Panel: Treasury to release Delphi papers

August 23, 2013 at 11:29 pm
Panel: Treasury to release Delphi papers
David Shepardson
Detroit News Washington Bureau
Washington — The U.S. Treasury has agreed to hand over documents to a House committee related to the decision of the Obama administration to approve pension cuts for thousands of Delphi Corp. salaried retirees, the Treasury said Friday.

On Aug. 9, House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., subpoenaed Treasury Secretary Jacob Lew for information “into the preferential treatment afforded to Delphi’s unionized employees during the bankruptcy and taxpayer-funded bailout of General Motors.” It follows requests by many members of Congress for Delphi documents.

Issa spokesman Ali Ahmad said Treasury has agreed to comply. “Treasury has yet to provide documents but has committed to produce documents on a rolling basis,” he said Friday.

Earlier requests had been sent by the committee in 2010, 2011 and 2012.

The broad-based subpoena seeks any records related to the decision and potentially covers thousands of pages of records. The committee has not made the subpoena public.

The Treasury confirmed it will produce documents beginning the week of Sept. 2.

“We remain committed to working with the committee to provide the information needed to fulfill its important oversight role,” the Treasury said in a statement.

The Treasury has previously defended auto task force actions on Delphi, saying painful sacrifices by many were necessary in the $85 billion auto bailout.

Delphi pension retirees from the Troy-based parts unit that was spun off by General Motors Co. in 1999 have been battling nearly four years over lost pension benefits, and spent millions in legal fees to get access to documents. Some 20,000 salaried retirees and future retirees at Delphi lost pensions and health and life insurance benefits, including thousands in Michigan.

Delphi, while in bankruptcy in 2009, terminated pension plans of 70,000 people and left a $7.2 billion shortfall. The Pension Benefit Guaranty Corp., the government’s pension insurer, assumed the plans and must pay $6 billion of the losses.

PBGC recovered about $650 million from Delphi, meaning its net losses from taking over the plans is about $5.3 billion.

The supplier’s pension termination is the second-largest loss to PBGC in its history, behind only United Airlines’ pension shortfall of $7.4 billion in 2005.

In a move that brought criticism from Congress, GM “topped up” pensions of most Delphi hourly workers and retirees, primarily those from the United Auto Workers union, but didn’t do the same for salaried retirees. It took the action even though it wasn’t obligated to do so.

GM did not do the same for Delphi’s salaried retirees.

A report released last week by the special inspector general overseeing the $700 billion Troubled Asset Relief Program said the Obama auto task force had a key role in approving GM’s decision to top up the UAW pensions.

The former auto czar Steve Rattner told the inspector general the UAW’s request on pensions “was a game of chicken we didn’t want to play. We were under incredible time pressure,” adding “it was not a ridiculous request, and one that we could have honored and needed to honor.”

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