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GM executives destroying documents, two Republican congressmen say

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GM executives destroying documents, two Republican congressmen say

Robert Snell / The Detroit News

General Motors Co. executives are destroying documents, e-mails and other records that could shed light on corporate decisions that have triggered investigations by a U.S. House oversight committee, two top Republicans allege.

The accusations were made in a letter Wednesday to GM Chairman and Chief Executive Ed Whitacre, and signed by U.S. Rep. Darrell Issa, R-Calif., and U.S. Rep. Jim Jordan, R-Ohio. The politicians asked GM to stop destroying documents that could provide insight into investigations focused on GM's controversial commercial touting its repayment of $6.7 billion in federal loans, and other moves.

The letter, obtained today by The Detroit News, raises questions about GM's policy of deleting electronic documents while taxpayers own a majority of the automaker. The government rescued GM with $50 billion in loans last year.

Issa's and Jordan's letter also raises questions about the government's efforts to control GM's day-to-day management despite pledges to stay out of the corporate decision-making process.

"In light of these ongoing investigations, we are deeply disturbed to learn that GM is engaging in a continuous process of destroying documents relevant to the Committee's oversight efforts," they wrote in the letter, made public today.

The lawmakers said they have "no evidence" that GM is destroying documents to deliberately prevent them from obtaining information. However, if GM continues its practice, Issa and Jordan would consider that "evidence of criminal misconduct" and alert the U.S. Department of Justice, they wrote.

"General Motors' document retention policies comply with the law," company spokesman Greg Martin said. "We have just received the letter and will respond appropriately."

GM is the target of multiple investigations led by the House Committee on Oversight and Government Reform, according to the letter. Those investigations include a GM commercial that ran in April about the repayment, the company's decision to choose new plant locations "in order to please powerful politicians," and a "secret agreement" to support the Obama administration's pursuit of new fuel economy standards.

The committee also is investigating GM's decision last year to delay the planned closing of two parts centers, including a facility in Norton, Mass., which is in the congressional district of Rep. Barney Frank, D-Mass.

In the TV commercial, Whitacre downplayed that taxpayers are still on the hook for $43 billion in aid that was swapped for a 61 percent majority stake in GM.

A conservative think tank filed a complaint with the Federal Trade Commission over GM's repayment ads, which are no longer running.

Many Republicans also have criticized the commercial, noting GM used unspent government loan money to repay the government.

The House committee recently interviewed senior GM attorney Lucy Clark Dougherty, who said GM's policy was to delete all electronic communication after 60 days and that the company did not have a backup system to retain copies, according to the letter.

Professor Fred Cate, a communications law expert at Indiana University, said most companies have a document retention policy that stores such data for six months to a year -- with many exceptions.

If a company is involved in litigation, relevant documents must be stored, Cate said.

But he has never heard of a company failing to use backup systems to store copies of electronic documents.

"If that is true, that would be absolutely unique in my experience," Cate said.

Issa and Jordan fear documents relevant to the committee's investigations have been destroyed already and more are at risk of being deleted each day.

That policy is unacceptable given the government's majority stake in GM, they wrote in the letter.

"Until such time as U.S. taxpayers have been divested of all financial interests in GM, we request that you immediately stop destroying documents and begin preserving all records and communications referring or relating to GM's status as a taxpayer-owned company, its relationship or interaction with government officials, and any issue that could be relevant to public policy," they wrote in the letter.

GM is preparing for an initial public offering of company stock, perhaps as early as late this year. The government cannot start cashing in its investment in GM until the automaker launches an IPO.

From The Detroit News: http://detnews.com/article/20100610/AUTO01/6100454/1148/auto01/GM-executives-destroying-documents--two-Republican-congressmen-say#ixzz0qTx9oD3y

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CONGRESSMEN QUESTION GM’S DOCUMENT DESTRUCTION

By Mark Kleis

The House oversight committee recently interviewed General Motor’s attorney, Lucy Clark Dougherty, who revealed that the automaker’s standard policy regarding electronic document retention was to delete all electronic communication after 60 days.

Upon learning of this policy, U.S. House Republican Rep. Darrell Issa of California and U.S. House Republican Rep. Jim Jordan of Ohio both sent a letter to GM’s chairman and CEO, Ed Whitacre. The letter, which was later obtained by The Detroit News, accuses the automaker of intentionally destroying documents and requested that they halt the practice immediately.

The two congressmen have based their accusations and request around the fact that there is an on-going investigation involving GM’s recent commercials in which Whitacre claimed to have paid off the government loans early, in full and with interest. The ads were quickly pulled as many believed them to be misleading, given that GM admittedly paid off the $6.7 billion loan with money also obtained from the federal government. GM was also the beneficiary of $43 billion which was given to the automaker in exchange for future equity.

“In light of these ongoing investigations, we are deeply disturbed to learn that GM is engaging in a continuous process of destroying documents relevant to the Committee’s oversight efforts,” said the congressmen in the letter to GM.

In addition to the investigation regarding the potentially misleading advertisements, The Detroit News points out that the letter also points out an investigation into the delay of planned closings for two facilities, including a facility located in the same congressional district as Representative Barney Frank, a Democrat from Massachusetts. The letter also alleges that locations for plants were chosen “in order to please powerful politicians,” according to The Detroit News.

“Until such time as U.S. taxpayers have been divested of all financial interests in GM, we request that you immediately stop destroying documents and begin preserving all records and communications referring or relating to GM’s status as a taxpayer-owned company, its relationship or interaction with government officials, and any issue that could be relevant to public policy,” wrote Issa and Jordan in their letter to Whitacre.

GM has not yet announced if they will change their policy towards electronic document destruction and/or retention.

link:

http://www.leftlanenews.com/congressmen-question-gms-document-destruction.html

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I hope this doesn't end up in Politics but basically this sounds like another case of "Congress = FAIL"

As long as any destroyed documents have been destroyed within the company's document retention policy, without a subpoena from Congress or a Court, GM hasn't done anything wrong.

Secondly, anyone with more then 3 braincells to rub together and at least a 3rd grader's grasp of math can see that the GM commercial was not deceptive. I'm sorry if that level of qualification seems to exclude a large chunk of Congress.

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I hope this doesn't end up in Politics but basically this sounds like another case of "Congress = FAIL"

As long as any destroyed documents have been destroyed within the company's document retention policy, without a subpoena from Congress or a Court, GM hasn't done anything wrong.

Secondly, anyone with more then 3 braincells to rub together and at least a 3rd grader's grasp of math can see that the GM commercial was not deceptive. I'm sorry if that level of qualification seems to exclude a large chunk of Congress.

It is just the same old DC crap and both sides do it. This too shall pass.

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Issa knows all about crime:

In the 1970s, Issa and his brother were twice charged with grand theft auto, once for a Maserati sports car in 1972 and for a Mercedes Benz sedan in 1979, along with being accused of stealing a car during his military service, although he denies these charges. He has also been convicted for possession of an unregistered gun.

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