans for retirement, while unionized
    employees maintained full pensions and benefits. Today we will
    hear from some of those so affected.
        In addition to the financial hardship, non-unionized Delphi
    retirees feel betrayed by their government. This is a
    government program. This is government money, taxpayer money,
    and it picked winners and losers, and did so in an unjust
    fashion. While the unions were heavily involved in the
    negotiations surrounding the bankruptcies in GM and Delphi, the
    salaried employees did not have a seat at the table and, in
    fact, were left in the dark because of the fact that the
    Administration did not deem them a politically favored class.
        The whole mess could have been avoided were GM to pursue a
    traditional bankruptcy route and not be subject to the
    political whims of the Obama Administration. The traditional
    bankruptcy route would have been better for GM in the long run
    and would have mitigated the risk of a politicized decision-
    making process such as what actually occurred with the Delphi
    salaried retiree pensions.
        The bankruptcy proceedings that occurred were simply a
    legal vehicle for delivering ownership shares to the auto
    companies to the government. In other words, in the words of
    one legal scholar, instead of a traditional bankruptcy, that
    quote was the Obama Administration, working with the
    automakers, patched together a process without precedent, a
    bankruptcy combined with a bailout, incorporating the worst
    elements of both.
        Issues surrounding why the pension fund for Delphi salaried
    retirees was terminated are extraordinarily complex. At the
    request of members of Congress, the Special Inspector General
    for the Troubled Asset Relief Program, we are conducting an
    audit of this issue. This report is said to be released in the
    near future and should provide more insight into decisions made
    by the Treasury Department and the Pension Guaranty Fund
    relating to Delphi.
        So with those comments, let me say that again I strongly
    believe, after reviewing the record, information that is
    provided to me, that a great unfairness exists, that the
    government did, in fact, pick winners and losers unfairly, that
    in this government bailout they used government money. They
    also used government entities in making those decisions, and I
    believe that they did so in an improper fashion.
        One of the things that I don't know is what took place in
    some of those proceedings. I talked to Mr. Turner last night
    and I intend, if necessary, we will subpoena those records and
    we will get the facts of who made what decisions, on what
    basis, and what transpired. And again, I think, based on what I
    have seen, the unfairness was very calculated and that we
    should find some way to make these retirees whole.
        In addition to issuing subpoenas, as I said, if necessary,
    to get those documents that have been requested and that have
    not been provided to the committee or to Congress prior to my
    becoming the chair of the subcommittee.
        The second thing we will do is we will hold as many
    hearings as necessary. This one is here, and we will also hold
    them in Washington until we do get the facts, and I think we
    also need to carefully review the findings of the Inspector
    General's audit report that is coming out.
        So, with those comments, and with that agenda in mind to
    proceed on this issue, I am now pleased to yield to the
    gentleman from Ohio, Mr. Turner.
        Mr. Turner. Thank you. Thank you, Mr. Chairman. I have
    several people, obviously, to thank. First I would like to
    thank Sinclair Community College for hosting us; and secondly,
    I would like to thank the Delphi salaried retirees themselves.
        Mr. Chairman, as you know from all of the materials that
    you have reviewed in preparation for this hearing, were it not
    for the Delphi salaried retirees standing up against the
    injustice which they faced, organizing themselves in a great
    structure and filing suit, pursuing the judicial process
    through this and working as a partner with us, we would not
    know the details that we know today of what occurred in the
    process of the Administration picking winners and losers and
    resulting in the Delphi salaried retirees losing a great
    portion of their retirement benefits.
        Mr. Chairman, as you and I discussed last night, it was my
    intention after hosting this hearing to approach you to ask for
    further follow-on hearings in Washington after this hearing and
    for support, if need be, for issuing subpoenas, since the
    Administration has not been forthcoming.
        I want you all to know in attendance that as a result of
    your great work and the record that the chairman was able to
    review, we did not have to wait until this hearing was over.
    The chairman, when I had dinner with him last night, had
    reviewed the materials and he said, well, I looked at this and
    it looks like we need some follow-on hearings in Washington,
    D.C., and if need be, we should issue subpoenas.
        So if you would all join me in thanking the chairman both
    for being here ----
        [Applause.]
        Mr. Turner. Mr. Chairman, that doesn't mean we don't need
    to have this hearing, but it does mean we greatly appreciate
    the fact that you are dedicated to this issue, the work that
    you have done and the preparation for today, and your
    commitment to addressing the issue of injustice.
        Mr. Chairman, before we proceed, I have several statements
    for the record from other members of Congress that could not be
    here with us today, and I ask for unanimous consent for those
    to be entered into the record.
        Mr. Mica. Without objection, so ordered.
        Mr. Turner. I would also like to point out that we have
    here with us today staff from the offices of Congresswoman
    Susan Brooks and Senator Rob Portman, both of which have been
    excellent partners on this issue.
        And as members of the Government Reform and Oversight
    Committee, as the chairman says, we are dedicated to the issue
    of trying to do investigations to right injustices. As you
    know, our committee is very active on the issues of Benghazi,
    the IRS, and other issues that appear to be scandals where the
    Administration has overstepped what our concept is for justice
    and protection of our own liberties. This injustice, what has
    occurred with the Delphi salaried retirees, is one that needs
    to be remedied.
        Mr. Chairman, the Dayton region was the birthplace of the
    Delphi Corporation. The company was founded as the Dayton
    Engineering Laboratories Company, which evolved through the
    hard work of Ohioans into Delco, which was a division of
    General Motors. General Motors subsequently spun off Delphi
    Corporation, which at one point was the largest parts supplier
    to General Motors. My father worked for General Motors for over
    40 years in this town.
        When Delphi declared bankruptcy in 2005, the company
    decided to close or sell several facilities in Ohio. Here in my
    district, two facilities in Dayton, as well as facilities in
    Kettering, Moraine and Vandalia, were closed. The effect of
    these plant closures have been felt throughout the Dayton
    region as many of our family members, neighbors, and friends
    were Delphi employees. Whole neighborhoods have been affected
    by Delphi's bankruptcy, and it is appropriate that we are right
    here in Dayton to hear directly from the retirees here in this
    community.
        In the wake of the General Motors bailout, the
    Administration picked winners and losers. There is no other way
    to say it. Without transparency, without justification, and in
    my opinion without respect for the men and women who dedicated
    years of service in earning their retirement benefits, the
    treatment of salaried retirees is particularly troubling in
    comparison to the benefits received by some in organized labor
    organizations. In fact, the UAW and the Ohio AFL-CIO have
    written letters in support of restoring benefits for the Delphi
    salaried retirees. They see also the injustice that was done
    here.
        I have worked alongside many members of my community and
    members of Congress to advocate on behalf of both the union and
    non-union labor to ensure that all retirees receive whatever
    benefits they were promised. All of the retirees, regardless of
    labor affiliation or not, worked alongside each other during
    their careers and, Mr. Chairman, there were also other unions
    that did not receive the full benefits and that were penalized
    in this process. They should not be treated any differently in
    their retirement.
        Mr. Chairman, your assistance in bringing to light what
    occurred, what transpired in the Administration picking winners
    and losers is what will assist us in being able to set aside
    this injustice. No administration should be able to take
    taxpayer dollars and pick winners and losers and also at the
    same time refuse to tell the country what they did with the
    money, what their justification and rationale was, and they
    should also not be free from our oversight and review and
    certainly from the legal processes.
        To this date, the Administration has continued to try to
    thwart the lawsuit that has been filed by the Delphi salaried
    retirees, resisting requests for production of documents and
    discovery requests, and they have also resisted congressional
    oversight as we have requested documents.
        It should not take years for us to find out basically two
    questions, what happened and why, so that we can, then, both
    through a legal basis and through a congressional basis, review
    the decisions that were made and the effects on the people that
    are here.
        Mr. Chairman, thank you for being here, for this hearing,
    and thank you for your commitment to what truly is a great
    injustice. Thank you.
        [Applause.]
        Mr. Mica. Well, thank you. Thank you again, Mr. Turner.
        We will now turn to our first panel. We have two panels of
    witnesses.
        First, Mr. Turner asked that members may have seven days to
    submit opening statements for the record. Without objection, so
    ordered.
        And now, as I welcome the witnesses, let me introduce them
    publicly. First, Mr. Bruce Gump is a member of the Delphi
    Salaried Retirees Association. Ms. Mary Miller is a member of
    the Delphi Salaried Retirees Association. Mr. Tom Rose is also
    a member of the Delphi Salaried Retirees Association.
        As you have heard previously, this is an investigative
    panel of Congress, chief investigative panel, so we do,
    pursuant to our committee rules, swear in all of our witnesses.
    So if you will please stand, rise, raise your right hand.
        [Witnesses sworn.]
        Mr. Mica. Let the record reflect that all three witnesses
    answered in the affirmative.
        And we will start with Mr. Gump. I recognize you.
        Let me just tell all of the witnesses, we would like you to
    try to limit your remarks before the subcommittee to five
    minutes. If you have additional data, information, or something
    you would like included in the record, if you would request
    that submission through the chair, we will include it in the
    official testimony and transcript of today's hearing.
        So, Mr. Gump, welcome, and you are recognized.

