White House threatens Chrysler creditors: Obama is a madman willing to do anything to get his way.

It looks like Tom Lauria's statements that the Obama administration had threatened his clients with attacks by the White House press corps are being confirmed by others: "New Allegations of White House Threats Over Chrysler."

While the focus has been on threats against Perella Weinberg, other firms seem to be confirming that they also felt threatened. Of course, the article says that "None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions."

The tactic employed by the White House seems rather shocking:

One participant in negotiations said that the administration's tactic was
to present what one described as a "madman theory of the presidency" in
which the President is someone to be feared because he was willing to do
anything to get his way. The person said this threat was taken very seriously by
his firm.

Obama's troops are presenting him as being a madman willing to do anything to get his way and the threatened believe it.

The article cited comments from two participants in the negotiations:

One person described the administration as the most shocking "end justifies
the means" group they have ever encountered. Another characterized Obama
was "the most dangerous smooth talker on the planet- and I knew Kissinger." Both
were voters for Obama in the last election.

These are not hard core Republicans attempting to get even for election defeats. These are people who voted for Obama and are finding out how radical he really is.

The White House had denied the initial statements by Lauria. The question now seems to be whether they will hold the line in face of additional and even stronger statements. Undoubtedly, they expect the White House press corps to provide them with cover just as they expected the media to act as attack dogs against Perella Weinberg.

One central fact has to be remembered. Perella Weinberg and the other creditors are asking only what they would normally receive in any bankruptcy proceeding. The Obama administration wants them to take substantially less to protect the United Auto Workers.

In effect, Obama demands that Perella Weinberg's clients take a bigger hit so the UAW doesn't have to. This simply introduces hardball politics into what should be governed by the rule of law. The UAW gave money and support to Obama and the Democrats so they get the power of the presidency behind their position in the bankruptcy proceeding.

This sets an extremely dangerous precedent. It threatens the entire system of finance by introducing an uncertainty into all financings. In finance the usual response to uncertainty is higher interest rates.

Lawyer says that White House threatened to use the White House press corps to destroy company's reputation.

Jake Tapper at ABC News reports that "White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation." Tapper says that

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 denied the story. What do the surrounding circumstances suggest as to who is more likely to be telling the truth, the White House or Thomas Lauria, the attorney for some of the creditors.

First, the threat of using the White House press corps to destroy the reputation of the creditor shocks on several levels. It suggests that the White House believes that the press corps will do its bidding even in attacking a business attempting to protect its economic interest. The White House certainly has sufficient evidence that the mainstream media will do its bidding based on its conduct during the campaign and the first 100 days.

It also indicates a willingness of the White House to destroy a private company simply for opposing a program pushed by the administration. The company simply attempted to assert its rights as a secured creditor under bankruptcy law. Tapper quoted Lauria as saying that 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 previously said that "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." In fact, according to Lauria, the secured creditors were willing to accept substantially less than what was owed them, but not as little as the White House wanted.

Obama said, "I don't stand with those who held out when everybody else is making sacrifices." It seems that Obama himself has already laid the predicate for the White House press corps to attack the company. The only defense the White House spokesperson could offer was to deny that it occurred and "there's obviously no evidence to suggest that this happened in any way."

I'm sorry, but you make the claim that the other side can't prove something when you did what was alleged and hope there are no smoking guns that prove otherwise. In fact, Mr. Lauria seems far more credible and his statements more believable than the White House.