special inspector general for the troubled asset relief program which is conducting a review of the auto task force's work. and i'm very pleased to know that you are willing to submit yourself to being interviewed. i recognize that there are -- that you all are private citizens now and are under no obligation to speak with the inspector general. we support the inspector general's office and want them to complete their work. as i understood it, this was the principle reason we were holding to day's hearing. however, in preparing for the hearing, my staff contacted each of these three former officials and all three of them said what they said today, they are now willing to be interviewed. the chairman has apparently decided to go forward with today's hearing and that's his right. but as a result, we do not have the benefit of the inspector general's final report which i anxiously look forward to. i think this could have been

handled with a few phone calls rather than a hearing. but that's not my call to make. mr. chairman, if you're going to proceed, i know you are, i ask that you do so on an even handed basis. there's another issue almost exactly like this one in which an inspector general has conducted a review and sought to interview a former official and has been refused. unlike the present case, however, there are substantial evidences of abuses and illegal conduct in that case. on two occasions have written to the chairman about findings by inspector general of the national relations board that a former board member mr. peter stromberg was receiving deliberative and inside information from another board member mr. peter flynn. the inspector general warned that mr. stromberg received copies of draft board decisions and other deliberative information on pending board actions yet the inspector general was never able to conduct an interview of mr. stromberg who was a former

employee. it seems to me that only difference with that case is that it involved a republican. mr. stromberg served as a senior adviser and co-chair of the labor policy advisory group to presidential candidate mitt romney when he was engaged in these activities. as i stated from the offset, i strongly support our inspectors general and i believe our committee should help them when they cannot obtain access to information. so mr. chairman, i know how the interviews go and will you support my request for a hearing with mr. shomberg to attain his testimony? will you join me in requesting that the economy cacommittee ca before us like you call these three gentlemen before us today and commit to conduct the actions of this committee on an even handed base sn eed basis? >> at the beginning of this hearing, i went through significant amount of this time

line. i will be happy to look at the letter that you presented this morning. i recognize that i was not on that exchange. i'm not familiar with the subject matter you're bringing up. but, you know, i trust the gentleman has deep and abiding interest in government transparency. he's been diligent and a tough but fair ranking member in my dealings with the gentleman having served on his subcommittee and my first term in congress. and i thank you for bringing this subject matter up. i will be happy to look at this issue. >> may i have another 20 seconds? >> yes. >> i ask unanimous consent that my two previous letters on this topic be entered into the record. we've been asking -- >> without objection. >> mr. chairman, i see no difference between these cases other than that the gentlemen here today all agreed to be interviewed by the inspector general. i want to thank you for your patience and thank you.

>> i thank the ranking member for bringing that subject matter up. miss romero to that end, have you contacted the committee about this subject matter and this witness? >> as regards to these three -- >> it's a different ig. i'm sorry. i was just informed of that. well, thank you. we will follow up with you on that. you have my commitment on that. with that, we'll now proceed to mr. ross of florida for five minutes. >> thank you, mr. chairman. you are to be commended for holding this hearing. as a practicing lawyer, find that justice doesn't always move at the rate we would like it to move. and the collection of facts is absolutely necessary for the rule of law to be applied and for justice to prevail. while we hear on the 11th hour and getting cooperation from the witnesses, i'm grateful for

their cooperation. mr. feldman, when you say it should have been done back in july of '09 when the deposition was taken you had better relection of the events, i think back to the witnesses i would have in my cases and grateful for discovery depositions because it allows for a person, it allows for a witness to recollect their thoughts and remember their testimony. again, i'm grateful for you all to agree now. let me go into some questions here. mr. bloom, you indicated in your opening that the bankruptcy proceeding was fair and open. my question to you is was it any different than any other normal bankruptcy proceeding? was this not one of the most expedited bankruptcy proceedings in the history of the u.s.? >> in my experience, it was faster than average. there are other 363 sales -- >> are you familiar with any other bankruptcies that were expedited in such a summary fashion? >> the sale of the parts of

