Rejected Auto Dealers Ask for Congressional Inquiry

The House panel was asked today to further investigate the dealership cuts made by General Motors Company and Chrysler Group by following up on an audit of their actions. A group of dealerships cut by the automakers would like to know who made the decisions concerning store closings.

Tammy Darvish, co-leader of the Committee to Restore Dealer Rights, said, “We ask that there be some sort of accountability for the gross error in judgement on behalf of the auto task force in addition to those that we believe committed perjury in federal Bankruptcy Court and in congressional hearings.” The committee was formed last year and has been involved in a number of activities designed to protect the rights of rejected dealers. The statement was included in a letter from Darvish, and did not name who the committee thinks may be guilty of perjury.

Members of the House Oversight and Government Reform Committee, which is led by Representative Ed Towns (D-NY), received the request from Darvish. The committee is the main investigative panel in that chamber. There was no immediate response to a request for comment on the matter.

A government watchdog discovered that the U.S. Treasury Department’s auto task force sped up the process used by GM and Chrysler to make dealer cuts and that the cuts were made without proper consideration of the effect the closings would have on the local economies, jobs or on the companies’ viability.  Darvish’s letter came two days after the discovery was made.

The watchdog in this case is the Inspector General for the Treasury’s Troubled Asset Relief Program. The report states that claims made by GM and Chrysler that the dealership closings were necessary to reduce costs were not investigated adequately.

The report says, “It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery.”

The Treasury Department has disputed the audit findings.

The co-leaders of the Committee to Restore Dealer Rights are Darvish, Alan Spitzer and Jack Fitzgerald. The group was successful in its attempt last year to get Congress to pass legislation providing an arbitration process for rejected dealers seeking reinstatement.

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