Limbaugh, Fox Business push disputed claim: White House "threatened" investment firm

››› ››› JULIE MILLICAN

Rush Limbaugh and Fox Business advanced the disputed claim that the White House "threatened" Perella Weinberg with, in Limbaugh's words, "reputation ruination" to compel the firm to support the Chrysler bankruptcy offer. However, neither noted that Perella Weinberg has denied the allegation.

On May 4, Fox Business co-hosts Cheryl Casone and Tom Sullivan and radio host Rush Limbaugh advanced the disputed claim by lawyer Thomas E. Lauria that his client, Perella Weinberg Partners, was, in Limbaugh's words, "threatened with reputation ruination from the White House press corps" to compel the firm to support the terms of the Chrysler bankruptcy offer. While both Casone and Sullivan's report and Limbaugh's noted that the White House has denied the allegation, neither noted that Perella Weinberg has done so as well.

On Fox Business Network's Fox Business, Casone teased Lauria's upcoming appearance on that evening's broadcast of FBN's Cavuto by noting that the "White House [is] denying claims that it strong-armed at least one of Chrysler's creditors to accept the terms of the bankruptcy offer." Casone then aired an audio clip of Lauria stating during a Detroit radio interview: "One of my clients 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." Sullivan later asserted: "I did not know the White House had control over the White House press corps to go destroy a company."

Similarly, on his nationally syndicated radio show, Limbaugh cited the interview in which Lauria made the comments aired on Fox Business. Limbaugh went on to state: "[N]ow the White House, by the way, is denying all of this, but there's a pattern here, ladies and gentlemen, that sort of gives the lie to the denial. I mean, this is -- we've referred to the situation that's going on in Washington as loan-sharking, Obama loan-sharking people."

In a May 2 post to his Political Punch blog, ABC News senior White House correspondent Jake Tapper reported that Lauria "told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened" Perella Weinberg "that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation." Tapper subsequently updated the post to note that "[t]he White House and a spokesperson for the investment bank in question challenged the accuracy of the story" and quoted a Perella Weinberg spokesperson saying, "The firm denies Mr. Lauria's account of events."

Additionally, a May 3 post on The New York Times' DealBook blog reported that "Perella Weinberg said in a statement that the firm decided to back the government-proposed settlement Thursday afternoon, after Mr. Obama criticized the lenders in harsh terms," and included the following "full statement by Perella Weinberg":

Suggestions have been made that the Perella Weinberg Partners Xerion Fund changed its stance on the Chrysler restructuring due to pressure from White House officials. This is incorrect. The decision to accept and support the proposed deal was made by the Xerion Fund after reflecting carefully on the statement of the President when announcing Chrysler's bankruptcy filing. In considering the President's words and exercising our best investment judgment, we concluded that the risks of potentially severe capital loss that could arise from fighting this in bankruptcy court far outweighed any realistic potential upside.

We have a very specific mandate from our investors, and that is to carefully weigh investment risks and rewards. It is not our investment mandate to pursue political or risky legal campaigns with our investors' money. This was our assessment of investment risk and reward, nothing else.

While we did and still do believe that the lenders would be justified in pressing their objections under conventional bankruptcy law principles, we believe a settlement would now be in the best interests of all parties in the context of avoiding a drawn out contested bankruptcy litigation proceeding, and we encourage our colleagues in the loan syndicate to pursue this immediately.

From the May 4 broadcast of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: Now we know, ladies and gentlemen, I was right. Now we know, beyond a shadow of a doubt, I was right; option number three: They are scared to death. My buddy Frank Beckmann at WJR in Detroit interviewed one of the bankruptcy lawyers for one of the bondholders at Chrysler, one of the clients. His name is Tom Lauria.

Tom Lauria said, "Let me tell you, it's no fun standing on this side of the fence opposing the president of the United States. In fact, let me just say people have asked me who I represent. That's a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and, in essence, compelled to withdraw its opposition to the Chrysler 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."

And Frank Beckmann said, "Was it Perella Weinberg?" Lauria says, "It was Perella Weinberg."

Now, this happened in Friday -- on Friday in Detroit. It's made the news throughout the weekend. I -- so here's -- now the White House, by the way, is denying all of this, but there's a pattern here, ladies and gentlemen, that sort of gives the lie to the denial. I mean, this is -- we've referred to the situation that's going on in Washington as loan-sharking, Obama loan-sharking people.

Basically what happened was, as we mentioned last week, the bondholders, the investors at Chrysler, were leaned on by Obama and called out personally by the name of hedge funds and they were selfish and they were holding out for a better deal. These people were forced to settle for 20 to 30 cents on the dollar, while the UAW was made whole in the whole thing. And the lawyer, Thomas Lauria, now says that his client was threatened with reputation ruination from the White House press corps.

From the May 4 broadcast of Fox Business Network's Fox Business:

CASONE: The White House denying claims that it strong-armed at least one of Chrysler's creditors to accept terms of the bankruptcy offer. The accusation comes from the attorney for the creditor, Thomas Lauria, in an interview with Detroit radio station WJR -- WJR. Let's listen in to this.

LAURIA [audio clip]: One of my clients 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.

CASONE: And it turns out that the bondholding firm Perella Weinberg eventually agreed to the bankruptcy terms proposed by the White House. We're going to have much more on this story when Neil Cavuto talks to attorney Thomas Lauria tonight at 6 p.m. Eastern time right here on Fox Business.

SULLIVAN: That brings up the whole question about -- I did not know the White House had control over the White House press corps to go destroy a company. But I'm sure Neil will sort it all out for us.

Posted In
Economy
Network/Outlet
Premiere Radio Networks, Fox Business
Person
Rush Limbaugh, Tom Sullivan, Cheryl Casone
Show/Publication
The Rush Limbaugh Show
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