lehman to barclay's and lehman bankruptcy, that portion of it which was a 363 sale which is what this was was done more quickly. >> and mr. feldman, you are familiar, in your experience, of any company independent going through a bankruptcy proceeding givinged 1 giving $1 billion to another company? >> certainly they honored a contract and made a decision to honor the contract based on a business judgment. >> how do you respond to that? >> well, first, i would say i have never seen a bankruptcy like this at all. i've taught bankruptcy for 15 years. i practiced bankruptcy. i've never seen a bankruptcy case in which secure creditors received 29 cents on the dollar and unsecured creditors received 44 cents on the dollar which is it what happened here. again, some of the secured creditors were other retirees, the indiana policemen and teachers and retirement union. i've never seen under the guise of a 363 sale which amounted to

effectively a plan of selling the company and dictating how the assets are going to be distributed. we also saw in this case was an auction that was anything but a fair auction of the assets. there were strings attached it to that basically required that anybody who bought -- >> was uaw that effective? >> well, that was also -- any other company -- anybody else who wanted to bid on the company was required to give preferential treatment to the uaw the same way the government did in respect of honoring the vbuz. of course we saw a lot of other shenanigans. i've never seen any bankruptcy case that resembled this in terms of the impact on the rule of law the way in which it scrambled around priorities and the speed at which they essentially sold the company and distributed the assets. >> thank you. mr. bloom, what role did the auto task force or other administration officials play in the negotiations between gm and the uaw?

in this bankruptcy? >> i think the role we played in that generally was the same role we played with most of the issues which is to say that general motors we deferred to general motors in terms of their business judgment about how to handle a particular matter. i think the uaw negotiation would fall into that category. but we reviewed that decision to see if we agreed that it was commercially reasonable. >> did the uaw have a great deal of leverage on these negotiations? >> it would be fair to say they had a degree. >> would they have derailed the deal over a salaries of a few? >> i can't speculate. >> mr. feldman? >> i think our judgment at the time was that judgment that's gm made were reasonable. >> mr. feldman? your opinion? the uaw exerted a great deal of lea

leverage in this negotiation? >> it is no different than any other participant. >> do you think they would have derailed the negotiations? >> i truly don't know. >> you would have to speculate. this is your forte. >> that is not my forte, my forte is how to move companies through bankruptcy. >> and never on speculation? >> i try not to. >> thank you. with regard to the pay back amount, let's say that. >> narrator: bush aunder the bu administration we give $20, gm pays back $20. in this particular example, it wasn't paid back. was that something that was never intended to come to fruition or was it just that we wanted a pay back, make sure we gave back what was paid under the obama administration? mr. feldman? >> i don't think that was the intention. the intention was to get paid back n the case of general motors, the stock price has not performed the way people hoped it wochlt one of the reasons that gm was deleavered was to hopefully help the stock price.

>> i see. my time expired. i yield back. thank you. >> i thank my colleague. we'll now recognize miss spear from california for five minutes. >> mr. chairman, thank you. i want to thank mr. feldman, mr. wilson and mr. bloom for being here as private citizens today and for recognizing that there is a responsibility as private citizens to support ones country. professor, you referenced shenanigans which i thought was an interesting term. i could think of a lot of shenanigans that went on with wall street in particular goldman sachs without others, would you call those shenanigans? >> i -- i don't know those in detail. but i certainly -- if i looked at it, i'd be willing to call them shenanigans. it would be possible. i've not looked as those in much detail as i have with respect to these auto bankruptcies. >> well, with goldman sachs,

they actually created a product for a specific individual who wanted to short them and then sold those products as if they were good out standing products. those, to me, that kind of conduct is shenanigans. i think a company going bankrupt is not actually shenanigans or trying to keep it alive is not necessarily shenanigans. let me ask you mr. wilson as you noted in your testimony, you're a life long republican and proud of it, no doubt. and you were the republican conservative and independent party nominee for new york state's comptroller, is that true? >> yes. >> the work did you to rescue the u.s. auto industry was about doing what was best for the country, was it not? >> yes. >> at any time did you detect that persons on your team were pursuing a political agenda? >> no. >> were you attempting to push a

