Congressmen say GM is destroying documents

Congressmen say GM is destroying documents http://www.detnews.com/article/20100610/AUTO01/6100454/1148 /
General Motors Co. executives are destroying documents, e-mails and
other records that could shed light on corporate decisions that have triggered investigations by a U.S. House oversight committee, two top Republicans allege.
The accusations were made in a letter Wednesday to GM Chairman and Chief Executive Ed Whitacre, and signed by U.S. Rep. Darrell Issa, R-Calif., and U.S. Rep. Jim Jordan, R-Ohio. The politicians asked GM to stop destroying documents that could provide insight into investigations focused on GM's controversial commercial touting its repayment of $6.7 billion in federal loans, and other moves.
The letter, obtained today by The Detroit News, raises questions about GM's policy of deleting electronic documents while taxpayers own a majority of the automaker. The government rescued GM with $50 billion in loans last year.
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Issa's and Jordan's letter also raises questions about the government's efforts to control GM's day-to-day management despite pledges to stay out of the corporate decision-making process.
"In light of these ongoing investigations, we are deeply disturbed to learn that GM is engaging in a continuous process of destroying documents relevant to the Committee's oversight efforts," they wrote in the letter, made public today.
The lawmakers said they have "no evidence" that GM is destroying documents to deliberately prevent them from obtaining information. However, if GM continues its practice, Issa and Jordan would consider that "evidence of criminal misconduct" and alert the U.S. Department of Justice, they wrote.
"General Motors' document retention policies comply with the law," company spokesman Greg Martin said. "We have just received the letter and will respond appropriately."
GM is the target of multiple investigations led by the House Committee on Oversight and Government Reform, according to the letter. Those investigations include a GM commercial that ran in April about the repayment, the company's decision to choose new plant locations "in order to please powerful politicians," and a "secret agreement" to support the Obama administration's pursuit of new fuel economy standards.
The committee also is investigating GM's decision last year to delay the planned closing of two parts centers, including a facility in Norton, Mass., which is in the congressional district of Rep. Barney Frank, D-Mass.
In the TV commercial, Whitacre downplayed that taxpayers are still on the hook for $43 billion in aid that was swapped for a 61 percent majority stake in GM.
A conservative think tank filed a complaint with the Federal Trade Commission over GM's repayment ads, which are no longer running.
Many Republicans also have criticized the commercial, noting GM used unspent government loan money to repay the government.
The House committee recently interviewed senior GM attorney Lucy Clark Dougherty, who said GM's policy was to delete all electronic communication after 60 days and that the company did not have a backup system to retain copies, according to the letter.
Professor Fred Cate, a communications law expert at Indiana University, said most companies have a document retention policy that stores such data for six months to a year -- with many exceptions.
If a company is involved in litigation, relevant documents must be stored, Cate said.
But he has never heard of a company failing to use backup systems to store copies of electronic documents.
"If that is true, that would be absolutely unique in my experience," Cate said.
Issa and Jordan fear documents relevant to the committee's investigations have been destroyed already and more are at risk of being deleted each day.
That policy is unacceptable given the government's majority stake in GM, they wrote in the letter.
"Until such time as U.S. taxpayers have been divested of all financial interests in GM, we request that you immediately stop destroying documents and begin preserving all records and communications referring or relating to GM's status as a taxpayer-owned company, its relationship or interaction with government officials, and any issue that could be relevant to public policy," they wrote in the letter.
GM is preparing for an initial public offering of company stock, perhaps as early as late this year. The government cannot start cashing in its investment in GM until the automaker launches an IPO.
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On 10/06/2010 9:12 PM, Jim_Higgins wrote:

Anyone surprised?
GM is at the center of auto corruption USA. Last thing Obama wants is for the public to know where all this money really went. Maybe even Obama does not know, but I am sure he does not want us to know. Big mouth after all would have a lot to loose if the who truth was known.
GM, they just keep on sucking.
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Sound like BS to me, someone does not understand how corporations are run.
The fact is stock holder do NOT control ANY corporation, even if they are GM "Prefer Stock" holders as is the case with the federal government and the UAW.
The Board of Directors operate a corporation through its managers. If the stock holder do not like what the BOD is doing the only power they have is to vote them off the board, that's it.

.
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On 11/06/2010 11:44 AM, Mike Hunter wrote:

You are obviously not management material. This kind of thing happens all the time. Especially at the top.

Yep, GM never listened to many of the shareholders that tried to put the brakes on management gross incompetance.

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Once again our friend Canuch57 demonstrates that he does not know what he is talking about. When it comes to removing, or adding a member of the BOD, a majority of the STOCK must voted, not just a "few" stock holders unless they hold a MAJORITY of the shares, dummy. LOL

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Dont let him piss you off, CE.. Mike doesnt know shit, never knew shit, and will never know shit.
The stockholder vote, whether institutional or private, has to weigh heavily on the board of directors. After all, the stockholders own a portion of the company.
Institutional votes are often larger in share count that individuals. They can command some en bloc respect.
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Being a large stockholder in itself does not necessary mean you can control the BOD, it take a MAJORITY of the STOCKS VOTED to do that. Large stock holders can effect the value of the stock by buying and selling, that effects the TRADING price up or down.

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