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. kathie says:

    So a guy looses his dealership with one swipe of the pen. He has lost everything as his life savings are in the independent dealership, and he is suppose to sue the Federal Government to find out why. This is the exact reason the government needs to stay out of the private sector. The government is always about politics and favors. It’s not going to happen.

  2. ph2ll says:

    Even more creepy:

    Gateway Pundit is reporting that Chrysler is looking into opening NEW dealerships. How much do you wanna bet that new dealerships will go to supporters of D’s and BO?

    Link here:

    We are becoming more a Banana Republic with each passing day.

  3. crosspatch says:

    “How much do you wanna bet that new dealerships will go to supporters of D’s and BO?”

    Lithia Motor Group’s owners gave $15,000 to two Democrat candidates and support nationalized healthcare. They will likely lose just two of 29 dealerships and gain 5 more.

    From an update at Gateway.

  4. HIDoug says:

    Off Topic, but of Interest:

    Charles said,

    Able Danger raises its head – again!

    Able Danger raises its head – again!
    Horse Soldiers | 2009 | Doug Stanton

    In his book, “Horse Soldiers,” Stanton describes
    (pg 27) t
    he thoughts of Major General Geoffrey Lambert, US Special Forces Command, Fort Bragg on the morning of September 11, 2001.

    “It had taken him about ten seconds to figure out who had masterminded the attacks, and who had carried them out.

    For the past several years, he had observed a top-secret intelligence program called data mining that had identified one man, an Egyptian by the name of Mohammed Atta, as a serious terrorist with links to a Saudi named bin Laden, who was a financier of terrorist training camps for men like the Egyptian.

    Months earlier, the people involved in the program had tried telling the FBI what they had discovered, but Army lawyers had discouraged the disclosure, even though the project had identified the highjackers. Lambert figured they knew everything there was to know about Osama bin Laden and his military training camps in Afghanistan, but none of the legal minds could decide if the surveillance was lawful.

    Now Lambert felt sick that more effort had not been made to warn someone. (Lambert, extremely upset, later agreed with lawyers that the information not be shared with the FBI.)”

  5. MerlinOS2 says:

    Open Secrets says the history for car dealers is 80% of donations go to Republicans.

    Gateway Pundit has another post up that has this tidbit

    Car Czar Steve Rattner and wife Maureen White, who is the former National Finance Chair of Democratic Party.
    Rattner and his Auto Task Force decided on which dealerships would close and which would stay open.

    I don’t want to post a second link and get caught in moderation

  6. MerlinOS2 says:

    link to the post I referred to above.

    So his wife probably knew or could get access to all the local party types to see if they had donors they might want from the opposition to be removed from the field of battle.

  7. gary1son says:

    Well if most of the car dealers are Republican donors, it may be that this is why most of the closures are coming up Republican donors. I guess all the data needs to be analyzed to determine if the percentages are significantly different, but the sad part is that this probably wouldn’t surprise many people, if true.

    But the real scandal here is if the government is involved at all in making these determinations, and it appears they are, big time.

    I never got this kind of sick feeling of fear in the pit of my stomach over an administration before — not even with Clinton’s.

    I don’t think even Carter was of this kind of anti-free market mind, although I wasn’t really paying much attention to politics back then. I know Reagan had a lot of cleaning up to do.

    The information at Opensecrets really tells a story. Republicans get the majority of money from people who actually go out and make the economy work and grow, and the Democrats get money from people who constantly work to hobble it, like lawyers and labor unions.

  8. GuyFawkes says:

    It’s already been investigated, by Nate Silver over at 538-dot-com.

    Yes, most of the dealerships that are closing are associated with people who donated to Republicans. And the reason is pretty simple: most dealerships, period, are associated with people who donated to Republicans.

    As Nate put it: “It’s called a control group, people”.

    Time to find the next faux outrage, folks.

  9. DJStrata says:

    Didn’t know that Nate Silver is the known all of car dealerships and campaign contributions. Hmm think I’ll wait til people in an authority position have a chance to investigate.

  10. Frogg says:

    Well, clearly this needs to be investigated before anyone jumps the gun. They need to find out the basis for closures and take a look to see if that was really followed. The majority of dealerships may be Republican….but, statistical analysis is needed in the process. All things need to be considered.

    Macsmind blog takes on Nate Silver’s cliam:

    “Only one problem with that – it’s not so. I checked and of the 6 dealers closing in South Florida all their owners contribute to Republicans, and the 10 or so who are not contribute to Democrats. Which means – pay attention Beren – No dealers who contribute to Democrats are being closed. Additionally that means also that 60 percent of the Chrysler dealerships in South Florida are NOT Republican contributors and that further thus means that Chrysler dealerships – at least here in South Florida do NOT “overwhelmingly” donate to Republicans.

    Which means that Nate Silver’s data is false.

    So it looks that the theory is proved.

    It’s unlikely we’ll get Democrats to hold hearings on this, but the pending litigation – with the discovery – could prove a worse than Watergate if found to be true.