                           WITNESS STATEMENTS

                        STATEMENT OF BRUCE GUMP

        Mr. Gump. Thank you very much, Chairman Mica and
    Congressman Turner, and thank you for this opportunity.
        As you said, my name is Bruce Gump, and I worked for
    General Motors for more than 22 years, and then Delphi for 10
    years as a senior engineer. I worked hard and I played by the
    rules. Like many others who made General Motors and Delphi able
    to exist by working in thousands of salaried positions, we
    didn't expect to be treated like yesterday's garbage by our
    government.
        I would like to tell you what really happened because of
    the intervention of our government. When the President's Auto
    Task Force was formed, it quickly decided that in order for
    General Motors to be successful, it needed to secure General
    Motors supply of critical parts from bankrupt Delphi. So they
    looked at the roadblocks and worked quickly to eliminate them.
    Up to that point, everyone involved knew that there would be no
    way to resolve the Delphi situation without addressing the
    Pension Benefit Guarantee Corporation's liens and claims that
    had been placed on Delphi's assets. These liens and claims were
    worth billions, and they ensured that Delphi and GM could not
    walk away from their long-standing pension obligations.
        But then the Auto Task Force was formed and took over the
    job of facilitating a resolution to the pension issues. They
    killed any hope we had of the PBGC looking out for our
    interests. The Auto Task Force has testified that the Treasury
    was ``trying to facilitate an agreement where the salaried plan
    would get terminated and taken over by the PBGC.'' And not
    surprisingly, that is exactly what happened. The shame of it is
    that the termination was entirely unnecessary. The plan was
    well funded, and there were alternate sponsors available.
        Just a few weeks prior to the termination of the salaried
    pension plan, the plan's actuary completed and AFTAP analysis
    that determined the plan was about 86 percent funded, better
    than average at that time. The bottom line is that our plan and
    the liens and claims that protected it were simply in the way
    of the President's Auto Task Force. They were in a hurry, so
    they found a way to just kill the plan as quickly and
    efficiently as possible.
        While there is ample evidence in the form of emails and
    testimony to show how deeply responsible a select few in
    Treasury were for our situation, one need look no further than
    Vice President Biden's own words. In an interview with a
    Youngstown, Ohio television reporter on the subject he said,
    ``We were able to protect the hourly workers. Some salaried
    workers got hurt, particularly the younger ones.'' The ``we''
    in that sentence refers to the Administration, of which he is a
    member, and confirms that the Auto Task Force under the U.S.
    Treasury was deeply involved in the decision to protect the
    hourly workers but not the salaried workers.
        Also, the PBGC and Treasury have worked tirelessly to keep
    the records of their actions secret. If they were really proud
    and nothing inappropriate was done, they wouldn't have to work
    so hard to keep secrets.
        There have been numerous roadblocks thrown up to stop our
    attempts to gain understanding and justice. PBGC's so-called
    administrative record was found to be incomplete, to say it
    kindly. PBGC refused to comply with discovery for nearly two
    years, and finally did after the federal court issued five
    additional orders. PBGC was ordered to fully comply with our
    discovery demands within 90 days, but they took all 90 to
    supply the very first documents, and then continued only in
    dribs and drabs. Thirty thousand documents are still missing.
        PBGC offered misleading testimony while under oath about
    providing the administrative record. Seventy thousand documents
    not included in the original record have now been obtained, and
    the PBGC simply has no credibility.
        PBGC has refused to supply non-personally identifiable
    Census information, as required in discovery. Congressional
    attempts to gain access to documents have been met with a
    shameful disregard and a threat to claim executive privilege
    over a pension issue. That is, to me, a tacit admission of
    guilt.
        Treasury tried to stymie the SIGTARP investigation and, in
    fact, it took a special hearing to gain access to the
    principals in the President's Auto Task Force. The
    Administration and the PBGC have misrepresented their actions
    and misled this committee for nearly four years now. It is time
    to bring this to an end and do what should have been done to
    begin with and restore the full pensions that we earned over
    decades of service.
        Finally, there is the economic impact of the decisions that
    left the salaried retirees without their full pensions and no
    health care insurance. According to an extended Youngstown
    State University study, the cost to Ohio in terms of economic
    activity was nearly half a billion dollars per year, and nearly
    15,000 additional jobs were lost. Much of that can be recovered
    by restoring the pensions of the retirees.
        In summary, what really happened is very different from
    what the PBGC and Treasury have said. We are still trying to
    learn more, and we won't ever give up. But all we really want
    is what we earned. Justice was provided to our co-workers. Real
    people are suffering because of this illegal and unethical
    treatment by our government. At the end of the day, the
    decisions to terminate our plan were made, vetted, encouraged
    and determined by the President's Auto Task Force. They played
    God, and they played with people's lives, and they purposely
    hurt tens of thousands of American citizens in the process.
        Please help us force transparency into this issue by
    pursuing the records from Treasury and PBGC. Hold them
    accountable for their actions, good or bad. Show that American
    citizens deserve to be treated equally regardless of who they
    associate with or what groups or clubs they belong to. Help the
    Administration to live up to its promises of transparency and
    pension protection, and help us gain the pensions we earned,
    and help the economy to recover more quickly. Thank you.
        [Prepared statement of Mr. Gump follows:]

        [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]

        Mr. Mica. Thank you for your testimony, and now we will
    turn and recognize Mary Miller.
        Welcome, and you are recognized.

                        STATEMENT OF MARY MILLER

        Ms. Miller. Thank you, Congressman, for inviting me to
    testify today. My name is Mary Miller. In 1999, General Motors
    decided to spin off their component parts business. This
    spinoff became Delphi Corporation. Delphi Corporation, the
    largest automotive parts supplier in the world, was integral to
    GMs success. Most Delphi retirees worked two-thirds or more of
    their careers in service to GM, and only a small part of their
    careers for Delphi. I worked 22 years for General Motors and
    only nine for Delphi. I was forced to retire in 2008 when
    Delphi decided to permanently close its brake operations, where
    I worked as an HR manager.
        All GMs salaried retirees are receiving their full
    pensions. All GM hourly retirees are receiving their full
    pensions. And all Delphi hourly retirees of major unions are
    receiving their full pensions. So what brings us together this
    morning if all of these retirees are receiving their full
    pensions? We are here today because one key group who worked
    side by side with all these other people is not receiving their
    full pensions.
        The Delphi salaried retirees' pensions were decimated in
    2009 during the Auto Task Force rush to settle GMs bankruptcy.
    The Delphi salaried retirees lost up to 70 percent, that is 70
    percent, of our hard-earned pensions. This loss has been
    devastating for the salaried retirees and their families.
    Congressmen, this has caused home foreclosures, bankruptcies,
    family breakups, suicides, serious stress-related illnesses,
    and an ongoing struggle just to pay routine bills.
        How can it be legal for the government to pick winners and
    losers amongst its own citizens? For me and many of my fellow
    retirees, the burden of trying to figure out how to make ends
    meet gets heavier every day. We are real people. We suffer real
    hardships. And all the while, many of our neighbors with whom
    we worked side by side are receiving their full pensions.
        The Delphi hourly retirees of major unions are receiving
    every pension dollar they earned. The American taxpayers are
    paying for top-ups for all of the Delphi hourly retirees of
    major unions, top-ups that were won during the GM bankruptcy by
    politically connected individuals.
        The PBGC was created to help save retirement plans, and
    really, that is what I believe it tries to do. Just look at its
    efforts in the recent cases of American Airlines and Tower
    Automotive. What was different in our case? What was unique
    about our salaried pensions that allowed the PBGC to do nothing
    to defend and protect our pensions, pensions that were well
    funded and very savable?
        We have heard over and over how proud the Administration is
    of the Auto Task Force's efforts to save automotive jobs in
    America. We have heard time after time how everything the Auto
    Task Force, the Treasury, and the PBGC did to help preserve
    those jobs was done normally and within the law. So, if they
    are so proud of everything they have done, then why are they so
    secretive about giving us the records we have been asking for
    since 2010?
        They have thwarted us at every turn, denying our request
    for documents, not complying with our subpoena for their
    records, and even going to a different court to quash the
    subpoena. It really makes you eager to know what they are so
    desperate to hide that a White House attorney indicated they
    would use executive privilege to keep from revealing their
    records, if subpoenaed.
        Congressmen, this is from the same administration that
    promised, ``Transparency and the rule of law will be the
    touchstones of his presidency.''
        The PBGC has stonewalled every request we have made. The
    Treasury has been downright non-participative regarding every
    record we have asked them to provide. The House Ways and Means
    Committee asked for Treasury records last fall; none have been
    provided to date. We are asking the House Oversight and
    Government Reform Committee to obtain the Treasury's records so
    the truth about our case can finally be uncovered.
        While we will never give up our fight, we do need your help
    to win. We need our congressional representatives to be our
    advocates, to be on our side, to use your power, given to make
    our government truly one of checks and balances, to demand this
    blatant wrong be righted immediately--not later this year, not
    next year, not sometime in the future, but now. This fight has
    been going on for almost four years. It is time to end this
    disparate treatment and settle this shameful wrong while most
    of our retirees are still alive. Some are not.
        This can be done today with no cost to the taxpayers. The
    funds the PBGC received for our salaried pensions are more than
    enough to make our pensions whole. Please join us in our brave
    fight to win back what is rightfully ours. Don't let any more
    time slip by without pressing our case forward to resolve this
    shameful, shameful violation of ERISA law. Help us move from
    being victims to victors. Reassure us and millions of others
    that this is still America, the land of the free and the home
    of the brave. We need your help. Thank you.
        [Prepared statement of Ms. Miller follows:]

        [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]

        Mr. Mica. Thank you.
        We will turn now to Mr. Tom Rose.
        Mr. Rose, you are recognized.