particular political agenda? >> only to save as much taxpayer money as possible. >> oh, what a novel idea. to save taxpayer money. is that what you were engaged in doing? >> yes. >> okay. is it true that you were working to stave off a potential collapse of a very large and interdependent u.s. automotive industry and deferring to the company's business judgment regarding many of these detailed decisions? >> yes. >> so as you look back at your time, would you say that you regret having done anything as a member of that task force? >> i wouldn't say -- i mean we can always do a better job. you always have second thoughts and wish did you better in anything do you in lichfe. certainly i feel we did the best we could given the circumstance and timing. i think it was the right thing for the country. >> so you are proud with what happened? >> yes. >> how about you, mr. feldman? >> i think i said in the opening

remarks that i remain fiercely proud. i think what we did was with a lot of help from a lot of other people in the government and at the companies pretty spectacular for the companies, frankly. >> mr. bloom? >> yeah, i would just echo my former colleagues' comments and emphasize mr. feldman's point. there were a lot of people who worked extremely hard on this matter. i think collectively a very good result was achieved compared to the alternative. >> now each of you is going to now provide a deposition to sig-t.a.r.p. on your activities. we also have a jao report that has been completed that suggests that there was nothing underhanded. have you read the jao report? do you have any comments on that jao report? any of you? >> i read the jao report. i suspect my colleagues have as well. i didn't take issue with anything in the jao report. overall it was a very good job.

>> anyone else with comments? >> i wouldn't disagree. >> i yield back, mr. chairman. >> thank you. i want to thank the chairman for yielding the gavel to me during this period of asking questions. want to thank the ranking member mr. quigley, this is a booip bipartisan issue. the topic of this hearing is not the auto bailout, the questions are whether or not it should have been done or shouldn't have been done. the topic is the delphi pensions, those who did not receive the topup or the pension or in fact had their pensions reduced and the involvement of the auto task force and these three gentlemen and refusal to participate in. that the jao report did not have information for determining their role or responsibilities. and mr. bloom, you said that you've testified a number of time. as you acknowledged in your own testimony, did you not testify concerning this topic because you claim that there was on going litigation that would

prevent you to stand in front of congress and tell the truth. mr. feldman, do you have a medical condition that affects your memory? >> i do not. >> great. thank you. because i -- in your testimony, you have like foreshadowed you might claim you don't remember this stuff. when you go before sig-t.a.r.p. but when you ask the other questions asked of you in this committee, i would want to invite you to have a refreshed memory because of two things, one, when we pull up your law firm's advertisement of what do you, not only do they recognize that you have a practice that is complex litigation, assuming that clearly you recall it, but the very first thing it tells is in march 2009 you were recruited to serve as the chief legal adviser for the strategy to restructure and recapitalize general motors. so if your clients can avail themselves of the knowledge they, have we want to also. mr. bloom, you testified before this hearing on this committee

on the regulatory affairs subcommittee on june 22nd, 2011. at that hearing i handed you a three pages of questions. my staffer andy who is going to hand them to you again handed them to you at that hearing. do you recall receiving these questions? >> yes. >> okay. i asked you if you would answer those questions and let me refresh your memory as to what you said. here's the video of you at that hearing. >> i presented both of with you a list of questions. mr. bloom, you received 25. you received 30. i'm going to ask for your commitment that you review those questions and to the best of your ability provide me with answers. do i have that commitment? >> i will. >> absolutely. >> thank you. >> mr. bloom, your answer to me on june 22, 2011 was absolutely. i have not received one answer from you. why haven't you haens eanswer m? >> subsequent to the time before

i had to answer, i left government service. >> so your answer changed because you left government service? >> i did not feel it was appropriate that i continue to involve myself in this matter after i left government service. >> you know, this committee views that otherwise. as do the taxpayers. you had great responsibility as also your current firm indicates an advertise you as the senior adviser at the u.s. department of treasury and helped the restructuring of general motors. it's your accountability to the taxpayers. will you commit, as did you in that hearing to answer these questions today? >> i'm here today if, there are questions i can answer, i will do it. >> will you commit in writing to answer these questions as did you under oath in that hearing on june 22nd? >> i will answer the questions i can answer today. >> so we'll just keep you here and orally ask you the questions with the chairman's approval then. mr. feldman, we have a number of

