This story isn't getting picked up by the main stream media yet.
The attorneys representing the bond holders in the Chrysler bankruptcy have accused the White House of threatening them.
Of course, Obama ensured the union has majority control of the company. This is in complete disregard of normal practice in bankruptcy proceedings.

Welcome to Chicago, baby.

White House "Directly Threatened" Perella Weinberg Over Chrysler


Is The White House Lying About Perella Weinberg Threat Story?


This article pretty much neuters the "he's a right winger" argument.


White House Accuser Is A Big Time Democratic Donor
John Carney|May. 5, 2009, 11:01 AM

Tom Lauria, the White & Case bankruptcy lawyer at the center of the controversy over the Obama administration's alleged threat against Perella Weinberg, is a major donor to the political committee charged with giving the Democrats a filibuster-proof majority in the Senate.

Lauria's sole political donation last year was a whopping $10,000 to the Democratic Senatorial Campaign Comittee, according to federal election filings. That's far more than what might be expected of a passive political donor, marking Lauria as a major supporter of the Democrats.

The DSCC is run by New York Senator Chuck Schumer, and provided crucial support to Democratic candidates in close races. Al Franken, for instance, was a major beneficiary of the DSCC.

This might come as a surprise to some who have tried to portray Lauria's accusations as arising from partisan animus. In 2006, Lauria donated $1000 to Hillary Clinton.

Lauria told a Detriot radio station last week that the White House had threatened to use the White House press corp to ruin the reputation of Perella Weinberg if the firm continued to oppose the administration's plans for restructuring Chrysler. He later identified Steve Rattner, Obama's Car Czar, as the man who made the threats.

The firm switched to supporting the administraiton but denied back-door threats were responsible for the change. Instead, it said that it was the president's public lambasting of the opposition that caused it to switch sides. "The decision to accept and support the proposed deal was made by the Xerion Fund after reflecting carefully on the statement of the President when announcing Chrysler’s bankruptcy filing," Perella Weinberg said.

Liberal bloggers have portrayed the story as "a right-wing attack on President Obama." Lauria's political leanings indicate that the story is not so much one of partisan politics as the conflicting economic agendas of some creditors to Chrysler and the Obama administration.

More

IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- Don't Demonize Chrysler's Debt Holders For Standing Up For Their Shareholders


Hot Air Blog Archive Obama uses WH press corps as threat against Chrysler investors; Update: Tapper reports, WH denies


Senior creditors: Chrysler deal violates 5th Amendment
posted at 1:36 pm on May 4, 2009 by Ed Morrissey


If the Obama administration expected the senior creditors of Chrysler to fold their tents under political pressure, they may have gotten a rude shock today. Thomas Lauria, who accused the White House of threatening the creditors withn humiliation at the hands of the White House press corps, has filed a motion to halt the administration’s machinations on behalf of the UAW in the Chrysler bankruptcy. Lauria and his allies claim that the Obama administration has violated the Constitution in their bid to devalue the senior creditors’ holdings on behalf of junior creditors, and have some precedent to support the allegation.

The heart of the argument starts on page 8 (via HA commenter Outlander):

III. The Taking of Collateral through a Direct or Indirect Use of TARP Authority is Unconstitutional.

13. The Treasury Department relies on TARP as the purported authority to justify the disparate treatment under the 363 Sale, even though TARP was enacted after the Senior Lenders’ liens on the Debtors’ property were already in place. The Supreme Court long ago recognized, however, that a secured creditor’s interest in specific property is protected in bankruptcy under the Fifth Amendment. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 594 (1935). That case involved a Depression-era statute that was intended to help bankrupt farmers avoid losing their land in mortgage foreclosure. The statute in Radford provided that the bankrupt debtor could achieve a release of the security interests either (i) with the lender’s consent, purchasing the property at its then appraised value by making deferred payments for two to six years at statutorily-set interest rates; or (ii) by seeking from the bankruptcy court a stay of the proceedings for up to five years during which time the debtor could use the property by paying a rent set by the court, which payments would be for the benefit of all creditors, with a purchase option at the end of that period. Id. at 856-57.

