GAO 

United States Government Accountability Office

Report to Congressional Committees

November 2009 TROUBLED ASSET 

RELIEF PROGRAM 

Continued 

Stewardship Needed 

as Treasury Develops 

Strategies for 

Monitoring and 

Divesting Financial 

Interests in Chrysler 

and GM 

GAO-10-151 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2009

TROUBLED ASSET RELIEF PROGRAM

Continued Stewardship Needed as Treasury Develops

Strategies for Monitoring and Divesting Financial 

Highlights of GAO-10-151, a report to Interests in Chrysler and GM 

congressional committees 

The Department of the Treasury 

(Treasury) provided $81.1 billion in 

Troubled Asset Relief Program 

(TARP) aid to the U.S. auto 

industry, including $62 billion in 

restructuring loans to Chrysler 

Group LLC (Chrysler) and General 

Motors Company (GM). In return, 

Treasury received 9.85 percent 

equity in Chrysler, 60.8 percent 

equity and $2.1 billion in preferred 

stock in GM, and $13.8 billion in 

debt obligations between the two 

companies. 

As part of GAO’s statutory 

responsibilities for providing 

oversight of TARP, this report 

addresses (1) steps Chrysler and 

GM have taken since December 

2008 to reorganize, (2) Treasury’s 

oversight of its financial interest in 

the companies, and (3) 

considerations for Treasury in 

monitoring and selling its equity in 

the companies. GAO reviewed 

documents on the auto companies’ 

restructuring and spoke with 

officials at Treasury, Chrysler, and 

GM, and individuals with expertise 

in finance and the auto industry. 

What GAO Recommends

GAO recommends that the 

Secretary of the Treasury ensure 

the expertise needed to monitor 

Treasury’s investment in Chrysler 

and GM remains in place, report to 

Congress on its general approach 

for monitoring the companies’ 

performance, and have a plan for 

evaluating the optimal method and 

timing for divesting Treasury’s 

equity. Treasury generally agreed 

with GAO’s findings, conclusions, 

and recommendations. 

Chrysler and GM have made changes since December 2008 to address key 

challenges to achieving viability, but the ultimate effect of these changes 

remains to be seen. The companies have eliminated a substantial amount of 

their long-term debt, reduced the number of brands and models of vehicles 

they sell, rationalized their dealership networks, and lowered production 

costs and capacities by reducing the number of factories and employees. It is 

difficult to fully assess the impact of these changes because of the short 

amount of time that has passed since reorganization and the low level of new 

vehicle sales. Moreover, Chrysler and GM are revaluing their assets and 

liabilities based on their reorganizations in 2009 and expect to prepare 

financial statements based on this effort in the coming months. 

Treasury does not plan to be involved in the day-to-day management of 

Chrysler and GM, but it plans to monitor the companies’ performance. 

Treasury developed several principles to guide its role as a shareholder, 

including the commitment that although Treasury reserves the right to set upfront conditions to protect taxpayers and promote financial stability, Treasury 

will oversee its financial interests in a hands-off, commercial manner. The 

conditions that Treasury set for the companies include requiring that a portion 

of their vehicles be manufactured in the United States and that they report to 

Treasury on the use of the TARP funding provided. Treasury officials told us 

that they are also requiring that Chrysler and GM submit financial information 

on a regular basis and that they plan to meet with the companies’ top 

management on a regular basis to discuss the companies’ financial condition. 

Treasury should make certain that its current approach for monitoring and 

selling its equity in Chrysler and GM fully addresses all important 

considerations financial and industry experts identified. For example, 

Treasury initially hired or consulted with a number of individuals with 

experience in investment banking or equity analysis to help assess Chrysler’s 

and GM’s financial condition and develop financing packages for the 

companies. Many of these individuals have recently left as the restructuring 

phase of Treasury’s work has been completed. Treasury will need to ensure 

these staff and any staff that depart in the future are replaced as needed with 

similarly qualified personnel. Also, Treasury does not currently contract with 

or employ outside firms with specialty expertise for its work with the auto 

industry but may need to do so in the future, to make sure sufficient expertise 

is available to oversee the government’s significant financial interests in 

Chrysler and GM. In addition, although Treasury officials told us they are 

considering all options for divesting the government’s ownership interests, 

including an initial public offering or private sale, they have focused primarily 

on a series of public offerings for GM and have not identified criteria for 

determining the optimal time and method to sell. Regardless of the option 

pursued, however, Treasury is unlikely to recover the entirety of its 

investment in Chrysler or GM, given that the companies’ values would have to 

grow substantially above what they have been in the past. 

View GAO-10-151 or key components.

For more information, contact Katherine A. 

Siggerud (sigguerdk@gao.gov) or A. Nicole 

Clowers (clowersa@gao.gov) at 

202-512-2834. 
Page i GAO-10-151 

Contents 

Letter 1

Scope and Methodology 3 

Background 5 

Chrysler and GM Have Addressed Some Challenges Important to 

Achieving Viability, but the Effect of These Actions Remains to 

Be Seen 10 

Treasury Does Not Plan to Be Involved in Chrysler’s or GM’s Dayto-Day Operations or Management, but It Plans to Closely 

Monitor the Companies’ Performance 14 

Treasury’s Approach for Monitoring and Selling Its Ownership 

Interest in Chrysler and GM Does Not Fully Address All 

Important Considerations Experts Identified 19 

Conclusions 28 

Recommendations for Executive Action 29 

Agency Comments and Our Evaluation 30 

Appendix I Financial and Industry Experts GAO Interviewed 34 

Appendix II Comments from the Department of the Treasury 35 

Appendix III GAO Contacts and Staff Acknowledgments 36 

Tables 

Table 1: TARP Funding Provided to the Auto Industry, as of 

September 20, 2009 6 

Table 2: Changes to Chrysler’s and GM’s U.S. Production Costs and 

Capacity 12 

Table 3: Chrysler’s Financial Reporting Requirements 17 

Table 4: GM’s Financial Reporting Requirements 17 

Table 5: Value of Chrysler and GM Equity Required for Treasury to 

Recoup Its Investment 27 

Figure 

Figure 1: Key Events in Treasury’s Assistance to the Auto Industry 

and Chrysler’s and GM’s Restructuring 9 

Troubled Asset Relief Program 
Abbreviations 

AIFP Automotive Industry Financing Program 

COP Congressional Oversight Panel 

EESA Emergency Economic Stabilization Act 

GM General Motors Company 

NAS National Academy of Sciences 

OFS Office of Financial Stability 

SEC Securities and Exchange Commission 

TARP Troubled Asset Relief Program 

UAW International Union, United Automobile, Aerospace and 

Agricultural Implement Workers of America 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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Page ii GAO-10-151 Troubled Asset Relief Program
Page 1 GAO-10-151 

ant 

 

 

United States Government Accountability Office

Washington, DC 20548 

November 2, 2009 

Congressional Committees 

After authorizing more than $80 billion in financial assistance to the ailing 

domestic automotive industry since December 2008, the Department of the 

Treasury (Treasury) is in the unprecedented position of having ownership 

stakes in two of the nation’s three largest auto manufacturers—Chrysler 

Group LLC (Chrysler) and General Motors Company (GM).1

 Although 

most automakers experienced declining sales in the last couple of years as

the economy slipped into a recession, the current economic conditions 

have particularly hurt the sales of Chrysler and GM, resulting in signific

financial losses and necessitating the use of billions of dollars of borrowed 

money or cash reserves to keep operating. In December 2008, the chief 

executive officers of Chrysler and GM testified before Congress that 

without federal assistance, their companies would likely run out of the 

cash needed to keep operating. 

Concerned that the collapse of one, or both, of these companies could 

pose a systemic risk to the nation’s economy, the previous Administration 

established the Automotive Industry Financing Program (AIFP) under the 

Troubled Asset Relief Program (TARP) in December 2008.2

 Through AIFP, 

Treasury provided loans to help Chrysler and GM continue operating as 

the companies restructured. In exchange for the funding it provided, 

1

Prior to bankruptcy reorganization, the companies’ legal names were Chrysler LLC and 

General Motors Corporation. Chrysler Group LLC and General Motors Company are new 

legal entities that were created through the bankruptcy process to purchase the operating 

assets of the pre-reorganization companies. The new companies also received some of the 

debts of the pre-reorganization companies, including a portion of the loans Treasury 

provided to the companies prior to bankruptcy filing. Throughout this report, in cases 

where such a distinction is important, we refer to the pre-reorganization companies as “old 

Chrysler” and “old GM,” and the post-reorganization companies as “new Chrysler” and 

“new GM.” The third domestic automaker, Ford Motor Company, has not requested 

assistance from Treasury. 

2

The Emergency Economic Stabilization Act of 2008 (EESA), Pub. L. No. 110-343, 122 Stat. 

