White House threatened to destroy banks reputation?

[StorminNorman]

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation*

May 02, 2009 3:17 PM
A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.
The White House and a spokesperson for the investment bank in question challenged the accuracy of the story.
"The charge is completely untrue," said White House deputy press secretary Bill Burton, "and there's obviously no evidence to suggest that this happened in any way."
Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.
Lauria first told the story, without naming Rattner, to Frank Beckmann on Detroit's WJR-AM radio.
Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence."
A Perella Weinberg Partners spokesperson told ABC News on Sunday that “The firm denies Mr. Lauria’s account of events.”* The spokesperson would not elaborate.
Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. The firm is led by Joseph Perella. On Thursday afternoon -- after the Wedneday deadline -- the portfolio manager for the Xerion fund decided to join the larger four creditors who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.
Those four financial institutions - JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs -- are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate.
Someone familiar with the Perella Weinberg Partners' portfolio manager's thinking told ABC News that the decision to go along with the government plan "was based on an assessment of investment risk and reward and nothing else."
Lauria said his clients "are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt" with Chrysler.
President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.
"While many stakeholders made sacrifices and worked constructively, I have to tell you some did not," the president said. "In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none."
Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said.
President Obama also said of Lauria's clients, "I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices."
"He stands my clients up as basically the reason Chrysler is going into bankruptcy," Lauria said. "He wrongly says they're not willing to make any sacrifice. And then he says he does not stand with us."
Lauria said the president saying he doesn't stand with his clients "kind of sounds like 'You're fair game.' In whatever sense. People are scared. They have gotten death treats. Some have been told people are going to come to their houses. God forbid if some nut did something, I'm just wondering how the president would feel."
The Miami area-based attorney describes himself as an independent, and says after waiting in line for six hours last November he ended up not voting in the presidential election. He donated $10,000 to the Democratic Senatorial Campaign Committee in 2008 and $1,000 to then-Sen. Hillary Clinton, D-NY, in 2006.
-- jpt
* This post was updated with first the White House's, and then Perella Weinberg Partners', statements.

Troubling if true...

 

[Matt]

More than troubling...down right scary

 

[SuBe]

Not Surprising at all. How else are they going to gain more power unless they make Capitalism the Enemy? Oh, wait, they are already doing that...

 

[StorminNorman]

Obama: The morals of Nixon, the intelligence of Carter?

 

[VampElvis]

UH-OH, fair game? Did I hear fair game? You know what that means.....

You heard it here on the Hype first folks.
Obama is a Scientologist!!!!!

 

[The Major]

Banks had a good reputation? When?

 

[El_Citrus]

Is it weird to feel the urge to take a shower after reading almost any report coming out of Washington for the past *Starts counting on fingers......runs out of toes* years?

 

[bell110]

It's a lose-lose situation, just let them go under already.

 

[hippie_hunter]

Banks had a good reputation? When?

I really don't see this as a laughing matter. This reeks of a Bush-like tactic which is something that Obama should be above considering how he promoted himself during the campaign.

 

[The Major]

I really don't see this as a laughing matter.

It's a laughing matter since the banks never had that good a reputation. They sure didn't do themselves any favors by blocking that bill for helping home-owners this week.

http://www.huffingtonpost.com/arianna-huffington/why-are-bankers-still-bei_b_194242.html

Let's start with bankruptcy reform. The banks scored a lopsided victory on Thursday when the Senate rejected an amendment that would have allowed homeowners facing foreclosure to renegotiate their mortgages under the guidance of a bankruptcy judge. The measure would have helped 1.7 million homeowners keep their houses, and preserved an additional $300 billion in home equity.

They'll destroy us all with this short sighted behavior.

This reeks of a Bush-like tactic which is something that Obama should be above considering how he promoted himself during the campaign.

The banks bought it on themselves. They broke this economy, now Obama needs to lay the law down to fix their mess. He promoted himself as a uniter but he always came across like he would step up when things didn't go as planned. Obama is not a person anybody can push around with impunity.

 

[chaseter]

Change has come to Washington!

 

[hippie_hunter]

It's a laughing matter since the banks never had that good a reputation. They sure didn't do themselves any favors by blocking that bill for helping home-owners this week.

http://www.huffingtonpost.com/arianna-huffington/why-are-bankers-still-bei_b_194242.html



They'll destroy us all with this short sighted behavior.

The banks bought it on themselves. They broke this economy, now Obama needs to lay the law down to fix their mess. He promoted himself as a uniter but he always came across like he would step up when things didn't go as planned. Obama is not a person anybody can push around with impunity.