your co-workers e-mails that also can help you refresh your recollection. when we get to the sig-t.a.r.p. reason for wanting to speak to you, miss romero states that sig-t.a.r.p. believes they played a role in the pension decision and these individuals' failure to speak on this issue poses a significant obstacle. mr. feldman, do you agree that you played a role in the pension decisions? >> i don't think i agree that i played a role in the pension decisions. i certainly spoke regularly to the pbgc and to general motors regarding the delphi pension issues. >> did you ever speak to people at the white house concerning this issue? >> brian dietz who was at that time at the white house was a regular member of our team and the team reported to larry summers and tim geithner and dr. summers was at the white house at that time.

>> could you please put up slide six? this is joseph house. his e-mail reporting that you made progress discussing our proposal with key folks at the treasury and white house and is not yet wrapped up his coordination. this would be the issue of the pensions. pbgc's e-mails indicating we have several, including this one, that indicate your role as on the auto task force of coordinating the issue of the pensions. do you disagree with this e-mail? >> i don't disagree i was the coordinator or facilitator of those issues. i think that's accurate. >> then what was your role that you just said a minute ago you didn't have one? >> i think you asked whether i was a decision maker. i was not a decision maker. >> i asked you to describe what your role was. will you describe that role? >> i was the facilitator,

coordinator of issues between general motors and pbgc and other roles regarding the delphi pension issues. >> and how does that role assist or effect pbgc and its participation in the bankruptcy process and in the decision affecting the pensions? >> the decision that pbgc made with respect to the pensions was independent of anything that treasury or i had to say to the pbgc. the issue vis-a-vis the pbgc and delphi was what claims the pbgc would have in the delphi case, what liens they would purport to have over assets of delphi, particul particularly the foreign assets and that had an impact. >> you played a role in determining the either claiming or releasing of pbgc liens on general motors, delphi assets in

the bankruptcy process with respect to these pensions? >> that's not correct. >> that's what i heard you say. please clarify. >> let me be very clear. i urged the pbgc to come to decisions in a rapid manner because it had the potential to hold up general motors emergence. but i did not advocate for positions vis-a-vis the pbgc. i played the role of a facilitator or mediator, if you will, between the pbgc and general motors. >> my time expired. mr. quigley? >> thank you, mr. chairman. good morning. >> good morning. >> your audit tried to identify some of the factors that went into gm's decisions to top up some pensions and not others. that's correct, right? >> it did. >> your december 2011 report states, and i quote, treasury deferred to gm's business judgment and treasury did not complicitly approve or disapprove of gm providing

top-ups. so it would appear in your report that delphi pension matter was decided by gm without treasury influence? >> yes, we reported that while treasury played a significant role in resolving the delphi bankruptcy as they wanted that resolved as quickly as possible as new gm emerged from bankruptcy, they played an advisory role with regard to the pension plan issues as laid out in court filings and in interviews with gm, pbgc officials and treasury officials. i think an example of that is in a court filing that shows that treasury assumed gm would be honoring the hourly plans up nil the was informed in june that it could no longer do so because of the financial burden. >> okay. in your mind and what you wrote, what were the factors drooiivin gm's decisions? >> according to a gm official

that we spoke to and the public records that we reviewed, gm considered the dependcy on the uaw for the workforce. they were heavily reliant on that workforce. and so emergings from bankruptcy, they wanted to make sure they had a motivated and intact workforce. they also considered other costs and risk factors and weighed that against emerging from bankruptcy in terms of what type of cost and risk they wanted to take on. >> and did you find any evidence that delphi's pension decisions were anything other than gm's private business decisions? >> again, the court filings, treasury officials, pbgc officials, gm officials stated that treasury played an advisory role. i would note however in conducting our work we coordinated with sig-t.a.r.p. and our report focused on a broad range of things including the events that leading to determination of treasury's role but we did not conduct an investigation as sig-t.a.r.p. was doing and we did not