                         STATEMENT OF TOM ROSE

        Mr. Rose. Thank you, Chairman Mica and Congressman Turner,
    for holding this important hearing. Delphi salaried retirees
    continue to seek the truth about our pension termination, a
    termination that was absolutely unnecessary and, we believe,
    illegal.
        Yes, we believe the PBGC broke the law.
        My name is Tom Rose. After college and two years of
    military service, including a year in Vietnam, my automotive
    career began with GM and continued for 30 years. I spent an
    additional nine years with Delphi. I certainly felt that I
    contributed a small piece to the powerful GM that had to be
    bailed out in 2009. I also expected to receive my health care
    and pension that was earned and promised as part of my
    employment.
        After the dust of the frantic 44-day GM bankruptcy had
    settled, I found myself with zero healthcare and, in my case, a
    40 percent pension reduction. My carefully planned retirement
    was blown apart at a point in my life when recovery time and
    opportunities are limited. I look back and wonder what I did
    wrong.
        I now realize that I first trusted GM/Delphi, and then I
    trusted the Auto Task Force that guided the bailout under the
    direction of Treasury. In the end, this trust was misplaced as
    myself and 20,000 other Delphi salaried retirees were
    abandoned.
        We are glad that the union retirees have their full
    healthcare and pensions; they earned it, they deserve it, but
    so do we. They received their full pensions, not from obsolete
    union contracts, as alleged, but were topped up per direction
    of the Auto Task Force. As Mr. Gump stated, from Vice President
    Biden, ``We were able to protect the hourly workers. Some
    salaried workers got hurt, particularly the younger ones.''
        Speaking for myself, I simply failed to understand how two
    groups of employees working for the same company, in the
    identical situation, could be treated so distinctly different
    by our own government. The preferential treatment given the
    union is blatantly obvious. Were salaried workers wrong to
    expect fair and equitable treatment from our own government?
        Matthew Feldman, a member of the Auto Task Force, stated
    that, ``We were trying to facilitate an agreement where the
    salaried pension plan would get terminated and taken over by
    the PBGC and GM would assume liability for the hourly plans.''
    They were certainly successful in terminating our pension in
    spite of the fact that our plan was considered to be fully
    funded by third-party actuaries. They were also successful in
    having the taxpayers pick up the tab to fully fund hourly
    pensions. This reinforces my belief that Treasury and the Auto
    Task Force were calling the shots, and the PBGC was simply a
    pawn in our pension termination.
        The PBGC's role is to, quote, ``protect the retirement
    income of pension plan beneficiaries.'' Let me recap how they
    have protected us.
        The PBGC's administrative record, which should clarify what
    happened, only serves to interject confusion. Despite the PBGC
    acknowledging almost daily coordination with the Auto Task
    Force, the administrative record was almost entirely stripped
    of references to this coordination.
        FOIA, Freedom of Information Act, requests to obtain
    information were answered by providing hundreds of pages of
    redacted material or simply withholding information. Again,
    this obscured the details of PBGC's actions.
        DSRA's lawsuit was brought in September 2009, and after
    numerous objections, Judge Tarnow of the U.S. District Court
    for the Eastern District of Michigan ordered discovery in 2010.
    The PBGC did not produce a single document until June 2012, and
    only then after the court issued another five orders explicitly
    stating our right to discovery. The last of these orders was
    issued in March 2012, with a requirement to be completed within
    90 days. After 15 months, the PBGC has still not fully
    complied.
        Treasury has never participated in discovery. Why not?
    Isn't the current administration the alleged most open and
    transparent ever? I don't mean to be critical. After all, the
    DSRA consists of both Republicans and Democrats. But the huge
    disconnect between words and actions is shameful.
        As you know, the PBGC has also stonewalled numerous
    congressional requests for information.
        Recently, the PBGC announced that final benefit
    determination for our pensions could not occur until 2015, thus
    forcing continued financial uncertainty on salaried retirees.
        So I ask, is this how the PBGC protects us? I could go on
    but, in summary, justice delayed is justice denied.
        Fortunately, there is some good news. A solution exists for
    the salaried pension plan. In recent meetings with Treasury and
    PBGC, a proposal has been presented that fully funds the
    salaried pension plan, both retroactively and going forward.
    This proposal can be implemented immediately and with zero
    taxpayer money required. This would also fulfill the political
    solution as suggested by Judge Tarnow.
        Congressmen, today we are asking for your help in requiring
    Treasury and PBGC to end this harm that was needlessly
    inflicted upon this group of American citizens. After almost
    four years, one Senate hearing, six House hearings, continuous
    PBGC delays and no Treasury participation, this has gone on
    long enough. A solution exists, and the time to implement this
    is now. Thank you.
        [Prepared statement of Mr. Rose follows:]

        [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]

