Dan Quayle’s and John Snow’s Flunkies Putting Greed Ahead of America

quaylegmcrop.thumbnail.jpg (Image by twolf)

Now for an update from the most loathsome intersection of the financial and the auto crisis…

You’ll recall that last we heard, Chrysler was hoping to stay alive long enough to have Fiat’s Sergio Marchionne swoop in and save it. Even if that happens, though, Chrysler will need to get some customers to buy its cars until such a time as Marchionne can do his magic.

And to get customers, they’re going to need to get credit to offer those customers. As a reminder, to get credit, they’re sort of reliant on Chrysler Financial, a separate company from Chrysler, the part Cerberus wants to keep.

Only, the flunkies that John Snow and Dan Quayle have running Chrysler Financial are refusing to take government money to get that credit because–you guessed it–they don’t want executive pay limits.

Top officials at Chrysler Financial turned away a $750 million government loan because executives didn’t want to abide by new federal limits on pay, sources familiar with the matter say.

The government had been offering the loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a vital lender to Chrysler dealerships and customers.

In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company.

Oh. And don’t wory. Jamie Dimon and Vikram Pandit are in on the act, too:

But by forgoing the government loan, the company must borrow money from a group of private banks, including JP Morgan and Citigroup, sources said. That line of financing had been arranged in August, when the company was on the brink of bankruptcy, according to an industry official. The financing from the private banks comes at a higher borrowing cost for Chrysler Financial, a source said. 

Because that’s what Michigan needs, to owe JP Morgan Chase more money.

Read the whole story. It’ll get you saying "loathsome" too.

So nice to see the guy who used to be Vice President and the guy who used to be Treasury Secretary showing such an interest in the future of our country.

45 replies
  1. earlofhuntingdon says:

    The cure for that would be uniform national legislation, wouldn’t it? Obviously, current disclosure and accounting rules, and IRS limits on the deductability of senior executive compensation aren’t doing the trick.

  2. klynn says:

    Is there any possible way Obama could come up with a plan that would allow Chrysler to side-step Cerberus? There has to be a way to pull that off.


  3. burqa says:

    Dan Quayle?
    Did you say Dan Quayle?
    THE Dan Quayle who said, “I was recently on a tour of Latin America, and the only regret I have was that I didn’t study Latin harder in school so I could converse with these people.”

    That Dan Quayle?

  4. perris says:

    I have no idea whay anyone thinks fiat can save chrysler, outside their on country they have about the same reputation for quality as chrysler has

    I think if afiliation with mercedes couldn’t help chrysler it’s going to take alot more then fiat can offer

    • fatster says:

      Oh, how wonderful! No tee vee service here, so I have to wait to hear from you who have it. This is wonderful. If only they had had her on live!

  5. randiego says:

    Isikoff: still a douchebag. Making good points about how DOJ is supposed to work via guidelines, completely ignores that Bush didn’t follow any of it.

    Sweet shout-out to Marcy from Rachel. That was awesome.

  6. Rayne says:

    Believe that the matter of credit default swaps’ role in this situation is still being ignored by financial and auto industry. I’m hearing from inside auto industry that JP Morgan Chase is still holding fast, and that they still expect full payout.

    If all the top honchos still expect to extract their full pound of flesh, it means they are still expecting something to die.

    I wish we could get some better economic modeling done to show these bastards they will lose if they don’t pay forward; if the economy tanks again because of hundreds of thousands of auto jobs are lost, it is going to bite all of us, even them.

    (p.s. tell the techies there are some problems with Firefox/Vista and what appears to be some ad on this site attempting to launch a pop-up and running video from ps.j.tv2n.net or omn.crackle.com, sucking up HUGE amounts of memory…)

    • prostratedragon says:

      I wish we could get some better economic modeling done to show these bastards they will lose if they don’t pay forward;

      I don’t think they’ve been relying on econ models in the conventional sense, either they or the mortgage claimants that have largely refused to write down obvious losses. I think they’ve been relying on an assessment of how much they can extort expect in a bailout, directly. Economics is lost in that phase of the situation, therefore.