3765 (2008), codified at 12 U.S.C. §§ 5201 et. seq., originally authorized Treasury to buy or 

guarantee up to $700 billion in troubled assets. The Helping Families Save Their Homes Act 

of 2009, Pub. L. No. 111-22, Div. A, Title IV, § 402(f), 123 Stat. 1632, 1658 (2009), codified at 

12 U.S.C. 5225(a)(3), amended the act and reduced the maximum allowable amount of 

outstanding troubled assets under the act by almost $1.3 billion, from $700 billion to 

$698.741 billion. 

Troubled Asset Relief Program 
 

Treasury received 9.85 percent equity in the new Chrysler,3 60.8 percent 

equity and $2.1 billion in preferred stock in the new GM, and about $13.8 

billion in debt obligations between the two companies.4

 The companies 

still struggle to remain competitive with other automakers and to regain 

market share. 

We have previously reported that in a market economy the federal role in 

aiding industrial sectors should generally be of limited duration and 

establish clear limits on the extent of government involvement. Regarding 

assistance to the auto industry, we have noted that Treasury should have a 

plan for ending its financial involvement with Chrysler and GM that 

indicates how it will both sell its equity and ensure adequate repayment 

for the financial assistance it provided.5

 The current Administration has 

stated that it is a “reluctant shareholder” in Chrysler and GM, but that it 

would be irresponsible to “[give] away the equity stake to which taxpayers 

were rightly entitled.”6

 As such, Treasury has said that in managing its 

equity it will seek to exit as soon as practicable, maximize return on 

investment, and foster strong companies that can be independently viable. 

As part of our statutorily mandated responsibilities for providing timely 

oversight of TARP, we are continuing to monitor Treasury’s assistance to 

the auto industry, including how Treasury is managing its equity in 

 

3

Treasury’s share in the company will become 8 percent if Fiat, another of Chrysler’s 

shareholders, meets fuel efficiency-related performance targets and is granted additional 

equity. 

4

Other parties that received equity stakes in the reorganized companies include the 

Canadian government, which provided financial assistance to the companies, and the auto 

workers union’s health care trust, which agreed to accept equity in the company in 

exchange for future monetary contributions. 

5

GAO, Troubled Relief Asset Program: June 2009 Status of Efforts to Address 

Transparency and Accountability, GAO-09-658 (Washington, D.C.: June 17, 2009). 

6

Ron Bloom, Senior Advisor, U. S. Department of the Treasury, written testimony before 

the Congressional Oversight Panel, Regarding Treasury’s Automotive Industry Financing 

Program, July 27, 2009. 

Page 2 GAO-10-151 Troubled Asset Relief Program
 

Chrysler and GM and how it plans to sell this equity.7 This report will 

explore the following issues related to Treasury’s ownership of Chrysler 

and GM: (1) steps Chrysler and GM have taken since December 2008 to 

reorganize, (2) Treasury’s oversight of its financial interests in Chrysler 

and GM, and (3) important considerations for Treasury in monitoring and 

selling its equity in the companies. 

To identify steps Chrysler and GM have taken since December 2008 to 

reorganize, we reviewed information on the companies’ finances and 

operations, including financial statements, select documents from their 

bankruptcy proceedings, and company-provided data, and interviewed 

representatives of the companies. 

Scope and 

Methodology 

To determine how Treasury will monitor its financial interests in Chrysler 

and GM, we reviewed transaction documents related to the restructuring 

of Chrysler and GM that Treasury was a party to, such as the secured 

credit agreements and shareholders’ agreements, which set forth 

Treasury’s rights with regard to the companies and certain requirements 

the companies must comply with. We also reviewed information on 

Treasury’s plans for overseeing its ownership interests in the companies, 

including White House and Treasury press releases, and testimony 

statements. In addition, we interviewed officials from Treasury’s Office of 

Financial Stability (OFS), which was established to administer TARP, 

about their plans to monitor the government’s financial interests, including 

Treasury’s enforcement of the reporting requirements that were 

established for Chrysler and GM. We did not, however, independently 

 

7

See our previous reports on TARP assistance to the auto industry: GAO, Auto Industry: 

Summary of Government Efforts and Automakers’ Restructuring to Date, GAO-09-553 

(Washington, D.C.: Apr. 23, 2009); Auto Industry: A Framework for Considering Federal 

Financial Assistance, GAO-09-247T (Washington, D.C.: Dec. 5, 2008); Auto Industry: A 

Framework for Considering Federal Financial Assistance, GAO-09-242T (Washington, 

D.C.: Dec. 4, 2008); and GAO-09-658. EESA requires GAO to report at least every 60 days on 

findings resulting from, among other things, oversight of TARP’s performance in meeting 

the purposes of the act, the financial condition and internal controls of TARP, the 

characteristics of both asset purchases and the disposition of assets acquired, TARP’s 

efficiency in using the funds appropriated for the program’s operation, and TARP’s 

compliance with applicable laws and regulations. This is the ninth report issued in 

compliance with that mandate. 

Page 3 GAO-10-151 Troubled Asset Relief Program
 

verify the processes and procedures Treasury has established to monitor 

and enforce the reporting requirements.8

To identify important considerations for Treasury in monitoring and 

determining how and when to sell its equity in Chrysler and GM, we 

conducted a review of the academic literature on government ownership 

of private entities, including both domestic and international cases of 

private equity investments, privatization, and nationalization, and 

reviewed analyses of the potential future value of Chrysler and GM and 

Treasury’s equity stake. We also interviewed individuals with expertise in 

the financial condition of domestic automakers, principles of corporate 

restructuring, and government ownership of private entities. The financial 

and business experts whose opinions are represented in this report were 

selected from a list of experts identified for us by the National Academy of 

Sciences (NAS) for our earlier report on challenges facing Chrysler and 

GM.9

 Of the panel of experts we interviewed for that report, we contacted 

a subset whose expertise was particularly relevant to structuring an exit 

strategy. In addition to individuals identified by NAS, we spoke with 

individuals NAS experts themselves identified as being knowledgeable in 

this area. We also added two experts with investment experience 

specifically in the auto industry. We chose experts in government 

management of investments in private companies by identifying former 

federal government officials who were involved in well-known cases of 

government assistance to private entities, such as the federal assistance 

provided to Chrysler in 1979. We conducted individual semistructured 

interviews with these individuals, both in person and by telephone. Once 

this review was completed, we analyzed the content of the literature and 

the interviews for recurring themes and summarized these common 

results. A list of the individuals we spoke with is provided in appendix I. 

We conducted this performance audit from August 2009 to November 2009 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

 

8

We are currently conducting a coordinated review with the Special Inspector General for 

TARP on U.S. government oversight of and interaction with companies in which the 

government has provided “exceptional assistance.” As part of this review, we will examine 

the internal controls Treasury has established to manage its portfolio of investments and its 

interaction with the institutions, which include Chrysler and GM. 

9

GAO-09-553. 

Page 4 GAO-10-151 Troubled Asset Relief Program
 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

Treasury’s decision to provide substantial amounts of funding to the auto 

industry—more than 12 percent of the TARP funds authorized to date—

and to accept equity in the companies as a form of repayment for a portion 

of the assistance reflects Treasury’s view of the importance of the industry 

to the financial health of the United States as a whole. The auto industry—

including automakers, dealerships, and automotive parts suppliers—

contributes substantially to the U.S. economy by, for example, directly 

employing about 1.7 million people, according to industry and government 

data.10 To help stabilize this industry and avoid economic disruptions, 

Treasury authorized $81.1 billion through AIFP from December 2008 

through June 2009 for the following purposes. 

Background 

• Funding to support automakers during restructuring. Treasury has 

provided financial assistance to Chrysler and GM to support their 

restructuring as they attempt to return to profitability. This assistance was 

provided in loans and equity investments in the companies. 

• Auto Supplier Support Program. Under this program, Chrysler and GM 

received funding for the purpose of ensuring payment to suppliers. The 

program was designed to ensure that automakers receive the parts and 

components they need to manufacture vehicles and that suppliers have 

access to liquidity on their receivables. 

• Warranty Commitment Program. This program was designed to 

mitigate consumer uncertainty about purchasing vehicles from the 

restructuring automakers by providing funding to guarantee the 

warranties on new vehicles purchased from them. Funds were provided to 

Chrysler and GM under this program but have been repaid in full because 

both were able to continue to honor consumer warranties. 

• Funding to support automotive finance companies. Treasury has 

provided funding to support Chrysler Financial and GMAC LLC, financial 

 

10See National Automobile Dealers Association, “NADA Data 2009: Economic Impact of 

America’s New-Car and New-Truck Dealers” (McLean, Va.: 2009) and United States 

Department of Labor, Bureau of Labor Statistics, Table B-12: Employees on Non-farm 

Payrolls by Detailed Industry, August 2009. 

Page 5 GAO-10-151 Troubled Asset Relief Program
 

services companies whose businesses include providing consumer 

financing for vehicle purchases and dealer financing for inventory. 

Chrysler Financial is following Treasury’s directive to liquidate its 

business and is planning to wind down its operations by the end of 2011. 

GMAC has agreed to provide Chrysler customers and dealers with 

financing for retail and wholesale purchases. 