        Mr. Mica. Well, I want to thank all three of our witnesses,
    and I will start with some questions.
        First, tell me the Delphi Salaried Retirees Association,
    Mr. Gump, Mr. Rose, Ms. Miller, what is its genesis, and how
    long has it been in existence?
        Mr. Gump. The DSRA was formed at the time when Delphi was
    being pushed into bankruptcy. In the course of just two weeks,
    we went from being totally nonexistent to being fully formed,
    incorporated as a nonprofit, represented in court, with over
    2,000 members.
        Mr. Mica. Did you represent the salaried retirees in any of
    the discussions before TARP, the Auto Task Force, the Pension
    Guaranty Fund?
        Mr. Gump. No. The only representation that we had was in
    the bankruptcy court, and that was really only over the health
    care issue.
        Mr. Mica. Okay.
        Mr. Gump. I should say that we were actually denied the
    opportunity to be represented during all the pension issues.
    Those meetings were held behind closed doors.
        Mr. Mica. So no one represented your particular group, the
    salaried retirees, in these discussions? No formal group
    represented?
        Mr. Gump. That is correct.
        Mr. Mica. Were there any public hearings? I don't know.
        Mr. Gump. No.
        Mr. Mica. Everything was done behind closed doors?
        Mr. Gump. As far as the decisions to terminate the
    pensions, yes. All of that was made behind closed doors.
        Mr. Mica. Okay. Mr. Rose, you just mentioned a solution,
    and I think, Ms. Miller, you spoke about it. Ms. Miller, you
    said that there was enough funds that had been paid into the
    Pension Guaranty Fund to adequately compensate the affected
    salaried employees whose pensions were denied. How did you come
    up with that?
        Ms. Miller. That is correct. Our attorneys were in the
    meeting with the Treasury and the PBGC recently and submitted a
    proposal ----
        Mr. Mica. That is what Mr. Rose and you were talking about?
        Ms. Miller. Yes, that is what he was talking about. The
    proposal identifies ----
        Mr. Mica. So you could isolate the funds. Of course, you
    have the names and records. NSA probably has their phone
    numbers, too.
        [Laughter.]
        Ms. Miller. Yes, it was factually backed up. It wasn't just
    like a desire.
        Mr. Mica. Right. So you have approximately 20,000 salaried
    employees that were affected. Do you know the exact number or
    approximate?
        Mr. Rose. I believe it is about 20,300.
        Mr. Mica. Oh, 20,300?
        Mr. Rose. Yes.
        Mr. Mica. It was interesting in reading some of the
    documentation, most of them had worked for GM before and had
    pretty long histories of working with GM before working with
    Delphi. I am sure that is also documentable, Ms. Miller.
        Ms. Miller. Right. I mean, Delphi wasn't in existence until
    1999. So anyone who would be eligible to retire had to have had
    a long career with GM before we were spun off into Delphi.
        Mr. Mica. Actually, they got shafted even though they had
    been part of the principal parent company.
        Now, let's go back to the Pension Guaranty Fund issue.
    There was a report, the Towers Watson report. When was that
    issued? Was that issued before they made their decision or
    after they made their decision?
        Mr. Gump. Before they made their decision, and only just a
    couple of weeks before, okay? So it was a very ----
        Mr. Mica. And is that the report that also said it was 86
    percent funded?
        Mr. Gump. That is correct.
        Mr. Mica. And I think historically, many plans that were
    terminated performed far worse than that. In fact, that was a
    pretty high funding and performance level?
        Mr. Gump. It was better than the average of the top 100
    largest plans in America at the time. That average was about 84
    percent. So the Delphi plan was actually well funded. And
    remember, we were at the very trough, the very bottom of a
    major recession. So almost every plan in America was
    underfunded at the time.
        Mr. Mica. So everyone believes, then, it was just an
    arbitrary decision that was either--we don't know, but forced
    on the Pension Guaranty Fund in this matter.
        Mr. Rose. The average funding level of the top 100 plans
    was 84 percent, as Bruce suggested, and none of those top 100
    plans were terminated, yet ours was terminated at 86 percent.
        Mr. Mica. So, basically a political decision, and just
    excluding a class which happened to be the salaried workers.
        Mr. Gump. Chairman Mica, one of the concerns we have and
    the reason that we need the Census information is to understand
    how it is that PBGC determined that our plan was only 46
    percent funded. Somehow they modified the liabilities of the
    plan to make it appear as though it was much worse funded than
    it really was.
        Mr. Mica. Well, I was also appalled by the record of
    failure to respond both to our committee, to the courts, and
    the courts had some pretty specific directives--I think you
    cited those--in which they still haven't complied, not just our
    committee. Mr. Turner had confirmed that Ways and Means had
    also, because they oversee Treasury, had been denied the
    information.
        And the Freedom of Information requests, were those made by
    your group again, the Delphi Salaried Retirees?
        Mr. Rose. Yes.
        Mr. Mica. Okay. And most of what you got, you said, was
    redacted or not germane?
        Mr. Rose. Yes, heavily redacted or simply not supplied.
    Some emails were ``Dear So-and-So,'' blacked out completely,
    ``sincerely.''
        [Laughter.]
        Mr. Mica. Well, unfortunately, that seems to be what we
    have run into. I am the most senior member of the panel. My
    seniority is greater than even Mr. Issa. And so I have seen a
    lot in my 21 years. I have never seen an era in which they have
    denied at least the rightful committees of Congress
    information. Our committee, as you know, we had to hold the
    Attorney General in contempt, and we still don't have the
    rightful information we are entitled to. We are now still in
    court even after he was held in contempt to get that.
        I talked to Mr. Turner last night and staff, and we are
    going to go back, I will go back and have discussions with Mr.
    Issa. If necessary, we will see if the subcommittee can issue
    subpoenas for the information.
        The other thing, too, is we have held so far Mr. Holder in
    contempt. It may be necessary to go after additional folks in
    different agencies. We have TARP. We have the Auto Task Force,
    the Pension Guaranty Fund, Treasury, maybe even the United Auto
    Workers. Does anyone know if any of the other union groups were
    in communication on a resolution of their part of the pension
    settlement?
        Mr. Gump. UAW was, in fact, part of the discussions that
    happened in Poughkeepsie, New York during the auto bailout. The
    negotiations that happened ----
        Mr. Mica. You were not invited to Poughkeepsie.
        Mr. Gump. We were not invited.
        Mr. Mica. Who else was in Poughkeepsie? There were two
    other smaller unions?
        Mr. Gump. Treasury, PBGC, General Motors, Delphi, and UAW
    are all that I am aware of. The IUE and the Steelworkers had
    separate negotiations that resulted in the top-ups. It should
    be clear, by the way, I noted in ----
        Mr. Mica. They were separate from Poughkeepsie?
        Mr. Gump. Yes, separate from the Poughkeepsie meeting.
        But I want to make clear, too, that the new General Motors
    was under no obligation to those old contracts. They were held
    by the bankruptcy court to not be liable to those old
    contracts. Those old contracts still do exist, but they are
    with old GM, not new GM. And yet it is new GM that is topping
    up the pensions. Supposedly, new GM chose to pay a billion
    dollars to top-up the pensions for the IUE and the
    Steelworkers. So those negotiations happened separately, not as
    a part of the bankruptcy process, and certainly not as a result
    of contracts.
        Mr. Mica. It is estimated it is going to take--well, they
    are going to spend about $20 billion--that will be at a loss to
    the government to correct the pension situation. How much
    additional would it cost to cover the salaried employees?
        Mr. Gump. Nothing. It will cost the government nothing. The
    money ----
        Mr. Mica. You base that on the money that has been paid
    into the fund.
        Mr. Gump. That is correct. There was a waterfall fund. What
    happened was that in order to get the agreement of the PBGC to
    abandon the only tool that ERISA really allows them, and that
    is to file liens and claims against the assets of the company,
    they abandoned those in exchange for stock in new Delphi. Now,
    the company didn't even exist when they made that deal, but
    over time it did actually work out, and Delphi was able to
    purchase back that stock for about three times the original
    value. So that was the waterfall fund.
        However, those liens and claims were sort of like the key
    to the car. You might buy a car for $20, but you can't drive it
    without the key. So what is the value of the key? That was what
    the liens and claims were. Delphi's foreign assets that the
    claims were against were worth between $3 billion and $4
    billion at the time, and they couldn't dispose of them until
    those liens and claims were disposed of.
        So Treasury was in a hurry. There was no time to get this
    done in any other way, so they simply terminated the plan and
    got PBGC to accept stock in a nonexistent company at the moment
    in order to get them to agree to abandon their claims.
        Mr. Mica. How much have you had to spend so far, Mr. Rose,
    in illegal pursuit?
        Mr. Rose. Delphi salaried retirees, after paying increased
    health care costs from reduced pension dollars, have
    contributed $3.8 million to our counsel, who has done an
    excellent job for us. In addition, the government has spent $2
    million defending the lawsuit of our own taxpayer money. All of
    this for something that didn't need to happen.
        Mr. Gump. Just to clarify, if you don't mind, that $2
    million is how much they paid an outside law firm. Their own
    internal expenses, we don't know what they are.
        Mr. Mica. On top of that.
        Mr. Gump. Yes.
        Mr. Mica. Well, again, this is very frustrating. I can
    imagine your frustration, being ignored. Sometimes in Congress
    we do have a change in various leadership committees and
    panels, but I have taken this on and will pursue it, and I
    think we will look at any avenue we can to work with your group
    and try to, again, ascertain the facts.
        It is just deplorable that these agencies of government
    would be so non-responsive both to Congress and the courts.
    Again, this is a huge amount of taxpayer money. I think maybe
    Ms. Miller testified that everybody is boasting about the
    success of the bailout, and everyone has forgotten the 20,000-
    plus salaried retirees that got left behind in this whole
    process and now are ignored even in simple discovery of the
    facts.
        So we will crank it up and pursue it. Are there any other
    suggestions as to how we might--I have likely suspects--how we
    might get ----
        [Laughter.]
        Mr. Mica.--information from others, any other entities or
    agencies or individuals that might be good to haul before us?
        Mr. Gump. Certainly, Mr. Chairman, and we would be happy to
    work with you outside of this to identify those people.
        Mr. Mica. Okay. Well, again, thank you for your testimony.
        Let me yield now to Mr. Turner.
        Mr. Turner. Mr. Chairman, thank you so much. Thank you for
    your dedication to the details of this issue and for your
    understanding about the personal impacts and the fact that our
    government shouldn't work this way, that this is an injustice
    that no one should have to withstand.
        Mr. Rose, you indicated that the government had spent $2
    million on outside counsel in defending the lawsuit. I want to
    correct that a little bit. They have been spending $2 million
    on outside counsel to stop you from getting documents for you
    to go forward with the agreement.
        [Laughter.]
        Mr. Turner. No one has been defending a lawsuit because the
    lawsuit is not moving because they won't even come forward.
        You mentioned the redacted emails.
        With your approval, Mr. Chairman, I would like to enter
    into the record these examples that I have. The first one says,
    ``Here is Skadden's latest draft of the agreement,'' and then
    it says six lines removed, deleted. So we don't get anything on
    the agreement.
        The next one, draft PBGC settlement agreement, seven lines
    removed, regards, Alison. This is one that has no text of the
    email.
        The next one, 20 pages of the email are deleted.
        The next one, government attachment, deleted.
        This one, I like this one because it says, ``Ron, a few
    items from our phone conversation this morning about the
    proposed Delphi PBGC settlement agreement.'' And then it says
    10 lines removed. Then it says, ``Please call me if you have
    any questions, John.''
        [Laughter.]
        Mr. Turner. We have a few questions and we will be calling,
    John.
        [Laughter.]
        Mr. Turner. And the next one, deleted, 34 pages. After
    this, the next one, deleted 17 pages. The next one, deleted
    four pages. All of these show that there is no substance to
    these emails.
        Mr. Mica. Will the gentleman yield?
        Mr. Turner. Yes.
        Mr. Mica. So some of these individuals might have
    information. Have any of them been hauled before our committee?
        Mr. Turner. A few of them have come before when they
    refused to testify before SIGTARP, the independent review for
    the expenditures of TARP. We held a hearing solely on the