    • Mithras61 says:

      Very much along the lines of what I was thinking, also. Their insistence that nothing but reneging on UAW contracts can save Chrysler makes me suspicious, especially in light of their refusal to divest their holdings. It looks to me like they are trying to force Chysler under.

  7. PJEvans says:

    They’re right up there, along with Fiat wanting the unions to make concessions before they agree to take over Chrysler. (Like the unions haven’t been making concessions, but, maybe, the Fiat execs are getting all their information filtered through Snow and Quayle. )

  8. Peterr says:

    In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company.

    Sounds like “fiduciary responsibility” took a back seat to “executive compensation.” I wonder how that will go down with the stockholders and regulators.

    • Rayne says:

      You know, I read that as financing through more expensive financing through Cerberus.

      I guess somebody has to pay for Quayle.

  9. freepatriot says:

    Read the whole story. It’ll get you saying “loathsome” too.

    what, like it’s “Miss Manners” or something ???

    I am one seriously depraved an twisted individual, so it’s gotta be REALLY BAD to cause ME to use the word “loathsome”

    I lost my thesaurus a few years back, so I generally just stick with “FUCKING DESPICABLE”

    that’s not quite an accurate statement, I’m really quite verbose, and I never owned a thesaurus


  10. freepatriot says:

    hey, I just heard that my favorite muse got robbed

    fookin digg

    glad I never figured out how that worked

    first they ignore you

    then they ridicule you

    then they fight you

    then you win the repuglitards and everybody else steals yer stuff and the repuglitards claim they won

    way to go, “scoop” (saw rachel give ya a mention)

    ya got the bastards on the run

    (standing O)

  11. bobschacht says:

    Hey, y’all,
    Rachel Maddow’s segment tonight on Bybee includes an important interview with Sen. Sheldon Whitehouse, in which he talks about the path ahead, talking specifically about the OPR report, which he says is due shortly, like within a week. He expects it to be “very thorough,” and he expects it to be “devastating.” He also outlined several other investigations in process.

    Maddow’s show tonight emphasized that regardless of what noise might be coming out of the White House, the DOJ has its own charter to make independent judgments on legal matters. To do otherwise, especially in light of the recent disclosures about Abu Gonzo and Mlle. Harmon, would invite comparison to the bad old days when the DOJ was politicized. Seems a clever twist. Not that Obama seems to be shy about proclaiming Bush-like decrees from the WH. But I take hope from the apparent victory Holder seems to have had over Panetta and others in the WH? on the matter of releasing the memos, and in only lightly redacted form.

    I hope to hear soon from better minds than mine on these matters here at the Wheel House.

    Bob in HI

    • skdadl says:

      Thanks for that link, Bob. People can also back up a couple of segments from the interview with Whitehouse to Rachel’s grand acknowledgement of EW and the shot of the post itself — yay! — plus the interview with Isikoff.

      I barely have a mind at all, but I’ve been thinking since Thursday that the president can’t be the arbiter of these things, that Holder has to make judgements about investigation and prosecution on the basis of law and the constitution, not policy. The memories of Gonzales fumbling through so many sessions at the SJC on just these grounds are still fresh, and now more and more evidence is coming out that challenges even the “good faith” excuses for torture. If the pressure keeps building, Holder has to act independently, it seems to me.

      Great weekend, EW, and a great show last night, Rachel.

  12. bobschacht says:

    And here’s another eye-opener:
    Elizabeth de la Vega’s op-ed piece over at TruthOut, Of Black Holes and Radio Silence. She makes a surprisingly strong argument against appointing a special prosecutor right now. Her piece offers a good foil for a strong discussion on the merits, especially in light of the current frenzy of desire for AG Holder to appoint such an investigator.

    Sen. Whitehouse seems to be of similar mind– at least, he wants to wait for the OPR report first, and maybe some of the other investigations. He didn’t mention the cases before Judge Walker, but perhaps he was thinking about those, too (wouldn’t be a bad idea for a ruling by the court that The Program was illegal.)

