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Grassley and Barofsky name the money shuffle's tune

May 2, 2010 - Mike Maneval

On April 21, the New York Times' Gretchen Morgenson reports, General Motors announced they were repaying a $6.7 billion loan from the Troubled Asset Relief Program, news that relieved many American taxpayers. But as Morgenson uncovers, they may find the details of the "repayment" less relieving.

U.S. Sen. Charles Grassley, R-Iowa, and TARP Inspector General Neil Barofsky both acknowledge the repayment comes from a federally-financed escrow account for General Motors. Barofsky acknowledged this in Senate testimony on April 20 before GM began a public relations blitz tied to the loan, and Grassley continued to press the U.S. Treasury Department for details on what he characterized as a "TARP money shuffle."

GM spokesman Greg Martin defended the practice, saying "the bottom line" is the escrow account was anticipated to cover other operating costs and GM's improved performance allowed the car-maker to pay off a separate loan instead. Yet, Grassley's point remains the same: Between GM's handling of publicity and the Treasury Department's handling of publicity, the public could easily be left with the impression the money used to pay off the loan came from GM revenues when, in reality, they came from government largesse. And it fell to an inspector general and a senator to elaborate on that reality.


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