Congressmen say GM is destroying documents
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
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.
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,"
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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