State Treasurer Mourdock Speaks To Optimists
Wednesday, June 24, 2009 9:47 AM
Having garnered national attention over the past month, Indiana Treasurer Richard E. Mourdock spent this morning talking to the Warsaw Breakfast Optimist Club.
Mourdock has been in the news lately as he has taken on the US Government during the bankruptcy proceedings of Chrysler.
Mourdock has been working on behalf of Indiana State Police pension fund, the state teacher's retirement fund and the state's Major Moves project fund.Those three entities purchased secured debt of Chrysler's in August 2008.
"We bought 47 million dollars of secured debt from Chrysler at 43 cents on the dollar," said Mourdock at this morning's meeting in the Shrine Building at the county fairgrounds.
Mourdock defended the purchase of the debt based on the criteria that it was a reasonable investment since secured creditors are always considered first in bankruptcy proceedings and it supported Indiana business.
Chrysler has plants in Indiana.
Mourdock said after that debt was purchased, the next month things began to turn with the failure of Lehman Brothers.
Soon the auto industry imploded.
"Beginning in March, the Obama administration effectively began running Chrysler," said Mourdock.
Mourdock said the government told secured creditors they'd only be getting 29 cents on the dollar for their investments in Chrysler.
He contends that the major banks were told by the Obama administration not to fight the payouts because they were assured backing by the federal government via taxpayer dollars.
"They may be too big to fail," said Mourdock. "But we're not."
Mourdock chronicled some of the media backlash he has received as well as the court battles that ended when Chrysler was sold to FIat.
Mourdock told the optimists that the use of the word "sale" was wrong.
"Do you know how much Fiat paid for Chrysler?" Mourdock asked. "Zero."
He recounted sitting in Governor Mitch Daniels office at one point and telling Daniels that a class-action lawsuit could be the answer.
"But only two other states had invested," said Mourdock. "California and Michigan. California is looking for their own federal bailout and Michigan is home to Chrysler, GM and Ford."
Mourdock stated he had his "Rosa Parks moment" and knew that if he was going to go forward it'd be "tough stuff".
Mourdock detailed the three points of his lawsuit.
First, Mourdock said, is that secured creditors are first in line but that in the Chrysler deal they were put behind unsecured creditors.
Mourdock also sated that the money being used, TARP money, was being used illegally.
Mourdock said he's been taken to task for being politically motivated but criticized former President George W. Bush for also spending money illegally.
Third, Mourdock alleged there was under the table dealings going on to set the values for Chrysler.
Mourdock said he hopes the Supreme Court will hear this case.
He said this has changed the investment policy for funds in that they will no longer invest in American companies that will accept federal bailout money.
Mourdock said that this is a violation of the fifth amendment in that "private property can't be taken without due process."
After taking questions from the audience that ranged from him talking about global warming to NAFTA, Mourdock said that the three funds still have legal recourse and could still recoup the $6 million.
"Would the U.S. Treasury write us a check," Mourdock asked rhetorically. "I don't know."
Mourdock said should the lawsuit go forward they would not ask for the sale and bankruptcy to be undone.