14. Justice Brandeis noted that the “essence of a mortgage” is the right of the secured party “to insist upon full payment before giving up his security [i.e., the property pledged].” Radford, 295 U.S. at 580. In invalidating the statute, the Court stated that “[t]he bankruptcy power . . . is subject to the Fifth Amendment,” and that the pernicious aspect of this law was its “taking of substantive rights in specific property acquired by the bank prior to the act.” Id. at 589-90 (emphasis added). Thus, Congress could not pass a law that could be used to deny to secured creditors their rights to realize upon the specific property pledged to them or “the right to control meanwhile the property during the period of default.” Id. at 594. That is precisely what the Treasury Department would have Chrysler do here, with respect to the Chrysler Non-TARP Lenders’ property rights that were acquired prior to the enactment of TARP.

15. Relying on purported authority provided by TARP, the Treasury Department is demanding that Chrysler’s assets be stripped away from the coverage of the Senior Lenders’ liens – thereby impairing the rights of the Senior Lenders to realize upon those assets – so that those assets may be put in New Chrysler and used to the benefit of unsecured creditors in this proceeding, who will then be paid much more than the Senior Lenders. But, even assuming that TARP provides the Treasury Department with authority to provide funding to the Debtors and impose the transfer of collateral away from the Senior Lenders, TARP was enacted long after the Senior Lenders contracted with the Debtors and received senior liens on the Debtors’ property. Radford specifically disallowed the use of a law to retroactively alter existing liens on property.

16. Here, the proposed sale of the Debtors’ assets will leave the Senior Lenders with a diluted pool of assets and no further interests in the operating assets covered by their specific liens. The Constitution forbids this application of a law retroactively to undercut the Senior Lenders’ pre-existing property rights in favor or inferior creditors.

17. Finally, that the Treasury Department would take these unconstitutional actions to help the United States address difficult economic times is not an answer. Indeed, the same justification was expressly rejected in Radford, where Justice Brandeis noted that a statute which violated secured creditors’ rights, but which was passed for sound public purposes relating to the Great Depression, could not be saved because “the Fifth Amendment commands that, however great the nation’s need, private property shall not be thus taken even for a wholly public use without just compensation.” Id. at 602.

18. What is really striking here is that what is being proposed by the Sale Motion would strip the Collateral away and allow it to be put to use as new capital in New Chrysler for the benefit of existing and other creditors – even though the Chrysler Non-TARP Lenders have been given no opportunity to realize upon that Collateral to the point of full repayment ahead of at least $14 billion of selectively identified unsecured creditors.

One might think that a Constitutional scholar like Barack Obama would have already known that, but either this precedent escaped him or he doesn’t care about it at all. Brandeis acted to uphold contract law, especially in the face of a government interest in paying off politically-connected unsecured creditors ahead of the senior creditors. There is no other reason for Brandeis to make that decision, as only government could insert itself into the contractual relationship during a bankruptcy proceeding — just as Obama has done with Chrysler.

Lauria’s argument seems very compelling here, especially given Brandeis’ rather clear assertion that bankruptcy proceedings have to fall within the 5th Amendment — and that government can’t implement a taking to satisfy its own arbitrary aims by ignoring the relationship of the creditors to the default. We’ll see whether the court rebukes Obama.

From Think Progress:

Check out these "bullying, thug tactics" used against the bankers.

This guy is a class act. The Eddie Haskell of modern politics and the left beams with pride. Suckers....

Obama threatens bankers: I’m the only thing standing between you and the pitchforks
posted at 3:30 pm on April 3, 2009 by Allahpundit


Alinsky + Chicago = mob-tastic! My dad used to know guys like this growing up in lower Manhattan. Free advice from him to me to you: If you’re strapped for cash and one of them offers to help, decline.