    question of why aren't you answering the questions. We were not
    able to go farther into the substance of what their answers
    would be.
        Mr. Mica. Well, I would like to sort through them. The ones
    who haven't had the privilege or opportunity, maybe we can haul
    them in. Thank you. I yield back.
        [Laughter.]
        Mr. Turner. Thank you, Mr. Chairman.
        Mr. Mica. Without objection, these will be made part of the
    record.
        Mr. Turner. Thank you so much.
        Mr. Chairman, as you described with respect to this
    process, when Delphi and General Motors went into bankruptcy,
    under the umbrella of TARP we had banks, we had bondholders, we
    had the PBGC, we had General Motors, we had unions and general
    creditors. What usually happens in a bankruptcy is that each of
    those parties are independent. They are brought before the
    court, and the court expects that each of them are going to
    have the rights of the people that they represent.
        But in this instance, because TARP was put in place, the
    government had become the banks. The government had become the
    bondholders. The government was PBGC. The government acquired
    General Motors due to political connections. There was a close
    relationship between the Administration and the unions, and
    other creditors were pushed aside, and certainly the Delphi
    salaried retirees were pushed aside.
        Mr. Rose, I would like to ask you a question about that.
    Federal law established that the PBGC is supposed to be an
    independent agency. But when it came to the General Motors
    bailout, the PBGC really stopped being an independent agency,
    and I believe you have some comments and would bolster that.
    But also, Vince Snowbarger, who came before us, talked
    initially about that all of these parties were acting
    independently. None of us believe that. He is now retired, and
    I believe he has appeared in your litigation. Is there any
    additional information we have about that so-called
    independence between all those parties that basically became
    Timothy Geithner?
        Mr. Rose. Well, contrary to Mr. Snowbarger's testimony
    before the prior hearing here in Dayton, since then he has
    retired and has been deposed by our attorneys, and it was
    stated there was no conflict in the PBGCs role, and actually I
    think we found out just the opposite. Certainly Tim Geithner,
    for example, had a triple role in this entire termination. It
    is obviously Treasury, the Secretary of the Treasury, chief
    lender to GM, certainly the head of the Auto Task Force that
    was driving this, and he is also on the PBGC board. So there
    was a tremendous conflict of interest.
        Mr. Turner. Mr. Rose, part of the reason why everyone is
    upset about this is because this should be a relatively easy
    review process. We are dealing with issues of math and law.
    What does the math say, and what laws apply. Unfortunately, the
    answers that we frequently get throughout this process are
    subjective, what people think the numbers are or what they
    think should have been done, not issues of what is the math and
    what is the law.
        Our effort is, of course, to get the information and data,
    apply math and apply the law and determine what occurred and
    whether or not your rights were violated, as I believe they
    were, and where the monies were and how they should be put
    back.
        You mentioned delays in final benefit determination. What
    does that mean for you, and in a practical sense does it mean
    that you have to continue to receive your pension under its
    current reduction? As you go to 2015, we are still dealing with
    math and law, but they are not even giving you answers for the
    future, right?
        Mr. Rose. That is correct. What they have given us right
    now is a preliminary pension, okay? Well, it is very
    preliminary, and they have to say they have to do the
    calculations to perform a final determination. We are all
    living with financial hardships. In many cases, salaried
    retirees are living below Federal poverty level guidelines. And
    now, it will be until after 2015, six years after termination,
    that we are forced to live under continued financial
    uncertainty.
        Mr. Turner. So one of the issues really at the bottom of
    it, it is not just that they won't tell us the math and the law
    for how they decided to terminate the pension, take over the
    pension and give you the numbers of your reduction, they still
    aren't even telling you the math and the law for what the
    future is.
        Mr. Rose. That is correct.
        Mr. Turner. And that is obviously part of what we need to
    do, and I know that your lawyers are pursuing.
        Ms. Miller, you talked passionately about the difficult
    struggles that retirees have had. Could you tell us a little
    about your own story?
        Ms. Miller. Well, I think the biggest thing for me has been
    the loss of health care. When I retired from Delphi, I expected
    at that time to pay about $200 a month for myself and my
    children that are still in school, in college. And now, to
    cover myself and my boys, it is $2,300 a month. I can't do that
    on my reduced pension. I mean, it is impossible. And to not
    have health care after all these years of being able to provide
    that for my family really makes me feel that I have let them
    down and gives me great worry about what might happen to them.
    So that is with me every day.
        Mr. Turner. Mr. Gump, the chairman was saying that when we
    had these emails that were released to the committee but were
    redacted, so they are worthless on their face, the committee
    had called forward these individuals when they had refused to
    answer questions to SIGTARP, the special Inspector General, and
    our focus then was to get them to comply with the answers. But
    they still haven't answered you.
        So what tools do you think are needed to ensure that the
    Administration responds completely and effectively? Does the
    law need to be changed, or is it just that the law needs to be
    enforced?
        Mr. Gump. I think the law needs to be enforced. The laws
    are in place to prevent this and to have the ability to know
    what happened and why. The issue here is that these people
    acted behind closed doors in a very rapid manner and they cut
    some corners, and they knew that they did it. They even have
    some conversations about that. But they don't want us to know
    that they knew that they were doing it because that would call
    into question how they acted at all.
        PBGC tried to follow a very rapid termination plan and a
    plan that wasn't necessary to be terminated at all. So they had
    to manipulate the numbers. They won't let us know how they did
    that. They have had to follow a certain process, an involuntary
    termination process that required them to meet certain criteria
    that were not met. So they had to manipulate the plan to make
    it appear as though it met that criteria.
        So there are a number of pieces here that should be
    available to us, and the tools to get to them do exist. We
    simply need to enforce those rules. Issuing a subpoena to force
    them to give up the information would be one that we would be
    very grateful for. We have tried to issue our own subpoena, and
    Treasury simply moved to quash it. So assistance to gain access
    to those records, which do exist, would be very helpful.
        Mr. Turner. Mr. Chairman, when we called the members of the
    Auto Task Force forward to the Government Reform Subcommittee
    to ask them why they were not answering SIGTARP, the
    independent general counsel, they said, well, we are not in the
    government anymore, we shouldn't have to answer any questions
    about what we did when we were in government. Well, that is not
    how our government works, and I appreciate your commitment to
    that.
        And with that, I yield back.
        Mr. Mica. Well, thank you.
        Again, I want to just ask one question on the amount of
    money that is estimated to make this whole. Is there an
    estimate, Ms. Miller?
        Ms. Miller. I am going to defer.
        Mr. Mica. You mentioned the Pension Guaranty Fund that
    these folks had paid into, and with 20,000 folks, most of them
    20 years or more paying into it before it was terminated, that
    would have been a sizable contribution.
        Mr. Gump. Certainly, there are estimates of that. The AFTAP
    analysis that was done prior gives us some background. We need
    to have Census information in order to have it fully accurate.
    But I want you to consider the fact that PBGC has agreed that
    the assets of the plan at the time of termination were about
    $2.3 billion, and based on their own published return-on-
    investment numbers, those assets should be something over $4
    billion now. So there is more than enough money in the plan
    already to fully fund it, especially when you add into it the
    income from the waterfall and other sources that were there.
        Mr. Mica. Well, again, I think Mr. Turner pointed out that
    all these actions were government agencies, and I am stunned to
    find out that you were totally excluded--that is my
    understanding--from any of the negotiations in Poughkeepsie
    with the Auto Task Force, TARP, Treasury. You never had an
    opportunity to participate, while some of the others did, in
    fact, and also did benefit. And now the fact that we are
    finding it almost impossible through Congress or congressional
    efforts to date, and the courts to date, to obtain information
    on how all this came down.
        As I said, we will see about our ability to issue subpoenas
    and consult with Mr. Issa when we return, and then I think I
    would like to also call in some of these folks from some of the
    information that you have gotten that has been redacted and
    that I have seen here submitted and see if we can't get them to
    tell us the rest of the story. We will haul in those who have
    not been hauled in and go back to the agencies.
        Sometimes in Washington, I have found that you can be very
    powerful and you can be very well placed, you can be very
    financially well off, but you just have to be a persistent
    bastard to get things done.
        [Laughter.]
        Mr. Turner. I don't know if I should be offended or not.
        [Applause.]
        Mr. Mica. Well, the worst combination for the offenders in
    this case is they have two very persistent bastards.
        [Applause.]
        Mr. Mica. Well, we made a little light here at the end, but
    this is a very serious matter, and it boils down to the basic
    fairness of government and how it treats people, and also the
    use of taxpayer money. I did not vote for TARP. I did not vote
    for the bailout. I come from a business background. I just have
    not followed that course. I did arrange for, as chairman of
    Aviation, to assist the airlines with a loan guarantee fund, of
    which every penny was paid back, and we made about a third of a
    billion dollars after 9/11, and actually consulted because
    there were several TARP proposals that were absolutely
    horrible, but I couldn't support it in the end.
        Nonetheless, this has transpired, and people's lives have
    been dramatically unfairly impacted, and the government was
    responsible for all of this, using government funds and
    government agencies to make the decisions that have led to this
    unfairness.
        So I think what we will do is thank you for testifying,
    coming before the committee, keeping this open and pursuing it,
    which your association has done on behalf of the salaried
    employees.
        We will excuse you at this time. We may in the next seven
    days have additional questions we will submit to you, and they
    will be made part of the record. So thank you again for your
    participation.
        I am going to call up the second panel, and we will excuse,
    again, Mr. Gump, Ms. Miller, and Mr. Rose. We will ask staff to
    go ahead.
        I am not going to recess. I want to go ahead and pursue the
    witnesses. So we will ask them to come up. If people have to
    excuse themselves briefly, do that.
        We have two additional witnesses, and let me introduce them
    as they come up and take their seats. One is Mr. Paul Dobosz,
    as a member of the Delphi Salaried Retirees Association. The
    second witness is Mr. James Sherk, and he is a senior policy
    analyst in labor economics at the Heritage Foundation.
        As I mentioned before to our previous witnesses, this is a
    chief investigative panel in the Congress, our committee and
    the subcommittee. We will swear you in in just a minute. I also
    advise you that we would like you to keep your remarks to
    approximately five minutes, and through request of the chair,
    glad to submit additional information or data, any requests you
    have through the chair into the official record.
        So with that, we do have Mr. Dobosz and Mr. Sherk. Welcome.
    I will ask you, pursuant to committee rules, to stand and be
    sworn in. Raise your right hand.
        [Witnesses sworn.]
        Mr. Mica. The record will reflect that the witnesses
    answered in the affirmative.
        I welcome you again, pleased to have you with us this
    morning.
        We will recognize Mr. Dobosz first. I hope I pronounced it
    right. Close?
        Mr. Dobosz. Not quite, but it will do.
        Mr. Mica. Okay. Tell me.
        Mr. Dobosz. It is actually a Polish name. It is pronounced
    Dobosz.
        Mr. Mica. Dobosz, okay.
        Mr. Dobosz. But no one gets it right, so I don't worry
    about it.
        [Laughter.]
        Mr. Dobosz. When I was in college, I would hear people say
    my name, I would just sort of snake my hand up and say ``Here''
    the first time they called the roll.
        Mr. Mica. Well, I am married to a half-Polish, maiden name
    Szymonik, S-z-y. You have the S-Z on the end.
        Mr. Dobosz, you are recognized, and welcome.

