Thread: Obama thuggery

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation*

May 02, 2009 3:17 PM


A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.


The White House and a spokesperson for the investment bank in question challenged the accuracy of the story.


"The charge is completely untrue," said White House deputy press secretary Bill Burton, "and there's obviously no evidence to suggest that this happened in any way."


Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.


Lauria first told the story, without naming Rattner, to Frank Beckmann on Detroit's WJR-AM radio.


Perella Weinberg Partners, Lauria said, "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."


A Perella Weinberg Partners spokesperson told ABC News on Sunday that “The firm denies Mr. Lauria’s account of events.”* The spokesperson would not elaborate.


Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. The firm is led by Joseph Perella. On Thursday afternoon -- after the Wedneday deadline -- the portfolio manager for the Xerion fund decided to join the larger four creditors who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.
Those four financial institutions - JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs -- are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate.
Someone familiar with the Perella Weinberg Partners' portfolio manager's thinking told ABC News that the decision to go along with the government plan "was based on an assessment of investment risk and reward and nothing else."


Lauria said his clients "are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt" with Chrysler.


President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.


"While many stakeholders made sacrifices and worked constructively, I have to tell you some did not," the president said. "In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none."


Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said.


President Obama also said of Lauria's clients, "I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices."


"He stands my clients up as basically the reason Chrysler is going into bankruptcy," Lauria said. "He wrongly says they're not willing to make any sacrifice. And then he says he does not stand with us."


Lauria said the president saying he doesn't stand with his clients "kind of sounds like 'You're fair game.' In whatever sense. People are scared. They have gotten death treats. Some have been told people are going to come to their houses. God forbid if some nut did something, I'm just wondering how the president would feel."


The Miami area-based attorney describes himself as an independent, and says after waiting in line for six hours last November he ended up not voting in the presidential election. He donated $10,000 to the Democratic Senatorial Campaign Committee in 2008 and $1,000 to then-Sen. Hillary Clinton, D-NY, in 2006.

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation* - Political Punch

Creditors to Chrysler describe negotiations with the company and the Obama administration as "a farce," saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.


Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.


The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking "end justifies the means" group they have ever encountered. Another characterized Obama was "the most dangerous smooth talker on the planet- and I knew Kissinger." Both were voters for Obama in the last election.


One participant in negotiations said that the administration's tactic was to present what one described as a "madman theory of the presidency" in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.


The White House has denied the allegation that it threatened Perella Weinberg.
Last week Obama singled out the firms that continue to oppose his plan for Chrysler, saying he would not stand with them. Perella Weinberg says it was convinced to support the plan by this stark drawing of a line between firms that have the president's backing and those that did not. They didn't want to be on the wrong side of Obama. Privately, administration officials have expressed confidence that other firms will switch sides for this reason.


These allegations add to the picture of an administration willing to use intimidation to win over support for its Chrysler plans--and then categorically deny it.

White House Accused Of Chrysler Threats

Threatening individual people because they did not go along with Obama's master plan? What type of country is America turning into?

Originally Posted by Golani

What type of country is America turning into?

Israel

Bush said:

We believe the American people can spend their money better than the government can spend it.

I say:

Obama is making sure millions of uneducated Americans can keep their overpaid jobs screwing bolts, so that they can spend monnies and oh so stimulate the economy.

Originally Posted by Golani

Threatening individual people because they did not go along with Obama's master plan? What type of country is America turning into?

Gonads,
Are you capable of independent thought? Everything you post is either from an article you've read or a regurgitation of something The Incredible Mr. Limpballs has said.

I prefer obama's 'thuggery" to the bush stupidity.

Won't somebody please think of the investment bankers?

55555

Originally Posted by Golani

Threatening individual people because they did not go along with Obama's master plan? What type of country is America turning into?

An assertion from an attorney for hedge funds and money launderers/managers. Got to be true.