Were Republicans Targeted in GM and Chrysler Dealership Closures?

Chevrolet dealership photoThe IRS scandal that revealed targeting of conservative groups by the Treasury Department has reopened speculation that the Obama-orchestrated auto bailouts unfairly targeted Republican-leaning dealerships for closure. Republican Congressmen Mike Kelly (PA) and Jim Renacci (OH) have penned a letter to Treasury Secretary Jack Lew requesting documentation so that an investigation can determine what criteria was used to shutter dealers that appear to have had one thing in common: their political affiliations.

The outrageous behavior of the IRS in targeting non-profit organizations with conservative roots, like the Tea Party, for extra scrutiny came at around the same time that General Motors and Chrysler were being guided through bankruptcy processes by the Treasury Department. Obama’s Auto Task Force required that GM and Chrysler close about 2,000 dealerships as part of the restructuring. This job-killing decision came at the same time that the Administration boasted about all the jobs that would be saved by bailing out the industry. The dealership jobs lost were primarily non-union compared to the politically-favored UAW jobs that were to be saved.

Critics at the time questioned the criteria used to close dealers as many claimed that shuttered dealerships were targeted because of their Republican affiliations. What seemed at the time to be an unlikely conspiracy theory now does not seem so far-fetched given the fact that Treasury was targeting non-profit groups based on political affiliations at around the same time. It is enough of a concern that Kelly and Renacci are seeking further documentation.

Both Kelly and Renacci owned dealerships that were on the list for closure. Breitbart.com posted a copy of the letter and reviewed the congressmen’s concerns as follows:

The IRS scandal ‘raises serious questions about past decisions made by the [Treasury] Department regarding auto dealership closures that occurred in 2008 and 2009,’ reads the letter. ‘We formally request that the Treasury Department provide all e-mails, phone records, notes, memoranda, reports, and other communications regarding the decision-making process for dealership closures from the Automotive Task Force headed by Car Czars Steve Rattner and Ron Bloom.’

The letter also notes that while the Automotive Task Force claimed to have objectively evaluated each dealership, a Special Inspector General Report found that there was ‘little or no documentation’ that proves objective criteria were used.

‘At the heart of this request,’ the letter concludes, ‘is the obligation we have to the American people to ensure that political profiling has not been a systemic issue within this administration.’

The original concerns regarding possible targeting of Republican-owned dealerships were spelled out back in May of 2009 by the Washington Examiner. That piece pointed out that some dealerships were targeted for closures that were “competitors to a dealership chain partially owned by former Clinton White House chief of staff Mack McLarty.” Also noted was the fact that only one of the many Chrysler dealerships slated for closure were found to be contributors to the Obama campaign in 2008. The past accusations that dealerships could possibly have been targeted for their political affiliation no longer seems to be as absurd an idea given the IRS’s current scandal.

Congressmen Kelly and Renacci are rightfully asking the hard questions about the politically-biased auto bailout process that many others want to bury in the past. It is hard for politicians to dredge up criticism for the GM and Chrysler bankruptcy processes, which are widely promoted and perceived as a great success. The truth is that the process saw politically-favored groups benefit at the expense of others and now the question of political profiling is reemerging. As the congressmen conclude in their letter, we should indeed, “ensure that political profiling has not been a systemic issue within this administration.” Even if that means questioning what has become a politically-popular auto bailout process.

Mark Modica is an NLPC Associate Fellow.