Auto Bailout Was a Bonanza for Romney and Friends
Posted on Oct 18, 2012
Mitt Romney and his wife made at least $15 million (and as much as $115 million) from the very taxpayer-funded auto bailout of 2009 that he opposed, while donors to Republican candidates made more than $4 billion by holding the auto industry and tens of thousands of American jobs hostage.
Investigative journalist Greg Palast reports in a piece published by The Nation magazine that the money was made when the government sent more than $12 billion to a former General Motors subsidiary, the then-troubled auto parts manufacturer Delphi Automotive, and the hedge funds that acquired it. One of the beneficiaries of that deal was hedge fund director and known “vulture capitalist” Paul Singer.
Singer makes his money by paying pennies on the dollar for “distressed firms in distressed nations” and then demanding the full payment of debts in which the purchased company is involved. According to Palast, Singer “received $58 million on Peruvian debt that he snapped up for $11.4 million, and $90 million on Congolese debt that he bought for a mere $20 million. In the process, he’s built one of the largest private equity firms in the nation, and over decades he’s racked up an unusually high average return on investments of 14 percent.”
According to The Wall Street Journal, Singer has given $2.3 million to Republican candidates in this election. He was critical in getting Paul Ryan on the vice presidential ticket.
After acquiring Delphi Automotive amid the crisis, Singer’s hedge fund fired every one of its 25,000 unionized workers and closed 25 of Delphi’s 29 domestic factories. Those jobs were shipped to China, which now produces parts used by GM and other American automakers. Five-thousand employees remain in the United States, while 100,000 exist abroad.
Palast tells the whole story on “Democracy Now!”
—Posted by Alexander Reed Kelly.