President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.”…

“The only way they could have sent a more Spartan message is if they had served bread along with the water,” says a person who attended the meeting. “The signal from Obama’s body language and demeanor was, ‘I’m the president, and you’re not.’”…

The president spoke of public outrage over the high flying executive lifestyle. “The anger gentlemen, is real,” Obama said. He urged pay reform and said rewards must be proportional and balanced, and tied to the health and success of the company.

Slublog sums it up: “So let me see if I’ve got this right. The Democrats helped cause the crisis through bad policy, fanned the flames of outrage against CEOs and Wall Street and are now saying they’re the only ones who can protect the CEOs from all of those angry people out there.” Indeed, and all they have to do to earn that protection is fire their CEO or whatever else The One demands. Refuse — and if you follow the link, you’ll see that some of them actually want to return their TARP money — and they risk a visit from Timmy the Chin.

Anyone recognize the phrase “the anger is real,” though? The last time Obama used it was in his speech on race to back off all the haters who thought, inexplicably, that a would-be president should have piped up about Reverend Wright sometime in the course of 20 years. Evidently it’s a favorite formulation when he wants to lean on his audience. In which case, if he’s so worried about pitchforks, instead of creepily exploiting the threat of mob violence to centralize the economy, how about our modern-day Lincoln gives a speech asking Americans to cool off before bailout fatigue leads to someone getting killed? After all, the anger really is real.

A democrat lawyer who donated $10,000 to the DSCC, is threatened by the attorney representing the White House and your accusing him of an attack for telling his side of the story?? Nice headline. Interesting logic.
If your wife was raped would she be attacking the rapist if she reported it?

Wow, this was just released today.

More allegations. And notice two of these guys claim to be Obama voters.

White House Accused Of Chrysler Threats

I wouldn't worry, the Obama media will destroy these guys, personally of course.

This is a brilliant article! You won't see the always objective responsible journalist of ABC, CBS, and NBC touch this one.

Can Obama Be Called an Economic Fascist? - HUMAN EVENTS

A couple more obviously non partisan articles and I for one may turn against the prez and the dems

Almost there after all the damning evidence coming out...Keep 'em coming fire

__________________
Dr. Spaceman: Now Jenna, medically speaking for your height your weight puts you what we call the "disgusting" range. Fortunately there are solutions. For example, crystal meth has been shown to be very effective. How important is tooth retention to you?

Do I detect a small hint of sarcasm?

Here's another editorial about the president being between them and the
pitchforks. Can anyone honestly expect better from a community organizer
that was personally trained by Saul Alinsky? It's painful to know without a
doubt that his is only the tip of the ice berg.

BO To Control Banks Permanently

Posted by Bill Hennessy on April 5, 2009 under Limited Government

The BO administration has no intention of relinquishing dictatorial
control of the banks according to financial expert Stuart Varney.

The government wants to control the banks, just as it now
controls GM and Chrysler, and will surely control the health
industry in the not-too-distant future. Keeping them
TARP-stuffed is the key to control. And for this intensely
political president, mere influence is not enough. The White
House wants to tell ‘em what to do. Control. Direct. Command.

While naive school children and their communist professors will respond,
“Oh, he’s just managing a crisis caused by the last administration,” any
intelligent student of communist history knows that the president is following
Marxist strategy to the “T.”

• Create a crisis
• Position yourself as savior
• Force surrender of power
• Threaten to unleash populist violence
• Marginalize enemies
• Repeat until the will of the people is broken

If you think the president represents run-of-the-mill Democrat liberalism, think
again. Our president is as Marxist as Lenin, Castro, or Mao. His tactics will
become increasingly threatening and violent as we continue to surrender
power to him.

Last week, the president threatened bank executives with mob brutality:

“My administration,” the president added, “is the only
thing between you and the pitchforks.”…

In other words, the president admitted that he controls the thugs and criminals
who have been threatening AIG executives. He intentionally leaked this
story to us, the people, so that we know better than to resist his control.