Table 1 provides information on the funding levels Treasury authorized 

under AIFP, the amounts Chrysler, GM, and the finance companies have 

repaid, and Treasury’s plans to be repaid or otherwise compensated for 

the outstanding funds. Treasury officials have said the agency does not 

intend to provide more funding to Chrysler or GM. 

Table 1: TARP Funding Provided to the Auto Industry, as of September 20, 2009 

(Dollars in billions) 

Description of 

funding 

Authorized 

amount 

Repayments 

of principal

Interest and 

dividend 

Company payments Amount and form of future repayments 

Chrysler Loans to Chrysler for 

general business 

purposes and 

restructuring 

$12.5 0 0.052 A total of up to $7.1 billion will be repaid as a term 

loan, including $5.1 billion to be repaid within 8 

years and $2 billion to be repaid within 2.5 years. 

Treasury also received a 9.85 percent equity 

share in the new Chrysler. Treasury also has $5.4 

billion of debt in the old Chrysler, but it is not clear 

at this time whether this amount will be repaid.a

Supplier Support 

Program loan 

1.0 0 0.002 Amounts provided are due to be repaid by April 

2010. 

Warranty 

Commitment 

Program loan 

0.28 0.28 0.003 All funds have been repaid. 

Total $13.8 0.28 0.06

General 

Motors 

Loans to GM for 

general business 

purposes and 

restructuring 

49.5 0 0.168 A total of $6.7 billion will be repaid as a term loan. 

Treasury also received $2.1 billion in preferred 

stock, and 60.8 percent equity in the new GM. 

Treasury also has $986 million debt in the old 

GM, which it does not expect to be repaid. 

Supplier Support 

Program loan 

2.5 0 0.004 Amounts provided are due to be repaid by April 

2010. 

Warranty 

Commitment 

Program loan 

0.361 0.361 0 All funds have been repaid. 

Page 6 GAO-10-151 Troubled Asset Relief Program
 

Description of 

funding 

Authorized 

amount 

Repayments 

of principal

Interest and 

dividend 

Company payments Amount and form of future repayments 

Loan to participate in 

GMAC rights offering 

0.884 0 0.009 Treasury exchanged this loan for a portion of 

GM’s equity in GMAC. As a result, Treasury holds 

a 35.4 percent common equity interest in GMAC. 

The GM loan was terminated but GM paid $9 

million in interest on the loan to participate in 

GMAC rights offering before the loan was 

terminated. 

Total $53.24 0.36 0.18

Chrysler 

Financial 

Loan funded through 

Chrysler LB 

Receivables Trust 

1.5 1.5 0.007 Loan repaid in full plus about $7 million in 

interest.b

GMAC Preferred stock and 

convertible preferred 

stock 

12.5 Not 

applicable

0.43 Treasury may convert $7.5 billion of its preferred 

shares to common shares upon specific events 

such as public offerings. 

Total $81.1 $2.1 $0.68

Source: GAO analysis of Treasury information. 

Note: Numbers are affected by rounding. 

a

The $5.4 billion is composed of the original remaining loan and additional amounts provided as 

bankruptcy financing. Payment of this amount is contingent on receipt of distributions from Chrysler 

Financial in an amount equal to the greater of $1.375 billion or 40 percent of distributions. 

b

In lieu of warrants, Treasury received an additional note from Chrysler Financial. The initial 

aggregate principal amount of the note was $15 million, which Chrysler Financial has repaid. 

As a condition of the initial federal financial assistance provided in 

December 2008 and January 2009, the Bush Administration required that 

Chrysler and GM develop restructuring plans that would, among other 

things, identify how the companies plan to achieve and sustain long-term 

financial viability. President Obama rejected the restructuring plans that 

Chrysler and GM submitted in February 2009, and required the companies 

to develop more aggressive plans. After reviewing the revised plans, the 

President announced in April 2009 and June 2009 that the government 

would provide additional financial assistance to support Chrysler’s and 

GM’s restructuring efforts, respectively. To effectuate the restructuring 

plans, both companies filed voluntary petitions for reorganization under 

Chapter 11 of the U.S. Bankruptcy Code. Through the bankruptcy process, 

the newly organized Chrysler and GM purchased substantially all of the 

operating assets of the old companies. In June 2009 and July 2009, 

respectively, the new Chrysler and new GM emerged from the bankruptcy 

process with substantially less debt and with streamlined operations. The 

old companies, which retained very few assets but most of the liabilities, 

remain in bankruptcy, where their remaining liabilities are being dealt 

with. These liabilities include a portion of the loans Treasury provided to 

the companies prior to bankruptcy in the amounts of $5.4 billion for 

Page 7 GAO-10-151 Troubled Asset Relief Program
 

Chrysler and $986 million for GM. As noted, Treasury has stated that it has 

no plans to provide additional assistance to Chrysler and GM. Figure 1 

describes other key events in the funding and restructuring of the auto 

companies. 

Page 8 GAO-10-151 Troubled Asset Relief Program
 

Figure 1: Key Events in Treasury’s Assistance to the Auto Industry and Chrysler’s and GM’s Restructuring 

2008

2009

Date Chrysler actions GM actions

2008

2009

December Chrysler and GM chief executive officers testify before Congress that without federal assistance, their companies

will not have the cash necessary to continue operations.

Treasury announces it will use TARP funds to establish the Auto Industry Financing Program to stabilize the U.S. 

automotive industry and avoid disruptions that would pose systemic risk to the nation’s economy.

December 19

December 31 Treasury agrees to provide $13.4 billion in AIFP funding to GM.

January 2

February 17

March 30

April 22

April 29

April 3

April 7

March 19

April 30

June 1

June 10

July 5

July 10

Treasury lends $4.0 billion in AIFP funding to Chrysler.

Treasury announces the Auto Supplier Support Program.

White House announces that Chrysler and GM’s restructuring plans do not establish a credible path to viability and do 

not merit additional government investment. The companies are given additional time to show greater progress.

Chrysler files voluntary petitions under Chapter 11 of the 

U.S. Bankruptcy Code. 

 White House announces it will provide $8.5 billion 

through loans and equity investments in the company to 

support Chrysler’s restructuring.

Bankruptcy judge approves Chrysler’s restructuring 

proposal.

New Chrysler purchases substantially all of old 

Chrysler’s assets.

Bankruptcy judge approves GM’s restructuring proposal.

New GM acquires substantially all of old GM’s assets.

GM files voluntary petitions under Chapter 11 of the U.S. 

Bankruptcy Code.

 Treasury announces it will provide up to $30.1 billion to 

GM through loans and equity investments to support a

bankruptcy proceeding and to transition GM through restructuring. 

Source: GAO analysis of Treasury information.

Chrysler and GM submit restructuring plans to Treasury as required by their loan agreements.

White House announces the Warranty Commitment Program.

Treasury lends $2 billion in additional funding to GM.

 GM and Treasury execute a credit agreement to lend up 

to $3.5 billion to GM for the Auto Supplier Support Program.a

 Chrysler and Treasury execute a credit agreement to lend up

to $1.5 billion to Chrysler for the Auto Supplier Support Program.b

 Treasury lends $280 million to Chrysler under the

Warranty Commitment Program.

May 20

May 27

Treasury lends $4 billion in additional funding to GM.

 Treasury lends $361 million to GM under the Warranty

Commitment Program.

NOV

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

DEC

 Treasury executes a $7.1 billion credit agreement with

new Chrysler.

a

This amount was subsequently reduced to $2.5 billion. 

b

This amount was subsequently reduced to $1 billion. 

Page 9 GAO-10-151 Troubled Asset Relief Program
 

Since the condition of the domestic auto industry first came to the 

forefront of national attention in December 2008, Chrysler and GM have 

made changes to address key challenges to achieving viability, but the 

effect that these actions will have on the companies remains to be seen. As 

we previously reported, a number of operational and financial challenges 

stand in the way of Chrysler’s and GM’s return to profitability.11 Some of 

these challenges are beyond the companies’ control, such as current 

economic conditions and limited credit availability. However, other 

factors the companies can exert more control over include the companies’ 

debt levels, dealership networks, and production costs and capacity. Aided 

by substantial government assistance and bankruptcy reorganization, they 

have begun to address a number of these challenges. Although the 

companies’ restructuring efforts started before receiving government 

assistance under TARP, our analysis focuses on the period between first 

receiving TARP assistance (around the end of 2008) and after bankruptcy 

reorganization (June 2009 and July 2009 for Chrysler and GM, 

respectively). The following are some key challenges that Chrysler and GM 

have begun to address. 

