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House oversight committee issues first subpoena in Delphi pension fight

Published: Tue, August 13, 2013 @ 12:07 a.m.

By Jamison Cocklin



In a sign of mounting frustration, a congressional committee made a move Friday to uncover what could be tens of thousands of documents withheld from Delphi salaried retirees in their quest to regain full pension benefits.

Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, issued the first subpoena Friday to U.S. Treasury Secretary Jack Lew. In a letter signed by two other lawmakers, including U.S. Rep. Mike Turner, R-Dayton, Issa said the Treasury’s “lack of cooperation” over the last three and a half years left him with no choice but to subpoena Lew for the documents.

Congress has made repeated requests with the Treasury for what lawyers representing the salaried retirees estimate could be as many as 30,000 documents that could help determine why they saw their pensions slashed by more than half in some cases. Until now, though, no request has carried the weight of a congressional subpoena.

The move is yet another volley in a four-year struggle for about 20,000 retirees — including 1,500 in the Mahoning Valley — who saw their pensions cut anywhere from 30 percent to 70 percent after Delphi terminated their plans during bankruptcy in 2009. They also remain without health and life insurance.

Delphi was formed as a spinoff by General Motors Co. in 1999 as a parts supplier. After Delphi terminated the pension plans and left a $7.2 billion shortfall, the Pension Benefit Guaranty Corp. assumed the plans and billions in losses.

Issa is examining whether the Treasury played a larger role than the PBGC in marginalizing the salaried retirees benefits — as hourly workers, mostly represented by the United Auto Workers, saw no such cuts. The Treasury oversaw the president’s auto task force, which played a major part in the government’s $85 billion industry bailout.

“Taxpayers deserve the full truth about how decisions were made to use their money in an administration effort that resulted in protecting generous pensions for unionized Delphi employees, while greatly diminishing benefits for nonunionized employees,” Issa and other lawmakers wrote in the letter to Lew.

Similar attempts to obtain documents that might help determine how the decision was made and whether it was legal were filed in 2010, 2011 and 2012 with Lew’s predecessor, Tim Geithner. Lawmakers noted in their letter, though, that the requests either went unanswered, or “only a fraction” of the requested documents were received.

The oversight chairman is the only committee chairman in the House who can issue a subpoena — a document that compels testimony or physical evidence to come before members — without a full committee vote.

It’s unclear, though, if the Treasury will cooperate with the request. Calls and emails left Monday with the department went unanswered, and a congressional subpoena is not always enforceable.

Bruce Gump, vice chairman of the Delphi Salaried Retirees Association and a former Delphi engineer from Warren, says he was overjoyed with the committee’s move. He said the Treasury’s decision to ignore repeated requests for information related to the ongoing congressional investigation represents a “tacit admission of guilt.”

“Congress has heard enough and seen enough to think that something wasn’t done properly,” Gump said. “Now they want records to show Treasury is telling the truth and everything was done properly and legally.”

A lawsuit by Delphi salaried retirees over the PBGC decision to take on the pension plans continues. At issue is how much liability existed before the plan was terminated.

Based on a 2009 independent actuary, salaried retirees believe the liability was $3.5 billion, while the PBGC has said it was $5.2 billion. Repeated efforts to obtain documents to determine how the PBGC determined the $5.2 billion have been met with resistance from various government agencies, as well as President Barack Obama’s administration.

James Sherk, a senior policy analyst at the Heritage Foundation, a conservative think tank, said Friday that many believe the pension plans never should have entered bankruptcy in the first place.

“My suspicion is [Treasury] is dragging its feet because those decisions will not make them look good,” he said. “About 20,000 people had their pensions cut at the market’s low point, and if they would have waited for it to recover, those retirees would have likely received everything they were promised.”

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