John Hinderaker at Power Line posted a troubling article about what is going on in the debate over how to handle Chrysler's restructuring. Evidently ignoring laws that assign priority to secured creditors, President Obama has tried to bully lenders into abandoning their legal rights in favor of the United Auto Workers Union. According to Power Line, Tom Lauria, a bankruptcy lawyer, has made the following comments:
Lauria: Let me tell you it's no fun standing on this side of the fence opposing the President of the United States. In fact, let me just say, people have asked me who I represent. That's a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House Press Corps would destroy its reputation if it continued to fight. That's how hard it is to stand on this side of the fence.
Beckman: Was that Perella Weinberg?
Lauria: That was Perella Weinberg.
The TARP loans, which banks are being stopped from paying back, are being used to control the banks. The banks that took TARP money had no idea what the strings attached to it would turn out to be. They're not strings--they're more like the steel cables that hold up a suspension bridge!
The article at Power Line goes on to say that the White House has denied the charges, but John Hinderaker points out:
Obama administration denies making the threats alleged by Lauria. The denial, however, is merely a bald assertion. Lauria is the head of the bankruptcy group at White & Case, and a Democrat who contributed $10,000 to the Democratic Senatorial Campaign Committee in 2008. In that sense, you could say that he helped to bring about the corrupt regime that is now bullying his clients. But his credibility vastly exceeds that of an administration spokesman who, having no knowledge of the facts, is sent out to issue a blanket denial.
I wonder how much more of this sort of arm twisting is currently going on in other areas. I suspect there are a lot of Obama supporters who are now feeling that this is not what they signed up for.
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