Chrysler and GM 

Have Addressed Some 

Challenges Important 

to Achieving Viability, 

but the Effect of 

These Actions 

Remains to Be Seen 

• Reducing debt. Through the bankruptcy process, Chrysler and GM 

eliminated a substantial amount of their long-term financial liabilities, 

including debt owed to bank lenders and bondholders. In our previous 

work, we discussed the importance of reducing debt for companies to 

achieve long-term viability. By reducing the amount the companies pay in 

interest expense, cash flow is improved, freeing up more money for 

research and development and other activities that can help the businesses 

prosper. The precise amount of the companies’ total debt reduction is not 

known because the value of some debts will not be determined until the 

companies’ post-reorganization accounting is complete. However, some 

reduced or eliminated debts whose values are known include $6.9 billion 

of secured bank debt owed by old Chrysler, of which $2 billion was repaid 

and none carried forward to new Chrysler; $5.9 billion of secured bank 

debt owed by old GM, substantially all of which was repaid by old GM, 

leaving new GM with none of this debt; substantial reductions of the 

companies’ monetary obligations to the trusts established to provide 

health care benefits to retirees of the International Union, United 

Automobile, Aerospace and Agricultural Implement Workers of America 

(UAW); and about $27 billion in unsecured GM bondholder debt and $2 

billion in unsecured Chrysler obligations, which stayed as a liability of the 

 

11GAO-09-553. 

Page 10 GAO-10-151 Troubled Asset Relief Program
 

old GM and old Chrysler, leaving new GM and new Chrysler with none of 

this debt. 

• Reducing the number of brands and models. GM is reducing its North 

American brands from eight to four.12 In November 2007, Chrysler 

announced it would eliminate four models within its three primary 

brands—Chrysler, Dodge, and Jeep—and in October 2009 it announced 

that it would create a fourth brand by splitting the Ram brand out of the 

Dodge brand. As we have previously reported, advantages of reducing 

brands and models include eliminating costs such as factory tooling and 

product development, reducing intracompany competition for sales of 

similar models, and allowing more focus and resources on the remaining 

models’ quality, image, and performance. 

• Rationalizing dealership networks to align with sales volumes. Both 

Chrysler and GM have made cuts to their dealership networks since yearend 2008. As we reported in April, the companies’ dealer networks were 

too large to be supported by recent sales levels. As of April 2009, Chrysler, 

Ford, and GM dealerships—most of which are independently owned and 

operated—were more numerous and, in general, sold half or fewer 

vehicles per dealership than dealerships selling vehicles from foreign 

automakers. Higher sales per store allow for a greater return on the 

dealer’s fixed costs of running the business, allowing for more investment 

in facilities and advertising—which ultimately benefits the automaker by 

improving the price for which its cars are sold. As of June 30, 2009, shortly 

after the new Chrysler emerged from bankruptcy, Chrysler had reduced its 

U.S. dealerships to 2,382, a reduction of about 28 percent from the yearend 2008 level of 3,298.13 As of July 2009, when the new GM emerged from 

bankruptcy, its number of dealers had declined to 6,039 through normal 

attrition, down from 6,375 at year-end 2008. GM is executing “wind-down” 

agreements with another approximately 1,300 dealerships and expects 

another 600 Saturn, Saab, or Hummer dealerships to be transferred to 

another manufacturer or be phased out. With additional normal attrition, 

GM expects to have between 3,600 and 3,800 dealerships by the end of 

2010, which will represent a 44 percent reduction from 2008 year-end 

numbers. 

 

12Most recently, in October 2009, GM reached an agreement to sell its Hummer brand to a 

Chinese company, which is slated to take over operations in 2012. 

13Chrysler began downsizing its operations prior to filing for bankruptcy. For instance, at 

year-end 2006, it had 3,749 dealerships. 

Page 11 GAO-10-151 Troubled Asset Relief Program
 

• Reducing production costs and capacity. Both companies have made 

reductions in their production costs and capacity since year-end 2008, 

according to company-provided information. In our April report, we noted 

such reductions are important because the companies’ pre-reorganization 

cost structures were not sustainable given the decline in their sales and 

market shares in recent years.14 Table 2 shows the reductions the 

companies made between year-end 2008 and the dates they emerged from 

bankruptcy. In addition to the reductions made during these time periods, 

the companies implemented restructuring efforts prior to 2008 and plan 

additional reductions in the future. For instance, Chrysler closed two 

factories, reduced a number of shifts, and cut nearly 29,000 hourly, 

salaried, and supplemental employees between year-end 2006 and yearend 2008. GM announced in September 2009 that it will add a third shift at 

three U.S. assembly plants as part of a plan to close other plants to 

increase the efficiency of its manufacturing operations. Chrysler and GM 

have also reached agreements with the UAW, in accordance with the terms 

of the companies’ prebankruptcy loans from Treasury, which will result in 

further reductions in production costs. Under these terms, the companies 

were required to use their best efforts to reduce total compensation paid 

to U.S. employees, including wages and benefits, to be comparable with 

the total compensation Honda, Nissan, or Toyota pays to employees at 

their U.S. facilities. The companies were also required to use their best 

efforts to make changes to work rules to be comparable with the work 

rules of Honda’s, Nissan’s, or Toyota’s U.S. facilities. Changes the UAW 

agreed to as part of restructuring included cancellation of cost-of-living 

adjustments for current workers and restructuring of skilled trade 

classifications, among other things. 

Table 2: Changes to Chrysler’s and GM’s U.S. Production Costs and Capacity 

Chrysler GM 

Production capacityaYear-end 2008 

After 

reorganization

Percent 

reduction Year-end 2008

After 

reorganization

Percent 

reduction

Factories 21 20b4.8% 47 34 27.7%

Hourly employees 24,135 21,082 12.6% 61,999 54,391 12.3%

Salaried employees 10,691 10,307 3.6% 29,655 27,091 8.6%

Source: GAO presentation of Chrysler and GM data. 

a

According to Treasury, these numbers will likely continue to change in the future, since the 

companies’ restructuring efforts are not complete. 

b

Four additional factories that remain with old Chrysler are planned for future closure. 

 

14GAO-09-553. 

Page 12 GAO-10-151 Troubled Asset Relief Program
 

Whether and to what extent these changes will improve Chrysler’s and 

GM’s profitability and long-term viability remains to be seen. Many 

elements of a company’s financial statements are also used in measures of 

financial health, but neither Chrysler nor GM has finalized new financial 

statements based on their reorganization. Chrysler and GM have agreed to 

provide certain financial information, as outlined in agreements between 

Chrysler and its shareholders, including Treasury, and between GM and 

the Securities and Exchange Commission (SEC). Consistent with the 

agreements, Chrysler and GM plan to complete the process of determining 

the fair value of the assets and liabilities transferred to the new companies 

for their audited 2009 year-end financial statements, which they expect to 

complete by April 2010 and March 2010, respectively.15 Chrysler will 

provide its 2009 audited annual financial statement to Treasury and its 

other shareholders, and GM will provide its 2009 audited annual financial 

statement to SEC, where it will also be available to the public. Chrysler 

will begin filing quarterly and annual financial reports with SEC beginning 

with its 2010 audited annual financial statements, which will be publicly 

available through SEC. Before audited annual financial statements are 

filed with SEC, Chrysler and GM will make other select information 

publicly available. 

Moreover, whether enough time has passed for the impact of the structural 

changes to be seen is unlikely, especially given that the automakers have 

not completed restructuring, the economy is still recovering, and new 

vehicle purchases remain at low levels. For instance, although the federal 

Car Allowance Rebate System program resulted in a sales spike in 

August,16 September sales returned to historically low levels. These and 

other challenges are likely to delay the companies’ recovery beyond what 

it would be under more favorable economic circumstances. 

 

15Under an agreement between new GM and the Securities and Exchange Commission 

(SEC), new GM will file by March 31, 2010, a quarterly financial report for the third quarter 

of 2009 and an annual financial report for 2009. According to SEC, because GM is a newly 

formed entity with only five shareholders, it is not required to file periodic or current 

reports. Also, according to SEC, it does not have any written or oral agreements with 

Chrysler, which was not a public company prior to its reorganization and is not currently a 

public company, on future filing requirements. 

16The Car Allowance Rebate System is more commonly referred to as Cash for Clunkers. 

Page 13 GAO-10-151 Troubled Asset Relief Program
 

Treasury, which has a sizable financial stake in Chrysler and GM, does not 

plan to be involved in the day-to-day management of the companies, but it 

has established certain requirements that will be in effect as long as it 

holds debt or equity in the companies.17 Treasury has distinct rights as 

both a creditor and an equity owner. Its rights as a creditor are 

documented in the secured credit agreements, which set forth the terms 

and provisions of the loans Treasury provided to new Chrysler and new 

GM. Its rights as an equity owner are documented in a number of 

transactional documents related to the formation of the new Chrysler and 

the new GM, including shareholders’ agreements, equity registration rights 

agreements, and organizational documents. Treasury’s role as an equity 

owner focuses on monitoring the financial health of the companies in 

order to protect the value of Treasury’s equity stake.18 Treasury developed 

several principles to guide its role as an equity owner, including the 

commitment that, although Treasury reserves the right to set up-front 

conditions to protect taxpayers and promote financial stability, Treasury 

plans to oversee its financial interests in a commercial manner, in which it 

will focus primarily on maximizing its return and take a hands-off 

approach to day-to-day management. Treasury plans to reserve its 

involvement for major transactions such as the sale of a controlling share 

of the companies. Treasury’s role as a creditor is not as clearly delineated, 

but much like in its role as equity owner, Treasury has said it will focus on 

monitoring the companies’ financial health. 

