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PrintMay 28, 2009
Dealergate: The plot thickens
Doug Ross and Joey Smith are doing a helluva job in researching the data on the Chrysler dealer closings story. And in typical internet fashion, the story now has some legs and is being addressed by other outlets.
Notably, World Net Daily - sometimes not the most reliable of sources - has a piece of straightforward reporting where they scanned the 789 dealers being closed, matched the donations to presidential candidates, and discovered the following:
$450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.
What does this mean?
It could mean nothing. It is a given that a large percentage of dealers - small businessmen - are Republican to begin with. Liberal poll expert Nate Silver pegs the percentage at 8-1 which matches up pretty well with what Doug and others have found. Nate was looking at donors to political campaigns from all car dealers and that shakes out to be overwhelmingly GOP.
Therefore, it is probably useless to try and make a case based on the amount of monies donated to the two parties. What is needed is an analysis of which dealers were allowed to stay open and whether they benefited from GOP dealers that were closed..Doug Ross came up with some interesting coincidences based on his analysis of one dealership group owned by prominent Democrats where their dealerships were all allowed to stay open while neutral or GOP donor dealerships were closed. He made this connection in three separate territories where the Democratic auto group - RLJ - operated.
This is compelling but still not enough evidence. In the end, what is needed is solid information about who exactly made the individual decisions to close the dealers.
We know it wasn't the bankruptcy judge. We also know that the criteria for closing announced by Chrysler is not being followed. In dozens of cases, profitable dealers are being closed for no apparent reason.
So if the judge and Chrysler had little or no say in who was being torpedoed, that leaves the White House auto task force shoving these decisions down Chrysler's throat. So far, Chrysler has remained quiet. But eventually, they are going to have to say something in response to the building pressure put on them by dealers who think they are being treated unfairly and a media that may be getting more curious.
Mark Tapscott in the Washington Examiner picked up the story today:
Florida Rep. Vern Buchanan learned from a House colleague that his Venice, Florida, dealership is on the hit list. Buchanan also has a Nissan franchise paired with the Chrysler facility in Venice.
"It's an outrage. It's not about me. I'm going to be fine," said Buchanan, the dealership's majority owner. "You're talking over 100,000 jobs. We're supposed to be in the business of creating jobs, not killing jobs," Buchanan told News 10, a local Florida television station.
Buchanan, who succeeded former Rep. Katharine Harris in 2006, reportedly learned of his dealership's termination from Rep.Candace Miller, R-MI. Buchanan owns a total of 23 dealerships in Florida and North Carolina.
Also fueling the controversy is the fact the RLJ-McCarty-Landers chain of Arkansas and Missouri dealerships aren't being closed, but many of their local competitors are being eliminated. Go here for a detailed look at this situation. McClarty is the former Clinton senior aide. The "J" is Robert Johnson, founder of the Black Entertainment Television, a heavy Democratic contributor.
A lawyer representing a group of Chrysler dealers who are on the hit list deposed senior Chrysler executives and later told Reuters that he believes the closings have been forced on the company by the White House.
Another respected blogger, Megan McCardle , is dubious but willing to look at the question if compelling evidence is presented:
My operating assumption is that this story is a red herring. Democratic and Republican dealers are unlikely to be found in the same place, and the rural counties that tend to be red are probably less profitable. I would be less surprised to find out that the administration rescued specific donors from the hit list than to find that they deliberately closed Republican dealerships.
Still the administration should answer this; it gives the appearance of Chicago-style corruption that is going to further taint a Chrysler takeover which has already left a number of people in the business and finance community wondering how firm the rule of business law is these days.
Does this mean that all of this is just a statistical coincidence?
Given what we know about the Obama White House and its hyper-partisan ways. Given also that we have seen the bullying tactics, the threats, the blackmail, the arrogance of Obama's people, one can combine those facts with the appearance of partisan bias in closing the dealerships and believe that it is entirely possible for this to be true. In other words, it is hardly a stretch of the imagination to think that this has been part of the plan.
But even if it isn't, the closing of dealerships is a tragedy for the communities in which these dealers operate. Many of the dealers who are complaining that they are profitable and shouldn't be closed are good community citizens. They sponsor boys and girls sports teams. They're always there when the community needs help to put on events like parades and fireworks. They are Rotarians, Chamber of Commerce members, and volunteers whose loss will be keenly felt by the communities they serve.
I wouldn't put it past Obama and his crew to compound this tragedy by making a lot of those closings unnecessary because they were based on the party affiliation of the dealer.
