May 28 2009

Obama’s “Dealergate” Scandal Needs Investigation

Published by at 10:06 am under All General Discussions

Major Update: Two US Senators are now asking for details on the decision process – one from each party!

U.S. Sens. Claire McCaskill and Kit Bond wrote a letter Friday to President Barack Obama’s auto task force seeking answers to concerns raised by Chrysler and General Motors dealerships in Missouri that learned last week their contracts will be terminated.

Auto dealers statewide have expressed frustration to McCaskill and Bond about the lack of information they have received from Chrysler and GM, saying they didn’t know the criteria used to make the contract termination decisions.

The two Missouri senators asked the task force for the criteria used to determine how many and which dealerships would be terminated, as well as the process for dealerships to appeal decisions.


That is good news. Now the news media will have to report on the story – it is bipartisan after all. – end update

The Obama administration’s heavy handed foray into the corporate world of the automakers is rapidly turning into a Class A scandal. More news is out today on the questionable process used to determine which dealerships would be closed and which ones would reap the remaining business:

Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

Florida Rep. Vern Buchanan learned from a House colleague that his Venice, Florida, dealership is on the hit list. Buchanan also has a Nissan franchise paired with the Chrysler facility in Venice.

“It’s an outrage. It’s not about me. I’m going to be fine,” said Buchanan, the dealership’s majority owner. “You’re talking over 100,000 jobs. We’re supposed to be in the business of creating jobs, not killing jobs,” Buchanan told News 10, a local Florida television station.

When  100,000+ jobs are being eliminated, apparently based on political cronyism and who donated to which party, there needs to be an investigation into the process used by the Obama administration to determine which dealers would be closed down and which would reap the rewards by surviving.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

A lawyer representing a group of  Chrysler dealers who are on the hit list deposed senior Chrysler executives and later told Reuters that he believes the closings have been forced on the company by the White House

As part of Chrysler’s bankruptcy agreement with the White House, the company plans to close roughly a quarter of its 3,200 dealerships.  Lists of the dealerships being cut and those retaining their Chrysler franchises can be found here in pdf format. Many dealers contend the criteria being used to determine which dealerships survive is not clear and that many of those that are being closed in fact are profitable businesses, despite the current recession. 

There is only one way to determine whether politics played a role here. The US Congress needs to investigate how the decisions were made. The American people deserve to know who decided to close the dealerships and what the criteria was. We don’t need to be closing profitable dealers and tossing people out of jobs. That is NOT what the federal government is sanctioned to do by the US Constitution. In fact, the Constitution clearly states our rights, including the right to pursue life, liberty and happiness. The federal government is chartered to protect these rights, not remove them on a whim or because of political payments.

And if the Democrat Congress will not take up their constitutional charge, then the courts need to get involved and ASAP. 

This is the perfect test of Obama’s transparent government pledge. Let’s open the books, notes, memos, directions and meeting attendee lists to public scrutiny. Let’s get the people involved questioned under oath. Let’s do what should have been done and make sure that we are protecting the rights of Americans and not stomping on them so some rich Democrat elites can make even more money.

There needs to be an outcry from all Americans to find out the truth here.  More on “Dealergate” here,  here and here.

Update: From one of the links above:

Now, and this is important, Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”

Dealer Jim Anderer told Fox News’ Neil Cavuto he can’t comprehend how his dealership can be among those killed: he stated that his sales volume ranking is in the top 2 percent of all dealers.

Furthermore, Anderer says explanations aren’t forthcoming. “They won’t tell us. They seem to be running for cover right now because they won’t give us a solid explanation. They come up with all these reasons, but none of them seem to make sense… This is insanity. The government is stealing my business. And they’re telling me there’s nothing I can do about it… There was no process that you could put your finger on and say, ‘Hey, we cut 25 percent of the lowest performing dealers.’ They didn’t do that. Nobody will give us a real clear explanation of the formula that they came up with.” 

Answers MUST be forthcoming and there needs to be a full investigation with people under oath. The fact the answers keep changing is a clear sign there is something behind this story. More outrage noted here:

Increasing numbers of Chrysler dealers are disputing the bankrupt automaker’s claim that it selected dealerships for closure on purely economic grounds, and they have filed a suit against the automaker in U.S. bankruptcy court.

“My business is being stolen from me under the guise of the bankruptcy laws [and] given to another dealer down the street,” Jim Anderer, owner of Island Jeep in Lindenhurst, N.Y., told Reuters.

Other prominent Republican donors whose successful Chrysler dealerships will be shut down include Russ Darrow, owner of Darrow Chrysler Jeep of Menomenee Falls, Wis. Darrow spent $2.7 million of his own money to finance an unsuccessful challenge to incumbent Democratic Sen. Russell Feingold of Wisconsin in 2004.

Time to get the lawyers involved. My previous post on this breaking scandal is here.

Update: Someone has put together details on donations from shuttered dealers and their donations. Have no idea to the veracity of this info.

Update: Gateway Pundit has some intel on the Obama folks who where possibly in on the closing decisions.

The task force, headed by investment banker Steven Rattner, is comprised of Cabinet members and Obama administration officials who have extensive backgrounds in finance. They include Transportation Secretary Ray LaHood, Commerce Secretary Gary Locke, Energy Secretary Steven Chu, Labor Secretary Hilda Solis, Office of Management and Budget Director Peter Orszag and Environmental Protection Agency Administrator Lisa Jackson.