Treasury Does Not 

Plan to Be Involved in 

Chrysler’s or GM’s 

Day-to-Day 

Operations or 

Management, but It 

Plans to Closely 

Monitor the 

Companies’ 

Performance 

Conditions set by Treasury in the credit agreements include requiring that 

the companies comply with provisions applicable to companies receiving 

TARP assistance, in accordance with the Emergency Economic 

Stabilization Act (EESA), as well as other requirements that are specific to 

 

17Our discussion focuses on the financial assistance Treasury provided to fund the 

companies’ operations and restructuring because it represents the most substantial portion 

of the assistance the companies received. It does not address the conditions of the smaller 

amounts provided under the Supplier Support Program and the Warranty Commitment 

Program. 

18The Congressional Oversight Panel was created as part of TARP to review the current 

state of financial markets and the regulatory system. The panel is empowered to hold 

hearings, review official data, and write reports on actions taken by Treasury and financial 

institutions and their effect on the economy. The Congressional Oversight Panel issued a 

report on federal assistance provided to the auto industry in September 2009. See 

Congressional Oversight Panel, September Oversight Report: The Use of TARP Funds in 

the Support and Reorganization of the Domestic Automotive Industry (Washington, D.C.: 

Sept. 9, 2009). 

Page 14 GAO-10-151 Troubled Asset Relief Program
 

Chrysler and GM.19 According to the agreements, Chrysler and GM must 

do the following: 

 

• Produce a portion of their vehicles in the United States. Chrysler 

must either manufacture 40 percent of its U.S. sales volume in the United 

States or its U.S. production volume must be at least 90 percent of its 2008 

U.S. production volume. GM agrees to use its commercially reasonable 

best efforts to ensure that the volume of manufacturing conducted in the 

United States is consistent with at least 90 percent of the level envisioned 

in GM’s business plan. 

• Comply with the executive compensation requirements of EESA.20

These requirements state that bonuses or incentive compensation paid to 

any of the senior executive officers or the next 20 most highly 

compensated employees based on materially inaccurate earnings must be 

repaid, no golden parachute payments may be made to a senior executive 

officer or any of the next five most highly compensated employees, 

compensation in excess of $500,000 per executive may not be deducted for 

tax purposes, and the companies must establish a compensation 

committee of independent directors to review employee compensation 

plans and the risks posed by these plans. 

• Have an expense policy that is in compliance with TARP standards 

for compensation and corporate governance. The policy must govern 

hosting and sponsoring for conferences and events, travel 

accommodations and expenditures, office or facility renovations and 

relocations, and entertainment and holiday parties, among other things. 

• Report to Treasury on the use of government funds. The companies 

are to provide Treasury with a report each quarter setting forth in 

reasonable detail the actual use of the TARP funding they received upon 

exiting from bankruptcy. 

19As noted, GAO and the Special Inspector General for the Troubled Asset Relief Program 

are conducting coordinated work on Treasury’s oversight of Chrysler’s and GM’s 

compliance with these requirements. 

20Section 111 of EESA, as amended by the American Recovery and Reinvestment Act of 

2009, Pub. L. No. 111-5, Div. B, Title VII, 123 Stat. 115, 516-520 (2009), codified at 12 U.S.C § 

5221, prescribes certain standards for executive compensation and corporate governance 

for recipients of financial assistance under TARP. Treasury published an interim final rule 

setting forth the applicable compensation and corporate governance standards (74 Fed. 

Reg. 28,394, June 15, 2009, codified at 31 C.F.R. Part 30). 

Page 15 GAO-10-151 Troubled Asset Relief Program
 

• Have internal controls to ensure compliance with the 

requirements. The companies are to promptly establish internal controls 

to provide reasonable assurance of compliance in all material respects 

with each of the credit agreement’s requirements for executive privileges 

and compensation, aircraft, expenses, and the Employ American Workers 

Act.21 The companies must also have documentation of these controls and 

the companies’ compliance with them. 

• Report on events related to pension plans. The companies must 

report to Treasury if actions occur that could result in the companies 

failing to meet the minimum funding requirements for their pension plans, 

or if the companies plan to terminate any of their plans.22

To protect the value of its equity share and the likelihood of loan 

repayment, Treasury has also established requirements under which the 

companies must report financial information, and it intends to use this 

information to closely monitor the financial condition of Chrysler and GM. 

The financial reporting requirements are set forth in Treasury’s credit 

agreements with the companies and other agreements that specify the 

rights of the companies and their shareholders, which include Treasury 

and other parties.23 GM is also subject to additional reporting requirements 

related to the reserve portion of its loan from Treasury that is being held in 

escrow.24 Treasury has agreed with the companies on additional financial, 

managerial, and operating information, which the companies will provide 

in monthly reporting packages, along with items specified in the 

agreements. Tables 3 and 4 provide details on Chrysler’s and GM’s 

reporting requirements. 

 

21The Employ American Workers Act was included in the American Recovery and Reinvestment 

Act of 2009, Pub. L. No. 111-5, Div. A, Title XVI, § 1611, 123 Stat. 115, 305 (2009). 

22GAO has ongoing work reviewing the state of the automakers’ pension plans and the 

potential liabilities to the federal government should the plans be terminated. We plan to 

issue this report in early 2010. 

23In the case of Chrysler, the corresponding document is the Amended and Restated 

Limited Liability Company Operating Agreement of Chrysler Group LLC, and in the case of 

GM, the corresponding document is the Shareholders Agreement by and among General 

Motors Company, United States Department of the Treasury, 7176384 Canada Inc., and 

UAW Retiree Medical Benefits Trust. Chrysler’s and GM’s reporting requirements are not 

identical because each agreement was negotiated separately and, in the case of the 

operating and shareholders’ agreements, with the input of the shareholders. 

24Of the $30.1 billion that Treasury provided to GM at its bankruptcy filing, $16.4 billion was 

held in escrow to be accessed by GM on an as-needed basis with the consent of Treasury. 

As of October 5, 2009, GM had requested and received $3 billion from the escrow account. 

Page 16 GAO-10-151 Troubled Asset Relief Program
 

Table 3: Chrysler’s Financial Reporting Requirements 

Requirements Treasury established as creditor 

Until repayment of the loan, Chrysler must provide to Treasury 

• its consolidated balance sheet and the related consolidated statements of income 

and cash flow, on a quarterly and annual basis, and 

• updates to its schedules of real property, mortgaged property, pledged equity and 

notes, subsidiaries, and mortgage filing offices (beginning in 2010). 

Requirements Treasury established as equity owner 

As long as Treasury holds its initial membership shares in Chrysler, Chrysler must 

provide 

• public reports containing quarterly and annual financial information, and 

• quarterly and annual financial reports to the Securities and Exchange Commission 

(beginning with its 2010 audited annual financial statements). 

As long as Treasury holds more than 5 percent equity, Chrysler must provide to Treasury

• monthly, quarterly, and annual management financial reports summarizing results of 

the company for the period and comparing these results with the annual budget, and

• unaudited quarterly and audited annual balance sheets and related statements of 

income and cash flow. 

Source: GAO presentation of Treasury information. 

Table 4: GM’s Financial Reporting Requirements 

Requirements Treasury established as creditor 

Until repayment of the loan, GM must provide to Treasury 

• its consolidated balance sheet and the related consolidated statements of income 

and cash flow, on an annual (audited) and quarterly basis (unaudited), 

• copies of any financial statements or reports GM is required to file with the 

Securities and Exchange Commission, and 

• other information that Treasury might periodically request. 

Until the balance of GM’s escrow account reaches zero or the escrow account’s 

expiration on June 30, 2010, GM must provide to Treasury 

• biweekly 13-week forecasts, 

• monthly liquidity status reports, and 

• monthly budgets covering a 5-year period. 

Requirements Treasury established as equity owner 

As long as Treasury owns at least 10 percent of GM’s common stock, GM must provide 

to Treasury 

• all financial statements, budgets, reports, liquidity statements, materials, data, and 

other information pursuant to Section 5 of the credit agreement, and 

• a monthly report, the format and content of which Treasury has the right to specify. 

Source: GAO presentation of Treasury information. 

Page 17 GAO-10-151 Troubled Asset Relief Program
 

According to Treasury officials, they plan to review and analyze the 

reports they receive under creditor and equity owner requirements to 

identify areas of concern, such as actual market share lagging behind the 

projected market share, an excess of inventory, or other signs that 

business is foundering. Treasury does not have authority to direct the 

companies to take specific actions to address such findings, but Treasury 

said it plans to notify the companies’ management and the Secretary of the 

Treasury if it sees any cause for concern in the financial reports. In 

addition to reviewing financial information, Treasury’s team of staff 

responsible for overseeing AIFP (subsequently referred to as the auto 

team) plans to meet monthly via teleconference and quarterly in person 

with the companies’ top management to discuss the companies’ progress 

against their restructuring plans. Important findings that result from the 

review of financial reports or management meetings will also be conveyed 

to key staff in OFS and other Treasury offices with responsibilities for 

managing TARP investments. Treasury also intends to use financial 

reports as a basis for decisions on how and when to sell its equity in the 

companies, as discussed below. 