interview the former officials here today. >> is there anything else you want to add related to the gm decision making process and the questions i've asked? >> no, sir. >> all right. thank you. i yield back. >> i thank the ranking member and certainly appreciate his line of questioning as well. we'll now recognize mr. kelly of pennsylvania for five minutes. >> thank you, mr. chairman. thank you for holding the hearing and allowing me to participate. i have a question. mr. bloom, i've been with you before and other hearings. when we talk about the boards and we talk about gm making decisions, is the consensus that these are gm board decisions that were made involving the uaw? >> i think it would depend on the decision. >> but specifically with this one when it comes to pensions and picking and choosing who would get bailed and who would not get bailed out? >> i couldn't say whether general motors management specifically brought this issue to their board of directors or

not. i wouldn't know. >> did you sit on the board of directors of general motors? >> no. >> you were part of the auto task force? >> yes. >> okay. and the board of directors, again, the old gm versus the new gm mr. are two completely different entities there as we know. a lot of the new general mote wrorz were appointees by the administration. let me ask you this, mr. wilson in, your testimony, i think this really makes a lot of sense. you talk about what happened with this and you say on page two, the results of the work is from general motors at its most profitable year ever in 2011 even though auto sales have not fully recovered. i know we talk about the auto industry come roaring back. do you know what gm made in 2011? >> i think under $8 billion net income. >> how much tax dz thes did the? >> i don't know. >> i'll tell you what it is. it is zero. zero. and maybe professor you can tell us why they paid zero taxes on almost $8 billion in profits.

>> sure. yes. this is another anomaly about these case that's are very irregular which is that treasury department issued essentially a special ruling for t.a.r.p. recipients that allowed them preferential treatment under the tax code in order to carry forward net operating -- >> preferential treatment, can we say on the street where we call that picking winners and losers and who gets to take advantage of things that were not available to others in bankruptcy? >> i think that is a very accurate description, yes. >> so $7.1 billion. >> i'm a general motors dealer, by the way. i'm happy when they make money. the president always talks about the 99% and 1% and how the 1% is not paying their fair share. almost $8 billion profit and they didn't try to put anything back in? that's offensive to me as a taxpayer. i know during the bailout as a dealer, i didn't get one cent. in fact, i was at risk of lose mig dealership. you know the answer was, you no what? good luck. can you make fit you really work hard. we made it. i understand that. but when we talk about this auto

industry roaring back, we're talking about an industry that had 16.5 million sales every year. so the roaring back comes as a result of the fact that cars like people age. cars like people can't perform at the same level they had when they were newer. there is a thing called a scrapping rate taking place. so the roaring back really is a result of a diminished market the last three or four years. yeah, it's going to come roaring back. i think right now the projecting somewhere, some people say 13.5 million units a year. some 14.5 million units a year. but a guy on the lot talking to people, what is keeping it from roaring back is they're not sure what the future holds. so i think it's important that we really take a look at what did happen in the auto industry? i got to tell you, mr. wilson, i know you're a good republican. i know that you're very harolded

for what you do. and without objection, i would like to enter into the testimony from city and state an article talk about wilson tapped teamsters to rescue an ailing trucking company and union jobs. >> without objection, so ordered. >> you do a good job at what do you. there is no question about that. i think people in the private sector, zint mit doesn't matter political affiliation you have. i want everybody to come in and avail themselves of the fine products that general motors offers. listen, so you do have close ties. you're going to try and help the trucking association, too. they're also in a very bad shape right now, are they not? >> yes. in that particular deal we completed that restructuring in july of 2011. >> so they're back on their feet and recovering. my real question, i guess it comes down to how do we pick those we bail out and those we don't? >> as a government or as a

private sector? >> as a government. knowing the private sector funds all these decision that's we make. >> sure. i philosophically, the way i look at it is it's almost never acceptable for the government to intervene in the private sector. and i've gotten ribbing from friends of mine with philosophical similarities about why it was okay in 2009? it is because we were on the edge of the abyss. >> let me ask you one thing. so the bailout was to keep general motors from going bankrupt, right? >> i think the rescue was done to save the entire american auto industry from going out of business. >> all right. so the market would be the market. the industry bears on its own. professor, the length of the gm bankruptcy, how many days? >> i don't remember exactly. it is like 30 to 60 days from beginning to end. >> so one of the biggest bankruptcy cases ever is solved