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By Martina Barash
Jan. 21 — Treasury Department e-mails that might indicate the government's role in shielding the “new” General Motors Co. and Chrysler Group LLC during the 2009 bankruptcy crisis from defect-related suits should be made public, an advocacy group says.
The e-mails, written as the companies sought government funds to avert liquidation in 2009, aren't protected by an exemption for confidential commercial information under the Freedom of Information Act, the Center for Auto Safety said in a brief to the U.S. District Court for the District of Columbia Jan. 20.
CAS is asking the court for summary judgment in its long-running FOIA suit against the Treasury Department.
“Although the taxpayers paid for this extremely extravagant bailout with money from the Troubled Asset Relief Program (‘TARP'), most of the negotiations between the Treasury Department’s Auto Task Force and the automobile companies were conducted behind closed doors,” CAS wrote.
CAS and its executive director, Clarence Ditlow, objected to both sales plans before they were finalized, along with other public-interest groups and individuals, Ditlow said in an accompanying affidavit.
The government provided more than $80 billion to the companies, the brief said. Most but not all of it has been paid back.
CAS said there's evidence the government insisted on the new companies emerging “free and clear” of liability for pre-sale accidents before it invested billions of dollars. The evidence, the group said, has emerged in proceedings in the U.S. Bankruptcy Court for the Southern District of New York, which is considering whether GM committed fraud on the court by concealing information about ignition-switch defects (In re Motors Liquidation Co., Bankr. S.D.N.Y., No. 09-50026).
The “new” GM wrote in a filing there, “[T]he U.S. Treasury drew a line in the sand: New GM would assume only those liabilities that the U.S. Treasury decided were commercially necessary for New GM’s success,” according to the brief.
CAS's initial FOIA request dates to the period between the two sales, in June 2009, according to the brief. The Treasury Department released some documents but withheld others. The group filed its complaint in federal district court in June 2011 to compel the release of the materials.
The government failed to meet its burden of proof for withholding materials under Exemption 4 of FOIA, CAS argued.
Communications by government officials are not protected, and release of the documents would neither hamper the government's ability to get information in the future nor cause the “new” GM and Chrysler companies competitive harm, the brief said.
Katherine A. Meyer of Meyer Glitzenstein & Crystal in Washington, D.C. represented CAS.
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The filing is available at http://www.bloomberglaw.com/public/document/CENTER_FOR_AUTO_SAFETY_v_US_DEPARTMENT_OF_TREASURY_Docket_No_111c.
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