[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:]

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    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:]

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    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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