Too bad. I resist his control.

the president is a Marxist thug. He’s setting up a confrontation with the American
people and 230+ years of liberty. Be prepared for battle. Don’t allow this
panty waist punk to intimidate you. It sounds like Varney has already
thrown in the towel:

After 35 years in America, I never thought I would see this. I
still can’t quite believe we will sit by as this crisis is used to
hand control of our economy over to government. But here we
are, on the brink. Clearly, I have been naive.

yeah, and the moles have a little pile of trash over east of Crossroads Mall
8^)

Marxist or Machiavellian or just damned effective political strategy. I haven't read Marx, so I'm not an expert in that area, but there's nothing inherently collectivist about that sort of a strategy. What's there is a good method to position yourself into a position of power. What you do after that is anyone's guess.

Don't worry too much, the trial lawyers will defend you.

What damning evidence? What exactly was said to these finance people? This whole thing reads like typical Drudge/Newsmax right-wing sensationalism.

Let's go back to a quote from Tom Lauria in the first Clusterstock blog that was linked:

What exactly was the 'direct threat'? I don't believe for a minute that someone from the Obama administration said to someone from Perella Weinberg, "Get on board or we'll have the White House press corps destroy your reputation."

Now, someone might have said something like, "If your intractability on this leads to Chrysler's bankruptcy and a lot of jobs lost, it's going to reflect negatively on your public image." But frankly, I doubt even that was said. Perella Weinberg doesn't have a public image, and within its own professional circle, forcing Chrysler into bankruptcy to recover as much of its investment as possible would reflect favorably, not negatively.

And as we get in to the follow-up posts, we still don't know exactly what was said, or if Lauria was present when it was said. And the fact that he's now backpedaling doesn't help his credibility, either. And if we go back to the quote I just posted, there are the weasel words 'in essence,' which I suspect translates roughly to 'didn't.'

The 'economic fascist' article is similarly loopy.

Does anyone here want to disagree that Chrysler 'moved too slowly to adapt to the future,' and that it designed and built cars 'that were less popular, less reliable, and less fuel efficient than foreign competitors'?

Anyone here want to stick up for Chrysler technology? Anyone here want to say with a straight face that Chrysler builds better cars than Toyota, Honda, Volkswagen or whoever?

Did you know the only new car Chrysler debuted this year was an SUV? Hello?

"I would love to get the U.S. government out of the auto business as quickly as possible." - Barack Obama, last Wednesday

This is the very basis of free enterprise only if you happen to be a lender. I quote Republican speechwriter and commentator Kevin Phillips here frequently, but he was the one who warned twenty-odd years ago where America was headed by making finance the center of the economy, as Holland, Spain and Great Britain had done previously. And the events of the past ten months or so have proven him right. Our economy is not built solely around lenders, or as this guy would apparently prefer, the even more narrow class of senior debt holders of US automakers.

If you take the Forbes 500 list, and subtract Chrysler and GM, you are left with 498 large companies for which the government has not replaced the CEO's. If you take out the big banks, you're still left with about 475 big companies for whom the government has not tried to limit executive compensation.

That's because CEOs of companies like Disney, Apple, Microsoft, Time Warner, Chesapeake, ExxonMobil, GE, etc., etc., ad infinitum, haven't come to the government with their hands out saying 'give us money,' and then, having received the money, stood there with their thumbs up their butts and no plan to do anything but what they'd been doing all along.

And let's not forget the tens of thousands of smaller companies that are out there, with no one from Washington trying to fire their CEOs or limit their bonuses.

As George W. Bush was fond of saying, "I took an oath to protect America." Obama took the same oath, and the America he's sworn to protect is not just senior debt holders, hedge fund managers and multinational bankers.

This seventh most popular talk show host in America needs to get a grip.