                        STATEMENT OF PAUL DOBOSZ

        Mr. Dobosz. Okay. Chairman Mica, Congressman Turner, thank
    you for the opportunity to address you on a matter that has
    profoundly altered the lives and financial futures of over
    20,000 Delphi salaried employees/retirees and their families.
        I am a retired Delphi engineer who served those companies
    loyally for 37 years. The last nine of those years of
    employment were with Delphi. Like my colleague Bruce Gump, I
    have received Delphi's highest engineering honors for numerous
    patents and other intellectual property contributions that
    helped make Delphi a technology leader and enabled the company
    to win nearly half a billion dollars in new business.
        At the time I retired in December of 2008, my wife and I
    had carefully planned for financial self-sufficiency with a
    retirement plan built around a three-legged stool of personal
    savings, my Delphi pension, and then someday, Social Security
    benefits. I never imagined that just seven months later I would
    see that stool kicked out from under me by Federal government
    institutions charged with defending and preserving pension
    plans such as mine.
        As I sat in the courtroom of Federal Judge Arthur Tarnow, I
    could scarcely believe my ears as I heard the PBGCs attorney
    tell the judge it was the obligation of the PBGC to protect the
    PBGC and its assets. When Judge Tarnow asked him who was
    looking out after the interests of the pensioners, the attorney
    was speechless.
        In the short time that I have to address you this morning,
    I would like to share how unnecessary the termination of our
    already frozen pension plan was, especially in light of
    actuarial data the PBGC had in hand concerning the assets and
    liabilities of our plan. The salaried pension plan had already
    been frozen in October of 2008. That meant it was no longer
    accruing any liabilities. The plan had also been closed to new
    hires since January of 2001. Those new employees received a
    defined contribution benefit in its place.
        The PBGC was acutely aware that the economy was in a trough
    and that the financial markets were in the beginning stages of
    a recovery. The decreased valuation of the plan's assets
    represented a snapshot in time rather than a realistic
    determination of their ability to pay benefits and their long-
    term viability. At the time of the termination, the Dow was
    hovering around 9,000. But four years later, the Dow is now at
    15,000, an increase of 67 percent. A market recovery of that
    proportion has grown the value of the plan's assets. But
    unfortunately for retirees, that makes no difference because
    the PBGCs valuation of those assets, for the purpose of benefit
    computations, is frozen in time at July 2009 numbers.
        Well, that raises an obvious question. If the Delphi
    salaried plan's assets were merely experiencing the effects of
    a dip in the financial markets, why was the PBGC so agreeable
    to terminating a plan to its own potential financial detriment?
    The answer to that question lies in political influence.
    Delphi's hedge fund debtor-in-possession lenders and other
    politically influential players in the GM bailout were able to
    exert that force on the PBGC via the U.S. Treasury and the Auto
    Task Force to clear all pension liabilities from Delphi's
    balance sheet.
        With the knowledge we have gained from discovery, we now
    know that despite the public insistence that the Delphi
    salaried plans were severely underfunded, the PBGCs own
    internal analysis of potential scenarios to preserve the Delphi
    salaried plan show that very modest additional funding would
    have been required to fully meet the plan's obligations.
    Actuarial reports in the PBGCs possession showed the real
    asset-to-liability ratio at 75 percent or, as previously
    mentioned, 86 percent, utilizing even some pessimistic economic
    assumptions.
        Meanwhile, the PBGC continued to justify that termination
    by citing asset-to-liability ratios of around 46 percent.
    Independent actuaries who benchmarked the Delphi salaried plan
    against peer plans that they had deemed adequately funded
    judged that the Delphi salaried plan funding was at least on a
    par with those plans.
        All of that uncertainty and conflicting numbers continues
    to hang over the heads of retirees who, four years after plan
    termination, are still waiting for accurate accounting of
    assets and liabilities seized by the PBGC and, most
    importantly, their final PBGC benefit amount. In response to an
    inquiry by Congressman Turner, the PBGC recently stated that
    they are unlikely to have this task completed anytime soon, in
    fact, before 2015. Now, that is six years after the termination
    took place. In my mind, there is no credible excuse for taking
    six years to account for assets and liabilities and compute
    benefit amounts according to a set formula.
        I could dive deeper into what we have learned in this
    arduous four-year battle to recover our pensions that were
    seized to benefit the politically powerful, but time severely
    limits how much I can share in this forum. Delphi salaried
    retirees aren't asking for a handout. We are asking for our
    government to behave in an open and honest manner and to comply
    with laws and regulations without regard to political influence
    or power. This issue may not garner very widespread attention
    and front-page headlines, like the IRS scandals currently are,
    but it represents an equally blatant abuse of political power.
        Thank you for the opportunity to testify before the
    committee.
        [Prepared statement of Mr. Dobosz follows:]

        [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]

        Mr. Mica. Well, thank you.
        Now we will turn to Mr. Sherk. He is affiliated with the
    Heritage Foundation but appears to be testifying on his own
    behalf today as a result of his review of this matter.
        Welcome, sir, and you are recognized.