While Treasury has stated that it plans to manage its investments in 

Chrysler and GM in a hands-off manner and will not interfere in day-to-day 

operations of the companies, Chrysler and GM will be subject to 

requirements regarding compensation, expenses, and reporting that other 

auto companies are not. For example, as discussed above, each company 

is subject to certain requirements about the vehicles it is to produce, such 

as the requirement to produce a portion of its vehicles in the United States. 

In addition, Chrysler’s shareholders, including Treasury, have agreed that 

Fiat’s equity stake in Chrysler will increase if Chrysler meets certain 

benchmarks, such as producing a vehicle that achieves a fuel economy of 

40 miles per gallon or producing a new engine in the United States.25

Treasury officials stated that they established such up-front conditions not 

 

25As part of its reorganization, Chrysler arranged an alliance with the Italian automaker 

Fiat, whereby Fiat is contributing intellectual property and “know-how” to Chrysler in 

exchange for a 20 percent equity share in the reorganized company. Fiat will have the right 

to earn up to 15 percent in additional equity in three tranches of 5 percent each in exchange 

for meeting performance metrics, including introducing a vehicle produced at a Chrysler 

factory in the United States that performs at 40 miles per gallon; providing Chrysler with a 

distribution network in numerous foreign jurisdictions; and manufacturing state-of-the-art, 

next-generation engines at a U.S. Chrysler facility. Fiat will also hold an option to acquire 

up to an additional 16 percent fully diluted equity interest in the restructured Chrysler. Fiat 

may exercise this option and exceed 50 percent ownership in Chrysler once Treasury’s loan 

has been repaid in full. 

Page 18 GAO-10-151 Troubled Asset Relief Program
 

solely to protect Treasury’s financial interests as a creditor and equity 

owner but also to reflect the Administration's views on responsibly 

utilizing taxpayer resources for these companies. While Treasury has 

stated it does not plan to manage its stake in Chrysler or GM to achieve 

social policy goals, these requirements and covenants to which the 

companies are subject indicate the challenges Treasury has faced and 

likely will face in balancing its roles. 

Treasury’s general goals of exiting as soon as practicable, maximizing 

return on investment, and improving the strength and viability of Chrysler 

and GM are reasonable but possibly competing, according to the group of 

financial and industry experts we spoke with. For example, if Treasury 

sells its stake as soon as practicable, it may not maximize its return 

because too little time may have elapsed to demonstrate to investors the 

companies’ potential for future profitability. Similarly, maximizing return 

on investment might require actions that do not contribute to making the 

companies strong and viable—for example, if Chrysler or GM does not 

return to profitability, Treasury may need to act to liquidate the 

companies, with the proceeds divided among its shareholders and 

creditors, to maximize its return on investment. Treasury will ultimately 

have to address these inherent trade-offs, decide which goal is most 

important, and then manage its interest in a way that prioritizes that goal 

over others. Treasury officials told us that they have considered these 

trade-offs and scenarios, including the worst-case scenario of Chrysler and 

GM not attaining long-term viability, and that they intend to balance these 

competing goals when deciding when and how to exit. 

Treasury’s Approach 

for Monitoring and 

Selling Its Ownership 

Interest in Chrysler 

and GM Does Not 

Fully Address All 

Important 

Considerations 

Experts Identified 

Treasury’s current approach for monitoring its equity in Chrysler and GM 

does not fully address the considerations that our group of experts 

identified as important. In particular: 

• Retain necessary expertise. Experts stressed that it is critical for 

Treasury to employ or contract with individuals with experience managing 

and selling equity in private companies. Individuals with investment, 

equity, and capital market backgrounds should be available to provide 

advice and expertise on the oversight and sale of Treasury’s equity. This is 

crucial because prior to TARP, Treasury did not typically buy and sell 

stakes in private companies, so it has needed to employ appropriate 

personnel and to retain consultants, such as investment bankers and 

private equity analysts and firms, who are knowledgeable about such 

investment decisions. One expert we interviewed noted that housing such 

individuals in a program office created specifically and solely to oversee 

Page 19 GAO-10-151 Troubled Asset Relief Program
 

the government’s investment in the companies could be beneficial. 

Program staff would be devoted solely to this purpose, and staff turnover 

would be low so that institutional knowledge would be preserved over the 

life of the program. The literature also stressed the importance of 

designating staff to oversee equity sales. 

In assessing Chrysler’s and GM’s financial condition and future prospects 

and putting together financing packages for the companies, Treasury hired 

or consulted with a number of individuals with experience in investment 

banking, equity analysis, and the auto industry, but it has not established a 

program office to oversee its investment in the auto companies. As with 

the rest of the TARP programs, OFS oversees the investment in the auto 

companies. Some OFS employees work exclusively on the automotive 

companies, while others divide their time among multiple TARP programs. 

While the auto team has experienced a significant decline in its number of 

staff, and presently has limited engagements with outside firms with 

specialty expertise such as investment banking or equity analysis to assist 

in its management of its investment in the auto companies, Treasury 

officials stated that the rest of OFS is available to “backfill” as necessary 

and acts as a program office for Treasury’s investment in the auto 

industry. However, OFS is not a dedicated program office for overseeing 

Treasury’s investment in Chrysler and GM, in that it has responsibilities for 

Treasury’s investments in other companies. Treasury officials also stated 

that the reduction in the number of staff on the auto team has been a 

reflection of the team’s reduced workload now that the intensive process 

of restructuring the companies is over and that the size of the team 

required for monitoring the government’s investment is smaller than for a 

restructuring process. 

Because of the particular needs of the auto companies and the 

unprecedented nature of providing such assistance, Treasury hired or 

contracted with a number of individuals with expertise in the auto 

industry, equity investment, and relevant areas of law throughout the first 

half of calendar year 2009 as Treasury assessed Chrysler’s and GM’s 

financial condition, assembled financing packages for the companies, and 

helped with restructuring efforts. When Treasury was heavily involved in 

the restructuring of the companies, Treasury’s auto team consisted of 12 

professional staff and 4 administrative staff, and it used the services of 

investment banking, consulting, and law firms. Since those agreements 

have been finalized and the workload has declined, two-thirds of the 

original professional staff has left, leaving Treasury with 4 of the original 

professional staff dedicated to auto issues, other OFS staff who have also 

helped monitor these investments, and limited use of investment or 

Page 20 GAO-10-151 Troubled Asset Relief Program
 

industry consultants. The leader of the auto team, who also serves as a 

senior adviser to the President on the auto industry, was recently 

appointed Senior Counselor for Manufacturing Policy, requiring him to 

split his time between the auto team and his new role. Moreover, Treasury 

officials told us that there will likely be additional staff reductions in the 

future because they plan to disband the auto team over time as other OFS 

staff assume the role of monitoring the financial condition of the 

companies. In commenting on a draft of this report, Treasury officials 

stated that in light of recent and expected staff turnover, they are prepared 

to hire personnel from within Treasury or externally to fill Treasury’s 

monitoring function. Nonetheless, given the wind-down of the auto team—

and the associated loss of dedicated staff with industry- and companyspecific knowledge and expertise—we are concerned that Treasury may 

not have sufficient expertise to actively oversee and protect the 

government’s ownership interests, including determining when and how to 

divest these interests. 

In general, Treasury has faced challenges hiring the full complement of 

staff necessary to administer the TARP programs, in part because qualified 

candidates can often find a more competitive salary with a financial 

regulator, which has the authority to establish its own compensation 

programs without regard to certain requirements applicable to executive 

branch agencies. We have reported on the importance of Treasury 

documenting the skills and competencies it needs to administer the 

program and continuing to expeditiously hire personnel.26 The quality of 

human capital policies and practices including, but not limited to, hiring 

affects the control environment. A strong control environment will 

depend, in part, on the managerial and other staff hired.27 Treasury has 

made progress in hiring staff to administer TARP duties, but Treasury 

officials have not formally evaluated whether the staffing level to oversee 

AIFP is appropriate for their current and projected needs. Officials said 

that they had considered future needs and determined that Treasury’s 

monitoring role could be achieved with fewer staff. In response to a 

request for documentation of their evaluation of staffing needs, Treasury 

provided us with a document showing the current and projected number 

of staff working on AIFP, but this document did not show how Treasury 

 

26GAO, Troubled Asset Relief Program: Status of Efforts to Address Transparency and 

Accountability Issues, GAO-09-296 (Washington, D.C.: Jan. 30, 2009). 

27GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

Page 21 GAO-10-151 Troubled Asset Relief Program
 

determined the appropriate number of staff or areas of expertise that 

would be needed for future workloads. In commenting on a draft of this 

report, Treasury officials stated that they had not had difficulty hiring 

qualified professionals to work on the auto team and did not anticipate 

having difficulties finding qualified staff in the future should the need arise 

for additional hiring. 

• Monitor and communicate company, industry, and economic 

indicators. All of the experts we spoke with emphasized the importance 

of monitoring company indicators such as financial and operating 

performance, automotive industry-wide indicators such as vehicle sales, 

and broader economic indicators such as interest rates and consumer 

spending. Monitoring these indicators allows investors, including 

Treasury, to determine how well the companies, and in turn the 

investment, are performing in relation to the rest of the industry. It also 

allows an investor to determine how receptive the market would be to an 

equity sale, something that contributes to the price at which the investor 

can sell. Some experts also noted that Treasury should assign an 

individual with expertise in investment banking or private equity to be in 

charge of monitoring these metrics, which Treasury officials told us they 

had done. In addition to monitoring the investment, communicating a 

clearly articulated vision for TARP programs is important, as we have 

previously reported. Understanding the different TARP programs and the 

distinct rationale for each can be difficult for Congress, the markets, and 

the public, because many of the programs address specific developments 

and have similar guidelines and terms. Specifically for AIFP, what 

Treasury’s goals are for its investment in Chrysler and GM, and in turn, 

which indicators and metrics are necessary to determine progress in 

achieving these goals, is important information for Congress and the 

public to have. Although Treasury provides public information on 

activities in the TARP programs, including AIFP, through its legally 

mandated monthly reports to Congress, transaction reports, and others, 

these reports do not provide information on the indicators Treasury plans 

to use in assessing its goals for its auto investments. Identifying these 

indicators for Congress, and sharing as much of this information as 

possible, while still respecting the need for certain business sensitive 

information not to be released, could help Congress and the public better 

understand whether the investment in the auto companies has been 

successful. 

Treasury’s auto team plans to closely monitor the performance of Chrysler 

and GM by way of financial reports from the companies such as balance 

sheets and liquidity statements, which, in general, measure the financial 

health of a company at the time of the statement. It also plans to monitor 

Page 22 GAO-10-151 Troubled Asset Relief Program
 

industry and broader economic indicators. The auto team plans to use this 

information to alert Chrysler and GM management to any problematic 

areas in the companies, and to help determine the best time and strategy 

for divesting the government’s interest. Finally, Treasury officials have not 

informed Congress which components of the reporting package will be 

shared or how they plan to use the information contained in these 

packages to assess and monitor the companies’ performance. In 

commenting on a draft of this report, Treasury noted that it will not make 

the components of these reports public because the release of certain 

information could put Chrysler and GM at a competitive disadvantage, 

thereby harming the potential recovery of taxpayer funds. Treasury 

further noted that the companies will publicly report on certain financial 

information—similar to what publicly traded companies report—in the 

future. 

• To the extent possible, determine the optimal time and method to 

divest. One of the key components of an exit strategy is determining how 

and when to sell the investment. Given the many different ways to dispose 

of equity—through public sales, private negotiated sales, all at once, or in 

batches—experts noted that the seller’s needs should inform decisions on 

which approach is most appropriate. For example, if an investor is 

interested in selling quickly but the company has not demonstrated the 

level of performance necessary for a successful initial public offering 

(IPO), in which the company first sells stock to the public, the investor 

should consider other sale options, such as a private sale. According to 

experts, a successful IPO requires that the companies show signs of 

earnings growth and future profitability, something that will take a 

considerable amount of time for Chrysler and GM, as they only recently 

emerged from bankruptcy. Attracting investors to the market is essential 

because lack of sufficient investor interest may result in depressed value 

of shares. Experts noted that a convergence of factors related both to 

financial markets and to the company itself create an ideal window for an 

IPO; this window can quickly open and close and cannot easily be 

predicted. This requires constant monitoring of up-to-date company, 

industry, and economic indicators when an investor is considering when 

and how to sell. As Treasury evaluates these indicators, considering all 

possible sale strategies is important. 

Members of the auto team said that they plan to consider indicators such 

as profitability and prospects, cash flow, market share, and market 

conditions to determine the optimal time and method of sale. The ultimate 

decision on when and how to sell will be made by the Secretary of the 

Treasury, but auto team staff will be in charge of monitoring these 

Page 23 GAO-10-151 Troubled Asset Relief Program
 

indicators and recommending a strategy to the Secretary and Assistant 

Secretary for Financial Stability. Although Treasury officials said they plan 

to consider all options for selling the government’s ownership stakes in 

Chrysler and GM, they noted that they believe the most likely scenario for 

GM is to dispose of Treasury’s equity in the company through a series of 

public offerings. Treasury has publicly discussed the possibility of selling 

part of its equity in the company through an IPO that would occur 

sometime in 2010. However, by publicly discussing a method and a time 

for a sale of GM shares now, the extent to which Treasury is using the 

indicators to inform method and timing decisions is unclear. Moreover, 

two of the experts we spoke with said GM might not be ready for a 

successful IPO by 2010, because it may be too early for the company to 

have demonstrated sufficient progress to attract investor interest, and two 

other experts noted that 2010 would be the earliest possible time for an 

IPO. For Chrysler, Treasury officials noted that the department is more 

likely to consider a private sale because its equity stake is smaller, and 

several of the experts we interviewed noted that non-IPO options could be 

possible for Chrysler, given the relatively smaller stake Treasury has in the 

company (9.85 percent, versus its 60.8 percent stake in GM) and the 

relative affordability of the company. In commenting on a draft of this 

report, Treasury officials stated that they were aware of the diversity of 

opinions on divesting the government’s interest in the auto companies and 

would make an appropriate determination to maximize the taxpayers’ 

return. To achieve the maximum return for taxpayers, Treasury also said it 

plans not to disclose more information about its strategy to divest its 

ownership interests than is necessary. 

Treasury officials said that on the basis of their analysis of the companies’ 

future profitability, they believe that Chrysler and GM will be able to 

attract sufficient investor interest for Treasury to sell its equity. With 

regard to the possibility that there may not be sufficient investor interest, 

Treasury officials said they would monitor the financial markets and the 

companies’ operations in order to identify any issues that could affect 

profitability, and work with the companies’ boards of directors and 

management to address them. In the event that the companies do not 

return to profitability in the time frame Treasury has projected, Treasury 

officials said that they will consider all commercial options for disposing 

of Treasury’s equity, including liquidation. 

• Manage investments in a commercial manner. Experts emphasized the 

importance of Treasury resisting external pressures to focus on public policy 

goals over focusing on its role as a commercial investor. For example, some 

experts said that Treasury should not let public policy goals such as job 

Page 24 GAO-10-151 Troubled Asset Relief Program
 

retention interfere with its goals of maximizing its return on investment and 

making Chrysler and GM strong and viable companies. They said that this is 

especially important because making the companies financially strong and 

competitive may require reducing the number of employees. Nevertheless, 

one expert suggested that Treasury should consider public policy goals and 

include the value of jobs saved and other economic benefits from its 

investment when calculating its return, since these goals, though not 

important to a private investor, are critical to the economy. 

As long as Treasury maintains ownership interests in Chrysler and GM, it will 

likely be pressured to influence the companies’ business decisions. Treasury 

has said that it plans to manage its investment in Chrysler and GM in a 

commercial way. Yet Treasury faces external pressures, such as to prioritize 

jobs over maximizing its return. For example, Congress is currently considering 

a number of bills to restore automotive dealers’ contracts terminated in 

restructuring, and Treasury officials noted that they receive frequent calls from 

Members of Congress expressing concern about dealership closings. To protect 

Treasury’s investment from these external pressures, a recent Congressional 

Oversight Panel report recommended that Treasury hold its equity interests in 

the auto companies in a trust managed by an independent trustee.28 Treasury 

officials told us they cannot currently establish a trust managed by independent 

trustees because of a requirement in EESA that states that troubled assets are 

subject to the supervision of the Secretary of the Treasury.29 The officials stated 

that if Treasury created a trust with the assets managed by independent 

trustees, the Secretary would not be able to exercise his authority over the 

assets as required by law. Congress is considering legislation that would 

authorize and require the Secretary to transfer to a limited liability company all 

equity in TARP recipients in which the government has a certain equity interest 

as a result of TARP assistance. The bills further provide that the equity is to be 

managed in trust for the benefit of taxpayers.30 Treasury officials told us they 

 

28Congressional Oversight Panel, September Oversight Report: The Use of TARP Funds in 

the Support and Reorganization of the Domestic Automotive Industry (Washington, D.C.: 

Sept. 9, 2009). 

29“In order to provide the Secretary with flexibility to manage troubled assets in a manner 

designed to minimize cost to taxpayers, the Secretary is authorized to establish vehicles, 

subject to supervision by the Secretary, to purchase, hold, and sell troubled assets and 

issue obligations.” Pub. L. No. 110-343, Sec. 101(c)(4), codified at 12 U.S.C. § 5211(c)(4). 

