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House Republicans want investigation of Rattner's handling of Delphi


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House Republicans want investigation of Rattner's handling of Delphi

David Shepardson / Detroit News Washington Bureau

Washington -- Two Republican members of Congress want an investigation into the conduct of former Obama auto czar Steve Rattner.

In a letter to the chairman and ranking member of the House Oversight and Government Reform Committee, Reps. Mike Rogers, R-Brighton, and Christopher Lee, R-N.Y., urged the committee to investigate Rattner's conduct.

Rattner, who headed the Obama auto task force from February until July 2009, "has been implicated in an alleged 2005 kickback scheme involving New York State pension funds through his role as a co-founder of the Quadrangle Group investment firm."

The letter quotes reports as saying Rattner was involved in the "scheme" to steer payments in exchange for a state investment contract.

Earlier this month, Quadrangle agreed to pay $12 million to federal and state authorities to settle the matter. Quadrangle issued a statement criticizing Rattner.

"We wholly disavow the conduct engaged in by Steve Rattner. ... That conduct was inappropriate, wrong and unethical," the company said.

The investigation calls "into question the integrity and objectivity of Mr. Rattner's panel, particularly the decision to allow some Delphi Corp. retirees, including many salaried retirees, to lose their pension benefits through the Pension Benefit Guaranty Corporation while simultaneously protecting the benefits of other Delphi retirees."

Dozens of Congress members have sharply criticized the disparate treatment of Delphi's hourly and salaried retirees.

Earlier this month, 12 members of the House Oversight Committee sent a letter to General Motors CEO Ed Whitacre Jr. questioning whether the company was being unduly influenced by its government owners -- and cited Delphi as an example.

Last July, Delphi abandoned its pension plans in bankruptcy covering 70,000 people, saddling the PBGC with a $6.2 billion liability.

Some of the company's salaried retirees will receive up to a 70 percent cut in the value of their pensions because the PBGC has limits on the amount it can insure.

The average retiree losing pension benefits will see about $850 a month cut, but some will not see any cut.

GM agreed to "top off" the pensions of most of Delphi's hourly retirees at an estimated cost of $1 billion.

Members of Congress have unsuccessfully sought records relating to the task force's decisions to allow the different treatment.

"Many Delphi retirees will lose significant portions of their promised pension benefits while others will be kept whole. This is unfair and unjust," Rogers and Lee wrote.

Delphi emerged from bankruptcy in October after it eliminated retiree health care and life insurance for salaried retirees.

Treasury Department spokeswoman Meg Reilly declined to comment and Rattner didn't return a message seeking comment.

From The Detroit News: http://detnews.com/article/20100429/AUTO01/4290460/1148/auto01/House-Republicans-want-investigation-of-Rattner-s-handling-of-Delphi#ixzz0mWPqJovS

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