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GM, Chrysler and bailout companies could be banned from lobbying

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GM, Chrysler and bailout companies could be banned from lobbying

Neil Roland

Automotive News -- June 16, 2010 - 4:24 pm ET

WASHINGTON -- A senior Republican will make a legislative bid tomorrow to end lobbying by General Motors Co. and Chrysler Group as long as they are substantially owned by the federal government.

Rep. Darrell Issa of California, the top Republican on the House Oversight and Government Reform Committee, will introduce an amendment to the financial regulation bills during tomorrow’s conference meeting, Issa’s spokesman said.

The amendment would extend the current prohibition on lobbying by Fannie Mae and Freddie Mac, the government-controlled mortgage giants, to all companies in which the government has ownership stakes, said Issa spokesman Kurt Bardella.

These companies would include GM, Chrysler, Ally Financial Inc. (the former GMAC) and insurer AIG, he said.

“Any company that has borrowed taxpayer dollars should not be allowed to hire a lobbyist until the taxpayers have been repaid in full,” Bardella said in an e-mail. “There is no justification for allowing a company subsidized by taxpayer dollars to hire a lobbyist so they can try to influence the very government that owns the company.”

The bill would prohibit the companies from hiring lobbyists and require their existing lobbyists to de-register, quit or have their contracts nullified, the Issa spokesman said.

Conference committee

House and Senate negotiators have been meeting since last Thursday to try to resolve differences in the financial regulation bills passed by each chamber. One provision under discussion -- unrelated to the Issa amendment -- would exempt auto dealers from oversight by a proposed new consumer finance agency.

GM indicated it would oppose the Issa amendment.

“General Motors will continue to exercise its First Amendment right to free speech,” company spokesman Greg Martin said. “Because complex policy issues can have significant economic and competitive consequences to GM and its competitors, the company is obligated to have its voice heard in the policy-making process.”

A Chrysler spokeswoman declined immediate comment and an Ally Financial spokeswoman could not be immediately reached.

The government holds a 60 percent ownership stake in GM and a 10 percent stake in Chrysler as part of the 2009 bailout and Chapter 11 bankruptcy reorganizations of the two companies.

Active lobbies

Since their bankruptcy filings in the spring of 2009, GM has spent $4.3 million on lobbying through March of this year, and Chrysler has spent $2.3 million, according to Center for Responsive Politics data provided by a spokesman.

The government also holds a 56 percent stake in Ally Financial -- the renamed parent company of automotive financier GMAC -- which was bailed out, but didn’t file for bankruptcy.

Issa is considering a prohibition on lobbying for any company in which the government has a 5 percent stake, though the lawmaker hasn’t made a final decision on the details of his amendment, Bardella said. Issa is one of the conferees, Bardella said.

The financial-regulation bill that emerges from conference has to go before the House and Senate for a final vote before heading to President Barack Obama’s desk.

Fannie Mae was directed by the company’s regulator to disband lobbying after the company was placed into government conservatorship in September 2008, a Fannie Mae spokeswoman said.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100616/OEM/100619881/1142#ixzz0r3Np0jBT

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Republican seeks to bar GM, Chrysler from hiring lobbyists

David Shepardson / Detroit News Washington Bureau

Washington -- A Republican congressman will attempt Thursday to bar two domestic automakers and other government-owned companies from employing lobbyists.

Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight Committee, plans to introduce the amendment during a negotiating session Thursday between House and Senate members on a sweeping overhaul of the nation's financial system.

The amendment would bar government-owned companies from employing lobbyists, said Kurt Bardella, a spokesman for Issa.

"Any company that is owned by the taxpayers should not be allowed to hire a lobbyist until the taxpayers' dollars have been fully recouped," Bardella said. "Talk about a revolving door situation -- there is no justification for allowing a company subsidized by taxpayer dollars to hire a lobbyist so they can try to influence the very government that owns the company."

Bardella noted that as a condition of the government takeover of mortgage giants Fannie Mae and Freddie Mac, they were barred from lobbying or making political contributions.

Issa's amendment would apply that same condition to General Motors Co., which is majority owned by the U.S. government, as well as American International Group Inc., also majority-owned by the taxpayers.

The ban would also apply to Chrysler Group LLC -- in which the U.S. government holds a 10 percent stake, Bardella said.

The U.S. Treasury owns 61 percent of GM, which it received for swapping $42 billion in government loans. GM's political action committee hasn't made any campaign donations in 18 months.

Both GM and Chrysler employ some outside lobbyists, but their political action committees haven't made donations in 18 months.

GM opposes the effort.

"General Motors will continue to exercise its first amendment right to free speech. Because complex policy issues can have significant economic and competitive consequences to GM and its competitors, the company is obligated to have to have its voice heard in the policy-making process," GM spokesman Greg Martin said.

GM has spent small amounts on outside lobbying this year.

GM hired the Podesta Group to advise it on auto safety and other issues, spending $30,000 in the first three months of the year.

GM also hired the Nickels Group, a lobbying firm headed by former Sen. Don Nickels, R-Okla., and Greenberg Traurig LLP to represent GM on Chinese trade issues. GM also hired Public Strategies Inc. on trade issues and the Washington Tax Group LLC on tax issues.

Chrysler hired Venable LLP to advise it on tax issues. It spent $200,000 retaining both Prime Policy Group and Timmons and Company to lobby on its behalf of auto dealer issues and other matters.

Both GM and Chrysler have in recent months hired new lobbyists to run their Washington offices as well.

Chrysler didn't immediately offer a comment.

Rep. Gary Peters, D-Bloomfield Township, who is also one of the House-Senate negotiators, opposed Issa's effort.

"GM has to run its own company," Peters said in an interview. "To me that smacks of Congress getting involved in the day-to-day management of the company. Congress should not be meddling in the day-to-day activities of any company."

He called the attempt "another example of people here in Congress that just don't understand the auto industry -- and they have this double standard for the autos versus everything else."

Issa has grown increasingly critical of GM in recent months.

He accused the automaker of running misleading ads about its repayment of government loans and last week accused the company of destroying documents, e-mails and other records.

His office criticized the automaker's decision to award a 2010 Z06 Chevrolet Corvette to Detroit Tigers pitcher Armando Galarraga after a blown call cost him a perfect game.

From The Detroit News: http://detnews.com/article/20100616/AUTO01/6160419/1148/auto01/Republican-seeks-to-bar-GM--Chrysler-from-hiring-lobbyists#ixzz0r3aWDkpc

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