    Whaddya’ll think?

    Bob in HI

  13. klynn says:

    About the post topic, (btw – congrats EW) I heard Barney Frank state with confidence last night on Charlie Rose, that we would see Chrysler have success in forming their partnership with Fiat and we would see GM have success in restructuring their debt without bankruptcy. I stood up and yelled at the TV, “Hey Barney, are you going to let us in on the specifics of your knowledge?” Charlie Rose, of course, did not ask any follow-up questions on this. So I sat there and figured out, the government is going to give more money and make it happen.

    So, in one sense, the Chase boycott is working. The headline this AM:

    US To Give Chrysler, GM New Aid

    WASHINGTON (Reuters) – The Obama administration will make about $500 million available to Chrysler LLC through the end of this month as it seeks to reach an alliance with Fiat, and up to $5 billion through May to help General Motors Corp restructure outside of bankruptcy, an independent oversight report on the Treasury Department’s corporate rescue fund said on Tuesday.

    Separately, the United Auto Workers (UAW) union urged its members to lobby the White House by phone or email to ensure that workers and retirees are treated fairly in negotiations at both companies on new concessions, which are considered vital for the automakers’ to survive.

    It appears we have a fight going on between the government and the banksters irt the auto industry. The government is trying to protect the economic spiral and Cerberus is working hard to create it due to their CDS’s.

  14. wavpeac says:

    cerberus continues it’s illegal behavior in the financing arena. They continue to be fearless. Accepting that bail out money might have caused more trouble than just limiting executive pay.

  15. Hugh says:

    Only, the flunkies that John Snow and Dan Quayle have running Chrysler Financial are refusing to take government money to get that credit because–you guessed it–they don’t want executive pay limits.

    This should tell you that the real and primary function of these companies is to pay their executives enormous salaries. Making car loans to chumps is for chumps. This is why too all of Giethner’s attempts to satisfy these executives will not fix financial markets or the economy. These guys could care less about either. They would just as soon see both go to hell as long as they get those big salaries.

    • earlofhuntingdon says:

      I think that’s exactly right. “Shareholder democracy” and “shareholder value” have been fraudulent slogans for years. SEC disclosures are so enwrapped in palaver by language from SEC lawyers, compensation consultants, PR specialists and HR wizards that they cease having much value regarding executive comp. or much else.

      Despite the Depression era SEC laws, we’ve never transitioned well from shareholder/owners – the Rockefellers and Vanderbilts – to anonymous market shareholders. Top executives took on the role of former owner/managers. Many run the business for their exclusive benefit.

      Jack Welch’s excesses are a prime example. He expected to be treated like Croesus during and after his “reign”, and was. Only his nasty divorce revealed his royal treatment and his retinue claimed he was worth it. But then, that’s their role as royal fools.

      We need to revamp more rules than the ones for compensation.

  16. foothillsmike says:

    This maybe a stupid question but is cerebus going to be the recipient of CDS payoffs in the event of a Chrysler failure? If it is and the union members are on the hook for unfunded liabilities of chrysler could they emerge from bankruptcy with ownership of chrysler?

  17. SugarCookie says:

    I’ve always been wary of anything Cerberus is involved with, and when I first heard about their connection with Chrysler a few years ago I got a sick feeling. Honestly, don’t you think they’re trying to tell us all something about their motives and ethics, with a wink and a nod, just by nature of the name of the company? My impression is that it’s all about power, secrets, and intimidation – and they like it that way. And there’s the friendly cross over with the Carlyle Group, which is full of very nasty characters.

    Plus, Cerberus is a creature from mythology, and aren’t all of the big wigs in this company supposed oh-so-devout believers of Christianity or Judaism? What’s up with that?

    Forgive my rant, but I’m just sick of these guys!

  18. spoonful says:

    What do these clowns (former VP + Sec of Trezury) have to do with Chrysler Financial? Article doesn’t say.

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