Of course Obama is not a person to push around, but I honestly think that if Bush were doing the exact same thing, you'd condemn him for it. I honestly don't get this logic of people acting excusing Obama for every thing or supporting something that would be condemned if it were another President.

 

[The Major]

Of course Obama is not a person to push around, but I honestly think that if Bush were doing the exact same thing, you'd condemn him for it.

If Bush had done this I'd be agreeing with him. You're forgetting another factor in this situation, as well. Competency and transparency. Obama has done this much better in 3 months then Bush did in 8 years. This can effect how well a good policy is executed.

I honestly don't get this logic of people acting excusing Obama for every thing or supporting something that would be condemned if it were another President.

You're not grasping why Democrats don't like Bush. It wasn't who he is that we dislike about him, it's his actions.

 

[hippie_hunter]

If Bush had done this I'd be agreeing with him. You're forgetting another factor in this situation, as well. Competency and transparency. Obama has done this much better in 3 months then Bush did in 8 years. This can effect how well a good policy is executed.

Bush was a bad President, but Obama isn't that good either.

You're not grasping why Democrats don't like Bush. It wasn't who he is that we dislike about him, it's his actions.

Yeah so? I honestly know why Democrats hate Bush. He was an ******* towards Democrats. But I find it to be incredibly hypocritical when people go off excusing or supporting Obama, yet they would have condemned Bush if he did the exact same thing.

It's rather disgusting IMO.

 

[chaseter]

I agree 100% hh. I was not a fan of Bush by far but for the people that were constantly bashing him to turn around and do the same things they were calling him out on is hypocrisy and it is disgusting that people throw that off as alright or agree with those things just because it is Obama or just because they are democrats.

What has Obama been transparent about Major? He passed the stimulus bill that nobody read until after it was passed. They were doing stress test on banks but now that won't be released. The deals with the unions and the auto companies were not public until it already happened. Obama to me is just another politician and the only things he is bringing to light to create transparency in Washington is tools used to bash Bush and the Republicans. He released on the memos regarding torture but didn't release what information they got until after he got called out on it. And, now they are being accussed of threatening people.

 

[bell110]

Seriously, why do people actually believe what that lawyer said? Everybody seems to automatically taking his side of the story. Even the spokesperson for the bank being threatened denies what happened.

Personally, I see this as a cleaver strategy on Lauria's part. Publically complain that the White House is bullying rich people to try to drum up more anti-Obama sentiment that is already brewing with the teabagging parties fresh in people's minds and use that for leverage to get the $.50 on the dollar that they want for their clients. I say **** them, let them get $.00 on the dollar.

I mean, who has the bigger reason to lie here?

 

[Schlosser85]

Right, everyone seems to be automatically assuming this is true.

 

[Victarion]

I mean, who has the bigger reason to lie here?

Washington; this is how we deal with finances for the staggering numbers of alleged domestic terrorists.

 

[hippie_hunter]

Seriously, why do people actually believe what that lawyer said? Everybody seems to automatically taking his side of the story. Even the spokesperson for the bank being threatened denies what happened.

Personally, I see this as a cleaver strategy on Lauria's part. Publically complain that the White House is bullying rich people to try to drum up more anti-Obama sentiment that is already brewing with the teabagging parties fresh in people's minds and use that for leverage to get the $.50 on the dollar that they want for their clients. I say **** them, let them get $.00 on the dollar.

I mean, who has the bigger reason to lie here?

We're not automatically assuming that this is true. We're just saying that if this is true, this is a really horrible thing.

And of course, if it were another President, liberals would be jumping all over this one. Just like how they jumped over Bush going AWOL and whatnot.

 

[StorminNorman]

Major, you REALLY don't have a problem with a President threatening to abuse his position so he can intimidate a political enemy to join him?

 

[Matt]

No, Major doesn't have a problem with a DEMOCRATIC president threatening to abuse his position so he can intimidate a political enemy to join him.

 

[moraldeficiency]

Wouldn't this be like telling a convicted multiple child molester that you'll tell the neighbors they don't recycle?

 

[SuperT]

What possible reputation do they still have that they're afraid will be tarnished?!?!? lol

 

[StorminNorman]

I have to question the intelligence of anyone who thinks this (if true) is a laughing matter. This is as much an abuse of power as anything Bush did.

 

[StorminNorman]

Wouldn't this be like telling a convicted multiple child molester that you'll tell the neighbors they don't recycle?

...no. Not at all.