Thanks for your analysis. I know its not nearly as interesting as attacking someones personal opinion on social matters.

Nothing I posted came from NewsMax.

This action, if not overturned by the judge, will be a real confidence booster for investors. Knowing the King....er .... I mean President can step in and attack and discredit the majority stakeholders in a company and give them pennies on the dollar, and turn precedent on it's head. This is chilling.

I said it once and I will say it again. I am moving to the first state that opts out, even if it means armed conflict. I have a way of life worth fight for.

__________________
Oklahoma City - The surprise your family has been looking for.

Mostly, you hold press conferences and tell the public the exact opposite of what your actually doing. Some people call it lying.

Rush actually predicted this last December.

See, I Told You So: Obama Gives UAW the Majority Stake in Chrysler

I know why the left hates him. He's really good.

Some people call what you're doing "guessing."

Maybe someone can clarify another point for me.

Chrysler is now in bankruptcy, which is the way this would have probably played out had the White House not been involved at all. So the system is working as it normally would.

The White House tried to avoid bankruptcy with an extraordinary (in the strictest meaning of the word) plan that would have required the participation of all the stakeholders. Some of the debtholders balked at that plan, so Chrysler is now going the bankruptcy route.

Do I have all this right? And if I do, doesn't that mean that what Perella Weinberg and others objected to was not the 'socialistic' implications of the White House plan, but the fact that the 'socialistic' implications didn't benefit them to a greater degree and other stakeholders to a lesser degree?

Have I missed a point here?

The point is that the White House and the government should have done
nothing in the first place. Unless a company is breaking the law, then,
private business isn't the governments business.

This.

I would generally agree with that. However, I believe it was private business who cried to the government about getting bailed out of their self-created messes. If they don't want the government involved, then they should have asked the government for help. Private business wants the government's help without any accountability.

The government should have said, "no!" Private business isn't the business of
the government.

They should have asked Fannie Mae or Freddie Mac banks for loans!

Prune,

That sounds like Ronald Reagan when he's speechifying but not exactly the Reagan in practice.

Were you screaming during the Reagan years about the exact same problems?

Reagan not only continued a bailout to Chrysler, he helped push through legislation to restrict Japanese imports to assure our auto companies would profit. That's not exactly laissez-faire. Even one of Reagan's biggest supporters - the CATO institute - complained about this action.

At lobbyists behest Reagan helped Lockheed survive by ordering planes considered unnecessary in the eyes of CATO.

During his term Reagan also bailed out the banks by sending $ 8.4 billion to the International Monetary Fund.

Plus many of the things we're discussing in threads above and below this one were encouraged during the Reagan years - establishment of tax havens, subcontracting to overseas call centers, protecting the multinationals at every turn. See below

The Reagan Administration and Multinationals

I disagreed with bailing out Chrysler. CATO was right. Although, Ronald W.
Reagan was the greatest president of the 20th century, he wasn't perfect.
Just almost.

Many, many people criticized Reagan when he was president. Some pretty viciously. We heard all about his naps, etc. It still astonishes me how many true believers have popped up in the past ten years. I'm not saying people on this board are that way but honestly, my image of Reagan was of a President frequently under fire. Now, he is the second coming. Time does a lot of things to reputations.

The country is drowning in trillions of dollars of debt and you guys are still arguing about a few billion dollars here and a few billion dollars there. Prune, GWB, and some of my fellow conservatives - the American left, for the most part, doesn't think the US Constitution still applies today. They gave up on the bible 40 years ago so it was only a matter of time before they gave up on a human institution as well.

Colin Powell had it right, a lot of Americans do want more government involvement in their life, not less. We have raised 3 consecutive generations of people increasingly dependent upon government for their very existence. For the 48% of us that still believe in the principles our founding fathers espoused in the US Constitution, we are having a decreasing amount of options available to us. Eventually, we will only have one option left, session. I say we get on with it.

__________________
Oklahoma City - The surprise your family has been looking for.