    As they say, hold on to your hats. “

  11. KauaiBoy says:

    The notion that any dealerships need to close is evidence of either complete stupidity or transparent thievery. Economic theory says that if there are too many dealerships they will go out of business on their own if they are not profitable. Competitors will enter an industry so long as it is economic to do so (i.e. it is the smart thing to do). Therefore it doesn’t seem to make sense to force a single dealership to close. If the owners are content with lower profits or even losses then let them stay open. The fact that car sales are down reflects the lack of faith people have for the future (“Obama why have ye foresaken me”) and decision to not take on the additional debt or hold onto cash (may need that for food in the brave new world).

    Government based decisions have always been based upon the use and misuse of power to either return favors or quash dissent. Nothing in the actions of the left has indicated it is any different, rather I would say they epitomize such behavior. By interfering in the natural selection process, this government will only leave the country with weak mutants in further need of the hand of big government. Hey that almost sounds like a plan.

    Concerned citizens, if any such exist, can boycott those dealerships they disagree with and should take action economically which is the greatest weapon of the people. No sales, no sales tax, no government revenues, no profits to donate to Pelosi and pals. Now that is a better plan. They don’t have the guts to come and take it from the people en masse which is what they need to do to fuel the pig they are creating. Unless they figure out how to print money. But that is a different diatribe.

  12. Mike M. says:

    There’s one other thing to consider…

    Obama comes from the Pay-to-Play politics of the Democrat Party. From the especially corrupt Chicago branch of that party. With this, he is apparently showing a willingness to use anything at hand to target political opponents.

    And he wants to control your health care.

    What political influences will be brought to bear on THAT?

  13. MerlinOS2 says:

    Not all dealers donate to parties.

    With only 9 million combined donations last year it is very possible that the vast bulk of the active Republican donors could be in the 789 closed dealerships.

    Full cross reference of both the closed and remaining open dealers is in progress.

  14. MerlinOS2 says:

    I have seen claims that the 25% of the dealers that closed contributed 14% to sales of product but there was no link to back up their claim.

    I have looked through the entire closing list and there is a very high match between locations of closed dealers and congressional districts Obama lost in the last election.

  15. GuyFawkes says:


    I’m sorry, I know that math and other science stuff is tough for you and your ilk. But even then, your comment is astoudingly ignorant.

    Macsmind used a sample of 16 dealerships to prove a “bias”, when the total number of dealerships is over 3500. If you think that a sample which is <0.5% of the total can be used to prove any form of “trend”, then it’s obvious that you cannot grasp math beyond a third grave level.

    Thanks for trying, but leave the “big number” stuff for the grown-ups, mmkay?

    But, hey – tell ya what: AJ is a rocket scientist. If he’ll come here and say that yes, using <0.5% of a control group to prove a “trend” within said group is a viable method, then I’ll admit that I’m wrong and you’re right.

    In fact, I’ll even help you with a much simpler mathematical question: what percentage of the Chrysler dealerships that did NOT close contributed to Republicans?

  16. […] Obama’s “Dealergate” Scandal Needs Investigation TownHall:  Chrysler Dealership Closings Target […]

  17. AngusM says:

    It took me all of 5 minutes to figure out why Jim Anderer’s dealership was slated for closing. His dealership is Island JEEP. He does not sell Chrysler or Dodge branded vehicles, only Jeep. One think I read is that Chrysler preferred dealerships that carried their entire line of vehicles.

    This is a quote from one of the articles on the decision:
    “The company is also trying to reduce the number of single-brand dealerships to bring all three Chrysler brands — Jeep, Chrysler and Dodge — under a single roof, they said.”

    Chrysler attempted to do the same thing back in 2008 under a plan called “Project Genesis,” but did not have bankruptcy protection at the time that would give them an upper hand over dealer franchises.

  18. […] Senators from each party are demanding investigation. OK, exactly one from each […]

  19. Frogg says:

    Guy Fawkes, take your arrogance elsewhere. Macsmind took an area he is familiar with that did fit the statistical analysis of Silver’s claim. All he is saying is…..a “real” statisical analysis and investigation would be needed. No one knows anything until then. I suspect most of the closings fit the plan….but, that several were targeted (Dems saved) in some places (Obama is a “pay to play” Chicago politician, afterall–and, has a proven record of this heavy handedness). He also needs to be “transparent”.

  20. Frogg says:

    UPDATE: 5-29

    Fox News performed a random survey of dealers who were closed and dealers allowed to remain open. It pretty much shuts the door on the subject:

    A preliminary study by found that the data do not support the charges. Among the dealerships set to close, 12 percent of a random 50 selected for review donated to Republicans and 8 percent to Democrats. Of the dealerships remaining open, 14 percent of a random 50 selected donated to Republicans and 10 percent to Democrats. In both samples, the average size of donations was similar for both parties.

    According to the sample, one major factor in determining whether a dealership was closed or not was the size of the dealership, measured by the number of product lines carried (the four lines are Chrysler, Jeep, Dodge and Dodge Truck). The average store that will be closed in the sample carries 2.5 of those product lines whereas the average store that will stay open carries 3.64.

    A Chrysler representative said part of the decision on consolidating dealerships was to reduce overlap and have the remaining dealers sell all three company brands.