                        STATEMENT OF JAMES SHERK

        Mr. Sherk. Chairman Mica and Congressman Turner, thank you
    for inviting me to testify. My name is James Sherk, and I am a
    senior policy analyst in labor economics at the Heritage
    Foundation. But as you said, the views I express in this
    testimony are my own. It should not be construed as an official
    position of the Heritage Foundation.
        This morning I want to explain that the United Auto Workers
    received unusual preferential treatment during the auto bailout
    and that without this favoritism, the taxpayers would not have
    lost money. There are several important facts about the bailout
    for you to consider.
        The first fact is that the United Auto Workers received
    highly unusual preferential treatment. Bankruptcy law gives the
    courts the authority to rewrite union contracts to make
    companies viable again. In a normal bankruptcy, union pay at
    General Motors and Chrysler would have been reduced to market
    rates. Instead, while the union did make significant sacrifices
    on behalf of new hires, incumbent workers retained most of
    their existing compensation packages.
        As the UAW put it, ``For our active members, these
    tentative changes mean no loss in your base hourly pay, no
    reduction in your healthcare, and no reduction in pensions.''
    This rarely happens at unionized companies in bankruptcies.
        Bankruptcy law also provides for secured creditors to
    recover their claims before unsecured creditors, and for
    similarly situated unsecured creditors to receive similar
    treatment. This also did not happen.
        General Motors owed approximately $20 billion to a trust
    fund paying UAW retiree health benefits and $30 billion to its
    unsecured bondholders. These claims had the same legal
    priority. However, the union enjoyed a substantially greater
    recovery on its debts. For their $30 billion in claims, General
    Motors' unsecured bondholders received stocks and warrants
    worth, in present value, $8.7 billion. Had the UAW received
    equal treatment, it would have recovered the same proportion of
    its debts, about $5.9 billion. Instead, the union collected
    assets worth $20.4 billion, over three times as much.
        The same thing happened to Chrysler. Chrysler's first lien
    secured creditors collected $2 billion on their $6.9 billion in
    debt, 29 cents on the dollar. Chrysler's second lien secured
    creditors collected nothing. Legally, the UAWs claims had lower
    priority than both the first and the second lien secured
    creditors, so the union should have also received nothing until
    all the secured creditors were paid in full. Instead, the union
    got securities and ownership shares in new Chrysler worth, in
    today's dollars, present value, $9.7 billion. And as we have
    discussed today, UAW members also received special treatment at
    Delphi when it filed to have the PBGC take over its pension
    plans.
        Half of the Delphi retirees, both salaried and hourly,
    faced reductions in their pensions. Now, old GM had an
    agreement with the unions to top-up the pensions in case Delphi
    went bankrupt, but that was only a liability for old GM. New GM
    had no such liability. Instead, nonetheless, new GMs
    management, while being overseen by the Obama Administration,
    supplemented the pensions of the unionized retirees at a cost
    of $1 billion. The non-union retirees, again, recovered
    nothing.
        The United Auto Workers received highly and unusual
    favorable treatment during the bailout and the bankruptcy.
        The second fact about the bailout to be aware of is that
    the automakers could have been kept in business without any of
    this favoritism. They could have produced the same number of
    cars and made as much money at much less cost to taxpayers.
    There was no business reason to provide this favoritism. The
    Obama Administration's justification is that the United Auto
    Workers were essential to basically prevent them from striking.
    But in 2009, they had little leverage and had no plans
    whatsoever to go on strike. Even if the union had gone on
    strike, General Motors and Chrysler have had no difficulty
    filling their new Tier 2 positions that pay less than what the
    transplant automakers pay. The companies could have simply
    continued operations with replacement workers. There was no
    reason for this preferential treatment.
        Had the government treated the UAW in the manner required
    by bankruptcy law, the entire bailout would have amounted to
    subsidized loans instead of the bailout that they got. The UAWs
    excess recovery did nothing to keep the automakers in business.
        The third fact is that this union favoritism caused the
    taxpayer losses on the bailout. The Congressional Budget Office
    and the Treasury Department estimate that taxpayers will lose
    between $17 billion and $20 billion on the bailout. These
    losses would not have occurred if the Administration had given
    the UAW standard treatment in the bankruptcy. If the bankruptcy
    had reduced union compensation to market rates, GMs labor costs
    would have fallen, raising the value of the government's
    ownership in new GM. This would have saved taxpayers almost $5
    billion.
        The union trust fund's disproportionate recovery also came
    at taxpayer expense. The excess shares in securities that the
    union got could have gone to the Treasury and to the taxpayers
    instead. Not doing so cost taxpayers $14.5 billion at General
    Motors and almost $10 billion at Chrysler. And not giving the
    bailout to the hourly retirees at Delphi would have further
    reduced the cost of the bailout by $1 billion.
        In total, the UAW received $30 billion more than it would
    have under normal bankruptcy proceeding. The entire loss to the
    taxpayers comes from these funds diverted to the union. The
    Administration could have kept the automakers running without
    losing a dime.
        Thank you. I appreciate the opportunity to explain how the
    unusual treatment given to the UAW caused the taxpayers to lose
    billions on the bailout of General Motors and Chrysler.
        [Prepared statement of Mr. Sherk follows:]

        [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]

