White House Accused of Threatening Chrysler Debt Holders

Now there are accusations that Steve Rattner, the head of the Auto Industry Task Force (who is also under scrutiny in a probe of kickback schemes involving NY pensions), threatened to destroy the reputation of an investment bank that owns Chrysler debt if they didn't accept the government's plan for divvying up Chrysler (see earlier posts on the flaws in the government's plan).

Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence."

...Lauria said his clients "are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt" with Chrysler.

...President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.

The White House is denying the report.