Greg Palast: Romney's Bailout Bonanza---Mitt Profited By At Least $15.3 Million From Auto Bailout

[kpete]

Mitt Romney's Bailout Bonanza
Greg Palast October 17, 2012

A new report running Thursday in The Nation finds that Romney and his wife, Ann, made at least $15.3 million -- and perhaps tens of millions more -- as a result of bailout funds paid to General Motors. The story, an early copy of which was provided to The Huffington Post, is written by investigative reporter Greg Palast and was backed by the The Investigative Fund at The Nation Institute.

Romney's windfall from the bailout is directly tied to his relationship with Paul Singer, the billionaire hedge fund manager who donated $1 million to the Republican's presidential campaign in April. As The Nation reports, the Romneys invested at least $1 million with Singer's fund, Elliott Management, which is known for investing in distressed or bankrupt companies.

One of those bankrupt companies was Delphi, an auto parts maker that hit financial trouble after being spun off from its former parent, GM. Singer's fund bought up a controlling interest in Delphi for about 67 cents a share on average, The Nation calculates. By last November, Delphi's initial public offering was priced at $22 a share, thanks in part by efforts to cut costs by moving operations overseas and employing non-union workers. Delphi's stock price has continued to take off, with shares closing around $32 as of this week.

The Nation reports:

The Treasury allowed GM to give Delphi at least $2.8 billion of funds from the Troubled Asset Relief Program (TARP) to keep Delphi in business. GM also forgave $2.5 billion in debt owed to it by Delphi, and $2 billion due from Singer and company upon Delphi’s exit from Chapter 11 bankruptcy. The money GM forgave was effectively owed to the Treasury, which had by then become the majority owner of GM as a result of the bailout. Then there was the big one: the government’s Pension Benefit Guaranty Corporation took over paying all of Delphi’s retiree pensions. The cost to the taxpayer: $5.6 billion. The bottom line: the hedge funds’ paydays were made possible by a generous donation of $12.9 billion from US taxpayers.

Since the Romneys had at least $1 million invested with Elliott by the end of 2010, with a third of that portfolio likely in Delphi, The Nation estimates that they made at a minimum $15.3 million off Delphi's resurgence.

http://www.thenation.com/article/170644/mitt-romneys-bailout-bonanza#
http://www.huffingtonpost.com/2012/10/18/mitt-romney-auto-bailout-profit_n_1976651.html?utm_hp_ref=politics

[jsr]

1. He knew it was going to work.

[KansDem]

2. Romney wanted to "harvest" Detroit.

Amy Goodman interviewed Greg Palast on "Democracy Now!" this morning.

It was in Romney's best interests and his billionaire buddies to let Detroit go bankrupt...

[We People]

3. Funny how other people's misery has a way of lining his pockets

Get a clue, America

[lonestarnot]

4. K & R!