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Bailout panel warns of politics

Posted Thursday, Sep 10, 2009, 5:41 pm in Employee News

The chairwoman of an independent panel that reviewed the federal bailout of GM and Chrysler warned Wednesday that steps must be taken to keep politics from influencing how the government manages its stakes in the two automakers, The Detroit News reported.

Her comments were quickly supported by a bipartisan group of U.S. senators who urged that a bill they proposed earlier this summer, which would provide stricter oversight of federal aid to the auto industry, be reconsidered, the paper said. The congressional oversight panel said in a 143-page report released Wednesday that the Treasury should place its 60.8 percent equity stake in General Motors Co. and its nearly 10 percent stake in Chrysler Group LLC into an independent trust to speed the government’s exit and ensure the automakers are free of political meddling, the News said.

In an interview Wednesday, Harvard law professor Elizabeth Warren, who chairs the panel, noted that Congress, foreign governments and the administration will be tempted to prod the Treasury into making decisions for political reasons if it continues to hold on to the stake in the companies, the paper said. Warren also argued taxpayers’ assets were at risk with the government as a passive investor, the story said. (The Detroit News)
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