        Mr. Mica. Thank you both for your testimony, and I will
    turn to some questions now.
        Mr. Sherk, let me ask you a question. The Pension Guaranty
    Fund was terminated for the salaried employees. Do you know if
    it was terminated for the hourly or kept in place?
        Mr. Sherk. My understanding is it was terminated for both,
    but then the hourly employees received a top-up from new GM.
        Mr. Mica. So, in other words, the top-up would have had to
    come from taxpayer money because they were operating basically
    on the lifeline that was thrown to them by the Federal
    Government at the time.
        Mr. Sherk. That is exactly right. New GM was a creation of
    the taxpayers. It was capitalized and created by the Treasury,
    and all the initial operating funds they had came from taxpayer
    funds.
        Mr. Mica. Now, when we get through with this, I have seen
    that some stock has recently been stole--sold.
        [Laughter.]
        Mr. Mica. A slip of the tongue there. Some of the stock has
    been cashed in at about $34, $35. It would have to be in the
    $50 range, I think, to break even?
        Mr. Sherk. That is right. If it had been sold at $50 right
    from the get-go ----
        Mr. Mica. But the total amount that the taxpayers are going
    to end up paying, are you familiar with it? I heard the
    estimate is $17 to $20?
        Mr. Sherk. Yes, it depends on the--the taxpayers still have
    about 200 million shares of new GM, and it depends what price
    those ----
        Mr. Mica. What price the balance is sold?
        Mr. Sherk. Yes. So it is ----
        Mr. Mica. A potential $15 billion to $20 billion?
        Mr. Sherk. That is right.
        Mr. Mica. The other thing, too, is it looked like the
    topping up of the unionized retirees' pensions was about $1
    billion, but the UAW got $30 billion in perks from the bailout.
    Can you explain how you calculate that?
        Mr. Sherk. That is right. There were three different
    assessing preferences they received. The first was for the
    union retiree medical benefits trust fund, also called AVIBA.
    Which had about $20 billion was owed to them at General Motors
    and ----
        Mr. Mica. At the time of the bankruptcy.
        Mr. Sherk. At the time of the bankruptcy, and about $8
    billion, and this was basically future claims brought into
    present value terms in 2009. And they should have recovered at
    the same rate as the unsecured creditors of both companies.
        Now, at General Motors, they were covered at about triple
    the rate of the unsecured creditors, and at Chrysler the
    secured creditors weren't even paid off. They got 29 cents on
    the dollar, the first claim secured creditors. So the union
    should have also got nothing, and all those excess shares that
    the unions recovered could have gone to the taxpayers instead.
        Mr. Mica. So you have the salaried employees, the secured--
    were they bondholders?
        Mr. Sherk. At General Motors, the secured creditors were
    made whole, but the unsecured creditors collected at a much
    lower rate than the unsecured.
        Mr. Mica. Okay.
        Mr. Sherk. At Chrysler, the secured creditors got 29 cents
    on the dollar. The unsecured creditors got nothing.
        Mr. Mica. And you said that is a huge liability on the
    healthcare side. Was that GM and Chrysler?
        Mr. Sherk. It was for both of them. It was $14.5 billion at
    General Motors, the excess recovery. It was about $20 billion
    that was owed at General Motors, and about $8 billion was owed
    at Chrysler. And then the unions got shares and stocks in the
    company that became worth quite a lot of money.
        Mr. Mica. The breakdown of the $30 billion is mostly
    healthcare?
        Mr. Sherk. It is mostly healthcare with about $10 billion
    at Chrysler, $14.5 billion at GM for those healthcare costs.
        Mr. Mica. How did the retirees find their healthcare
    situations, or were you completely taken out of the healthcare?
        Mr. Dobosz. Yes. We received a notice in February of 2009
    that as of April 1st we would no longer have company-provided
    healthcare. At that point, we could buy it individually. In my
    case, for my wife and myself, it was $1,600 a month. This was
    before the pension termination took place. We realized that
    this was a very non-viable situation, and so we organized a
    voluntary benefits association, AVIBA, that was HCTC qualified,
    and now our retirees have access to that through the end of
    this calendar year until the new health care law takes effect,
    and that provides premium subsidies. It brings the premiums
    down for a family to maybe $500 to $600. I am not familiar with
    the current numbers on that but somewhere in that range, as
    opposed to $1,600.
        Mr. Mica. Well, okay. You saw your pensions cut, your
    healthcare eliminated. On the other side, the hourly ----
        Mr. Dobosz. Their healthcare is assured, and their pensions
    are whole. It is a totally different treatment.
        Mr. Mica. So they used taxpayer money also to underwrite
    that.
        Mr. Dobosz. That is correct.
        Mr. Mica. The losses were staggering, or the indebtedness
    of the healthcare, a huge portion of that. Now, what happened
    with that? That was just written off also?
        Mr. Dobosz. The healthcare portion?
        Mr. Mica. Yes, again for the new GM. Did they come out of
    this with no healthcare liability?
        Mr. Dobosz. Yes. The unions actually became the healthcare
    providers for the retirees, and it was funded with this money
    that they received from the bailout.
        Mr. Mica. So the Pension Guaranty Fund, which was supposed
    to help you, did not help you. It had about $2.3 billion in
    assets at the time they threw you overboard, and you had this
    huge liability on healthcare, which was also absorbed by the
    taxpayer. So you got doubly shafted. Even if you got your
    retirement back, you are still shafted on the healthcare side.
        Mr. Dobosz. Until our people are Medicare eligible, and we
    had a group of fairly young retirees because our demographics
    were such that as Delphi started closing a lot of operations,
    people were being pushed to either retire early or they had no
    other options.
        Mr. Mica. Well, most of this effort has been to seek some
    justice in the pension, but the healthcare is actually--you
    have not been able to pursue. There is nothing to pursue there.
    You just got shafted, and the taxpayer money which--ironically,
    you were paying taxes all that time and ended up bailing out
    the incredible amount of money for healthcare that was due.
        Mr. Dobosz. Yes. And I do have to say, the health coverage
    tax credit that we are eligible for has been a lifesaver for
    many of our people because without it, they would be going
    naked without any coverage.
        Mr. Mica. Mr. Sherk, you heard some of the testimony by the
    previous witnesses that, again, the Pension Guaranty Fund acted
    arbitrarily, that in fact with 86 percent of the assets
    available, they were still terminated. Do you see that as
    correct? In their figures, is there enough there, if they were
    treated fairly, and that still could be the case, to make whole
    their retirement?
        Mr. Sherk. I haven't had the opportunity to review those,
    the 86 percent figure. If that is true, that they were 86
    percent funded when they were terminated, then it is very hard
    to see a justification for the termination, that there are a
    lot of funds, especially in 2009, that were terminated--sorry,
    that were not terminated.
        Mr. Mica. That were not even in that good a shape.
        Mr. Sherk. Yes.
        Mr. Mica. Well, again, I think we need to get additional
    data. I was impressed with your report. I will have to get this
    posted online. I guess you are releasing it today, your
    statement. You actually covered more than you did in your
    testimony, some 16 pages of background information, and pretty
    in-depth. So we appreciate you providing that to the committee
    and your testimony.
        Let me yield to Mr. Turner.
        Mr. Turner. Mr. Chairman, thank you so much for your
    statements on the issues of healthcare, because that is one
    that also illustrates the inequity. If you look at the issue of
    the health care tax credit that they currently have been
    utilizing, it is expiring. With the Obamacare increases in
    premiums that are expected, and the pension reductions that
    each of these individuals have received, the financial impact
    on them is even greater as they look to what they may be facing
    in future costs for health insurance and healthcare.
        I know how this impacts families directly. My father was
    IUE from General Motors, not Delphi, in his retirement. But he
    was not UAW as a result in the bankruptcy of General Motors. He
    lost his healthcare after working for General Motors for over
    40 years. Luckily, he was able to go onto my mother's
    retirement health insurance. But without that, we would have
    been facing a significant crisis, as many of these families are
    facing. They did face, of course, increased costs, but they
    would have had a crisis, as many of these families have
    struggled with. I appreciate your highlighting that because
    that is absolutely a taxpayer-funded difference.
        Whenever you have an issue like this where the government
    does something and it doesn't make sense and you try to do
    oversight, and the government doesn't respond to requests for
    documents and information, you become increasingly suspect. But
    another area where you can become increasingly suspect is if
    you call people forward and ask them questions and the answers
    that they give you are disingenuous, where there are clearly
    misrepresentations.
        Mr. Chairman, we have had hearings where we have asked
    people why was UAW topped up in the bankruptcy, and the answer
    has been to us, well, there was a pre-existing agreement
    between GM and the UAW for topping up the pensions. We all
    know, as Mr. Sherk was saying, one that would have been under
    the bankruptcy with old GM, and it was not binding in
    bankruptcy. And if you ask the next question in the hearing,
    yes, but this was a bankruptcy, wasn't that agreement voided,
    the testifier will say, yes, it was voided. But their initial
    answer to us, which is the disingenuous one, is where there was
    an agreement for it to be done.
        I would like each of you, if you could give us other
    examples that come to mind of answers that we have received
    that just don't make sense, because when they tell you one
    thing and you actually know another, I think it leads you to
    conclude that they are not telling the truth. I know the
    frustrating process of lack of answers certainly gives us
    suspicion. But the frustrating process of getting incorrect or
    misleading answers is even more so, and I am certain that
    perhaps each of you could contribute to our overall perception
    of why this has been really a stonewalling from the
    administration.
        Mr. Dobosz. I guess my biggest frustration is when I ask a
    question of the PBGC, or when we do, we wind up with an answer
    that just creates another question. I am trying to think of an
    example. There are so many of them. But in general, let me just
    focus on something very recently.
        We had something sprung on us about a month ago that, oh,
    by the way, you are not going to get your full PBGC amount from
    the PBGC. There was some sort of a private annuity with three
    insurance companies. Therefore, a portion of your pension is
    going to be paid by them, and we will pay the difference
    between what we used to pay you and that amount.
        So I asked them the question, I said why, then,--first of
    all, I asked them the question, is this a guaranteed benefit
    coming from the private annuity? And they said, no, that is
    totally outside of the pension. So my next logical question
    was, if it is not an insured benefit, why is it included in the
    cap that you capped my benefits at?
        I have sent three follow-up emails to the PBGC asking them
    for details on how this was calculated, more details about this
    annuity and why it should be maintained as a part of the cap,
    and I keep getting the response, we will give you an answer in
    three days, we will give you an answer in three days. We are so
    sorry, we will give you an answer in three days.
        So it is just a constant delaying cycle, and you can't get
    a straight answer. You don't have any idea what is going on,
    and you really don't have any idea what you are going to wind
    up with long term, so you can't even plan for the worst,
    because there is a possibility right now, if the PBGC decides
    they are paying any of these people too much, that they will
    start clawing it back.
        Mr. Sherk. The answer to me that sounds the most
    disingenuous, when they are asked why did you give these
    preferences to the unions, why did they collect so much for the
    rebo, why didn't they make more concessions, it is always a
    business necessity. We needed to maintain the business
    relationship with the union and basically keep them happy to
    ensure productive future operations.
        That is ludicrous. That is beyond ludicrous. The union was
    not going to go on strike in the fall of 2008 and early 2009.
    They knew the alternative to the bailout was the liquidation of
    the company and all of their members losing their jobs. They
    had absolutely no leverage to insist that they get $30 billion
    in taxpayer money redistributed to them. There was no business
    necessity to do that. And even if the union had gone on strike,
    the companies have had no difficulty filling these Tier 2
    positions that pay far less than what the incumbent workers
    were enjoying. They could have continued operations with
    replacement workers.
        There was simply no necessity to give the union $30 billion
    in order to keep the companies running. And yet, every time
    they are asked why did you do this, that is the response,
    business necessity, we had to ensure smooth operations.
        That dog just won't hunt. It is not remotely plausible.
        Mr. Turner. Well, thank you both for addressing that. As we
    have said through these hearings, that has been one of the
    aspects that has been most troubling, that if you don't ask the
    second question, they will leave you with a misleading answer.
        Mr. Chairman, as I go to yield back, I want to thank you
    once again for taking your time to be here. You are a man of
    action and have a great reputation in Congress of being highly
    substantive. The fact that you have come to Dayton, Ohio to
    hear this story today I know is time that you are taking both
    from your work in Congress, your district, and your family. As
    you know, we are hoping that the message today would be one
    that would be a call of action. The power of your gavel is
    significant, and we appreciate that you brought it here today,
    and I look forward to any way that I can assist you in what you
    see might need to come out of this.
        This is one of those items where, if no one holds the
    administration accountable, no one will ever know what happened
    or what should happen. And that is the difference in our job of
    oversight, is looking at what happened and what should happen,
    and that is how we get justice and resolution.
        With that, Mr. Chairman, thank you for being here today.
        Mr. Mica. Thank you, Mr. Turner, for your participation,
    and also your persistence in bringing this matter before me and
    our subcommittee and the full committee.
        As I said, the manner in which we are going to proceed, I
    see a dramatic failure of our success in obtaining even the
    basic documents and information that I think Congress is
    entitled to. So whatever steps I need to try to secure that
    information, we will pursue that, be it subpoenas.
        Additionally, we will convene another hearing, a full
    subcommittee hearing in Washington. I want to go back through
    the documents of some of these folks that you cited today and
    see who has testified, who has not testified, who was involved
    in making these decisions, and we will ask them to testify. It
    will either be voluntary or involuntary. We may need subpoenas
    there, so I will need your support in working with the
    committee to demand the appearance of those witnesses and that
    information.
        This is the kind of issue that could easily get swept under
    the rug or ignored. It affects 20,000 people, which is
    significant. But Washington is miles away, and sometimes
    attention gets diverted to other issues. But I believe this is
    one that does require our response. Sometimes these issues do
    take a while to pursue, but I think it should be pursued, and
    you have my commitment, Mr. Turner, that we will keep this high
    on the radar and action screen for the next months and weeks
    ahead here so it won't be ignored.
        It is a grave injustice that, again, taxpayers who were GM
    employees, Delphi employees, and now retirees, would see their
    government not only abandon them but take their resources and
    unfairly distribute them and leave them behind. So if there is
    a remedy, we will look for that. I can't guarantee it, but we
    will certainly pursue the matter.
        I want to thank both of the two witnesses on this panel and
    the three witnesses that appeared before us today.
        There being no further business before the Subcommittee on
    Government Operations, this meeting and hearing is adjourned.
        [Whereupon, at 11:44 a.m., the subcommittee was adjourned.]

                                    APPENDIX

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                   Material Submitted for the Hearing Record

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