Ray LaHood is probably the best person to start questioning since I believe he is a Republican.

31 responses so far

31 Responses to “Obama’s “Dealergate” Scandal Needs Investigation”

  1. Frogg says:


    The pushback is not wholly convincing; the allegation is that Obama donors are getting a break, not necessarily generic Dem donors to, for example, John Edwards.

    However, it is almost surely true that most of the surviving dealers are also Republicans, so statisticians will be left to grapple with the question of whether two populations (the 75% that survived to close another day, which includes maybe 10% Democrats and a smaller portion of Obama donors) is significantly different from the 25% that were closed, which seems to be roughly 90% Rep with no notable Obama donors.

  2. gooseman says:

    I think it’s important to note that even if these allegations prove to be false, this is precisely the type of activity I would associate with an Obama administration.

    It’s involvement in the private sector has been heavy-handed at the least, and even thug-like in some instances. I know, I know, TARP began under Bush, but that’s no reason to continue this kind of entanglement.

    Unfortunately, I don’t see this White House eager to give up its control. Why would they? This is a liberal government’s dream come true.

  3. Frogg says:

    Dealergate: Were Four Democrat-friendly Dealer Groups Rewarded by the Obama Administration?


    To summarize: despite the claim that each dealership was evaluated at the individual market level, at least four major, connected Democrat contributors — representing dozens of individual dealerships — remained whole, while their in-market competitors were decimated.

    But I’m sure it’s all just a coincidence!

    Paging Nate Gold… Nate Gold, over at can you explain that data?

  4. GuyFawkes says:


    Okay, this is getting pathetic. Please stop embarrassing yourself.

    4 random individuals does not prove anything, when dealing with 3500+ dealerships. Every time you type something, you just keep proving that you don’t know the first thing about math or statistics. Honestly, I’m not even getting any enjoyment out of it anymore – just pity.

    Here’s a statement that you really should take to heart, and try to figure out why it’s true:

    “The plural of ‘anecdote’ is not ‘data’.”

  5. […] to Former Dem Party Leader Washington Monthly:  THERE IS NO CAR-DEALER CONSPIRACY Strata-Sphere:  Obama’s “Dealergate” Scandal Needs Investigation TownHall:  Chrysler Dealership Closings Target Republicans Fire Andrea Mitchell!:   Which […]

  6. Frogg says:

    UPDATE: 40 Democrat-friendly Dealerships Become 42 After The Dust Settles; Their Competition Gutted As Well

    Doug Ross again:

    These four Democrat dealer groups own 40 Chrysler dealerships. One of those owners is already in all sorts of legal and financial hot water with suppliers and customers. He’s not exactly a candidate most screening processes would keep.

    Yet they will likely end up with 42 dealerships after the shuffling (maybe more). And their competition is gutted in every single market! Strange!

    Hmmmmm….wonder what the odds of that are?

  7. Frogg says:

    GuyFawkes, it is usually the unconfident and unsure that insult and degrade others (as a mechanism to build themselves up). Why don’t you go reasearch the psychological term for that.

    I haven’t done any statistical analysis of all the closings and neither have you. But, clearly something is amiss in several of these closings as pointed out in detail by Doug Ross and other bloggers.

    I don’t tend to believe Obama was trying to “attack” Republican dealerships as much as I think he was trying to “protect” a few Democrat ones. Either way… is unethical. Could be a coincidence, too (albeit a strange one). But, only a real investigation/inquiry of all the details would be able to decide.

    Surely, you would have no objection to “transparency” and a real statistical analysis. Me, I’m just more concerned about the obvious handful of “something ain’t right with this case”.

    “And the plural of datum is not ‘proof’!” 🙂

  8. Frogg says:

    Awesome: Olbermann inadvertently confirms Dealergate findings!


    Of course, Olby and Bilbo neglected to include one additional slide. They somehow forgot to ask the key question: what was the ratio of GOP-to-Democrat donations for the dealerships that were closed by Obama and his minions?

    I mocked up my own slide to give you the answer that Olby and Naif “forgot” to show.

    The ratio of donations for dealers that were shuttered was 42 to 1, GOP to Democrat.

    Gee, I wonder if that difference is statistically significant?

  9. GuyFawkes says:


    That last comment is meaningless, unless you also provide this piece of data:

    What is the ratio of donation for dealers that were NOT shuttered?

    If you don’t have that, then you have what we colloquially call “jack shit”. But hey, c’mon, don’t let that stop you: post something *else* that proves you have the mathematical skills of a block of wood.

  10. Frogg says:

    Dealergate 6: The Clinton Factor

    GuyFawkes, so now I am a “block of wood”? Funny you should say that. Blocks of wood are one of the primary tools used to develope high mathematical skills in children. Maybe if you had taken your thumb out of your mouth long enough to play with a few blocks as a kid, you would be more interested in statistics instead of insults.

    All anyone who opposes you is saying….is that certainly some things don’t add up and an investigation wouldn’t hurt anyone except the guilty. So, why are you afraid?

  11. Dealergate – alternate media diggs through Chrysler franchise mess…

    I’m not one for conspiracy theories when it comes to the list of Chrysler dealers who lost their franchise last week, but you’ve got to admit when one of the top 2 percent of dealers in the country is shut-out, questions need to be asked.