Modica: GM Hid Ignition Defect From Bankruptcy Judge

NLPC Associate Fellow Mark Modica was a guest last night on The Willis Report on Fox Business Network.

Here’s a transcript:

Gerri Willis: Well, Kenneth Feinberg as you heard is in. But Mary Barra making it clear today that doesn’t mean money is going to be doled out. So should there be a compensation fund for GM victims? Many people talking about that tonight. Here to weigh in, Mark Modica, the National Legal and Policy Center, and Jack Burkman, a Republican strategist. Mark, I will start with you. So as I said they retained Ken Feinberg. As you know he has been critical, 9/11, BP, Boston marathon, doling out the dough. What does this tell you? Is this the right thing to do for GM right now? Mark, to you.

Mark Modica: Absolutely, absolutely. I think that was the direction this would have headed and now with Ken Feinberg in there. I think it’s clear that they know that it is the right thing to do. And they’re going to get money rightfully so to people that were hurt and their families who definitely deserve it.

Gerri Willis: Jack, to you, do you agree? Should Feinberg be brought in at this point?

Jack Burkman: Yes, maybe bring Feinberg in, but I don’t think there should be any kind of a fund. I think Feinberg is smart lawyer. He could advice you, GM — Look, I told you Gerri, not be too cynical here, maybe we should have let GM go broke. That is what a lot of us said four or five years ago. This is very silly. I don’t see any public component to this issue at all. Let’s make some news and be controversial. Thirteen people died and so what. Thirteen people die in a lot of things. Hundreds of people die in a lot of things. That doesn’t mean there needs to be congressional hearing. The next thing you will have somebody in the Senate, Blumenthal calling today for all kinds of oversight. It wouldn’t be surprised me if he and others want public money to put into this.

Gerri Willis: Mark, I have a feeling you want to say something about this right now.

Mark Modica: That is a horrible thing to say. And that is something I don’t think, as a Republican strategist you want to put out there, that you don’t think 13 people dying is important. Not only…is it important, the fact that General Motors covered this up for some years. But more importantly, not that they covered it up from old GM which I kept hearing today about today’s GM. Today’s GM has been in existence for almost five years. And they knew about this. As a matter of fact…

Jack Burkman: Mark, you’re missing point. These people, these victims can avail themselves of many things. They have courts. They have lawyers. They’re all kind of plaintiff lawyers. There are class-action suits. We have 100 things available in the tort system for people to sue when they’re injured. That doesn’t mean you need congressional oversight. That doesn’t mean you need a special victims compensation thing like this is 9/11. And let me reiterate. I will be more controversial. Thirteen people dying is not a significant event because we have people dying from many things in society.

Gerri Willis: I got to tell you. It caught my attention. I am, I got to jump in here. I’m sorry. Mark, I can’t help myself. Thirteen people dying to me is a big deal. Now what you do it that is totally different conversation. And I think that the questions that are rising right now is, why doesn’t GM take action? Mark, what should these victim families do at this point? They were already on Capitol Hill today, talk to the press, making their stories public. You know, to Jack’s point, it is almost like a script we see written over and over and over again. What should happen? How should we resolve these issues? Mark Modica: You talk about using the courts. This is such a different scenario because we had a bankruptcy, which freed GM up from its liabilities. Before that bankruptcy, two weeks before they filed for bankruptcy, they had meetings about this ignition switch problem. So there’s a good chance that these liabilities were hidden from the bankruptcy court.

Jack Burkman: But Mark, they can still sue. If you’re a victim, if you’re a victim you can sue them.

Mark Modica: That is old GM. Yes but they’re suing old GM.

Jack Burkman: That is presuming you’re presuming… Gerri Willis: All right, one at a time. We can’t understand you guys if you both talk. Jack, you next and then Mark. Jack Burkman: Well, he is presuming all of the liability would be necessarily with the old GM. That is very difficult situation. But even if it is, hey the only one to blame is Uncle Sam. Uncle Sam bankrupted the old GM and created new GM. And by federal law old liabilities die. So you can lay that blame squarely at feet of one Barack Obama. That is…

Gerri Willis: Mark, what about that? We have already doled out $10 billion. Do we need to dole out more?

Mark Modica: Well, you know, there is a precedent for this because there was another lawsuit from bondholders, Nova Scotia bondholders, also didn’t disclose something to the bankruptcy court and GM did settle. New GM put in millions of dollars for a claim against old GM and that was hushed up. So there is a precedent for this. Those victims should be compensated of the families should be compensated. I certainly wouldn’t argue that the government has made a debacle from these auto bailouts and there are clear conflicts of interest when you have government agencies regulating a company that President Obama ran a re- election campaign upon the success of General Motors. Then we’re supposed to have NHTSA and a justice department — too many conflicts of interest. Gerri Willis: Last word, Jack. Jack Burkman: To conclude, I would just say, Gerri. You’re setting a very bad precedent. Congress is setting a bad precedent. If we are going to create a victim’s compensation fund every time you have 13 people die in auto related accidents, this country is in trouble.

Gerri Willis: Well, they don’t all die because there is defective part in the car. I guess that is the difference. Mark and Jack, thanks for coming on the show tonight.