30In order for a trust to be established, the government would have to have at least a 15 

percent ownership in the company as a result of TARP assistance in the House bill and at 

least a 20 percent ownership interest as a result of TARP assistance in the Senate bill. See 

H.R. 3594, 111th Cong. (2009) and S. 1280, 111th Cong. (2009). 

Page 25 GAO-10-151 Troubled Asset Relief Program
 

believe their planned approach for managing Treasury’s equity in Chrysler and 

GM is sufficient for now. 

Regardless of the sales strategies used, the companies will have to grow 

substantially in order to reach values at which Treasury would recover the 

entirety of its equity investment upon sale of its equity, which Treasury 

and others consider to be unlikely. On the basis of our analysis, shown in 

table 5, we estimate that Chrysler and GM would need to have a market 

capitalization of $54.8 billion and $66.9 billion, respectively, for Treasury 

to earn enough on the sale of its equity to break even. 31 A recent 

Congressional Oversight Panel report reached similar conclusions on what 

the companies would have to be worth.32 As a point of reference for these 

values, in 1997, the last year Chrysler was a publicly traded company, its 

market capitalization value ranged between $23.1 billion and $31.7 billion, 

and in 1998, when it merged with Daimler, it was valued at an estimated 

$37 billion. GM, at its peak in 2000, had a market capitalization of $57 

billion.33 In commenting on a draft of this report, Treasury officials noted that 

the companies’ past equity values are not comparable to today’s equity values 

because the companies have substantially restructured their balance sheets 

through bankruptcy. Although we recognize the changes the companies have 

experienced in recent years, we believe this information provides a sense of 

the magnitude of growth that will be required of the companies. 

 

31Our analysis included all funds Treasury has provided to the auto companies that will be 

repaid through a combination of debt and equity. We assume that new Chrysler and new 

GM will repay all debts, and that the debts of old Chrysler and old GM will not be repaid, 

including $5.4 billion to old Chrysler and $986 million to old GM. As a result, Treasury’s 

equity will have to be worth its total investments minus projected repayments of principal 

and preferred stock. This analysis excludes funds provided for the Supplier Support 

Program and the Warranty Commitment Program, since these funds were issued as loans 

and will be paid back as such. In addition, this analysis does not take into account the cost 

or opportunity cost to Treasury of lending, any interest Treasury should or could charge to 

the automakers on the portion of its investment that has been converted into equity, the 

present value of the investment, or the value of any social costs or benefits resulting from 

the investment. If Fiat achieves its operating goals and earns an additional 15 percent 

equity, Treasury’s equity stake will decline to 8 percent, meaning that Chrysler’s total equity 

value would need to reach $57 billion for Treasury to recoup its investment. 

32Congressional Oversight Panel, September Oversight Report: The Use of TARP Funds in 

the Support and Reorganization of the Domestic Automotive Industry. 

33Evercore Group, LLC, the financial services company that estimated GM’s future value for 

the bankruptcy court, concluded that new GM would be worth between $59 billion and $77 

billion in 2012. 

Page 26 GAO-10-151 Troubled Asset Relief Program
 

Treasury’s own analysis suggests that the circumstances necessary for the 

companies to reach market capitalizations high enough for Treasury to fully 

recover its equity investment are unlikely. Treasury officials also noted that 

considering the companies’ enterprise values—a measure of a business’s total 

value, including the value of equity and debt—in addition to equity value is 

important, because enterprise value takes into account the likelihood of 

repayment of loans and other obligations extended to the companies as well 

as the value of equity stakes.34

Table 5: Value of Chrysler and GM Equity Required for Treasury to Recoup Its Investment 

(Dollars in billions) 

Treasury 

investment 

Amount in 

term loans and 

preferred stock

Equity stake 

(percent)

Amount equity stake 

must be worth to 

recoup equity 

investment 

(investment–loans and 

preferred stock) 

Equity value of 

company necessary to 

recoup investment 

(amount equity must be 

worth/60.8 percent for 

GM and 9.85 percent 

Description of funding for Chrysler) 

Total loans to Chrysler $12.5 $7.1 9.85 $5.4a$54.8

Loans to Chrysler prior to 

bankruptcy 

4.0 

Loans to Chrysler after 

bankruptcy 

8.5 

Total loans to GM 49.5 8.8 60.8 40.7 66.9

Loans GM prior to bankruptcy 19.4 

Loans to GM after bankruptcy 30.1 

Source: GAO analysis of Treasury information. 

a

This value does not take into account any repayments Treasury will receive from the payment-in-kind 

interest that will accumulate over the life of the $7.1 billion loan, ($17 million per quarter), the 

additional $288 million note, or the value of Treasury’s interest in Chrysler Financial’s equity (the 

greater of $1.375 billion or 40 percent of the equity). These figures together would be worth $833 

million, thereby reducing the amount Treasury’s equity stake would have to be worth from $5.4 billion 

to $4.6 billion, and reducing the equity value Chrysler would have to attain from $54.8 billion to $46.7 

billion. 

However, these estimates do not take into account other benefits and costs 

that are more difficult to measure, such as the impact of Treasury’s 

investment on jobs and local and national economies and the opportunity 

 

34In June, the Congressional Budget Office (CBO) estimated that the federal government 

would recoup only 27 percent of its initial investment in the auto industry. CBO’s analysis 

relies on data from the auto companies prior to bankruptcy to estimate the likelihood of 

repayment in the future. Chrysler and GM had poor credit ratings and significant debts 

prior to bankruptcy, so the average projected repayment is only 27 cents on the dollar. 

Page 27 GAO-10-151 Troubled Asset Relief Program
 

costs Treasury incurred in providing financial assistance. The impact on the 

economy is difficult to measure because, according to the Council of 

Economic Advisors, it involves predicting what employment and economic 

performance would have been without government investment. Nevertheless, 

a more comprehensive analysis that takes these effects into account would 

yield a richer picture of the value of Treasury’s net investment and net return, 

especially given that the government’s goal upon first providing assistance to 

the auto industry was to prevent economic disruption. 

Treasury’s substantial investment and other assistance, including loans 

from the Canadian government and concessions from the UAW, have 

contributed to the current stability of Chrysler and GM. However, because 

of the challenges continuing to face the auto industry—including the still 

recovering economy and weak demand for new vehicles—the ultimate 

impact that the assistance will have on the companies’ profitability and 

long-term viability is uncertain. Although the immediate crisis of helping 

Chrysler and GM maintain solvency has passed for now and Treasury has 

no plans for further financial assistance to the companies, the significant 

sums of taxpayer dollars that are invested in these companies warrant 

continued oversight. It is critical that Treasury remain focused on 

protecting the government’s interest in the coming months as Chrysler and 

GM work to become profitable. However, most of the original staff on 

Treasury’s auto team either have left Treasury or may do so in the future. 

Treasury officials told us that OFS personnel will continue to provide 

oversight. Given the substantial decline in the number of staff and lack of 

dedicated staff for this oversight moving forward, however, we are 

concerned whether Treasury will continue to have the needed expertise to 

provide oversight of the use of government funds, assess the financial 

condition of the auto companies, and develop strategies to divest the 

government’s interests. Monitoring industry conditions and determining 

when to divest will require a certain expertise, including a robust 

monitoring function through which detailed financial data from Chrysler 

and GM are reviewed on a regular basis. Transparency as to how the 

companies are being monitored also will be important to ensuring 

accountability and providing assurances that the taxpayers’ investment—

including both the loans to and equity in the companies—is being 

appropriately safeguarded. While we recognize that not all information 

that the companies report to Treasury should be made public because of 

concerns about disclosing proprietary information in a competitive 

market, Treasury’s approach for evaluating the success of the AIFP should 

be as transparent as possible, given the large taxpayer investment. 

Conclusions 

Page 28 GAO-10-151 Troubled Asset Relief Program
 

While Treasury has stated that it plans to review all possible options for 

divesting itself of its ownership interest in Chrysler and GM, Treasury 

officials have focused primarily on an IPO for GM, both in our discussions 

with them and in their public statements. However, given the complexity 

of the economy and the financial markets, considering all of the options in 

the context of the companies’ financial progress and current financial 

conditions will be important for Treasury. The past year has indicated the 

extent to which a company’s financial situation can change within a period 

as short as a few months. Given the fluidity of conditions and the number 

of factors that will need to be considered when determining how and 

when to divest, it is important that Treasury identify the criteria it will use 

to evaluate the optimal method and timing for selling the government’s 

ownership stake. Determining when and how to divest the government’s 

ownership stake will be one of the most important decisions Treasury will 

have to make regarding the federal assistance provided to the domestic 

automakers, as this decision will affect the overall return on investment 

that taxpayers will realize from aiding these companies. Currently, the 

value of the companies would have to grow tremendously for Treasury to 

approach breaking even on its investment, requiring that Treasury temper 

any desire to exit as quickly as possible with the need to maintain its 

ownership interest long enough for the companies to demonstrate 

sufficient financial progress. Therefore, it is important that Treasury be 

able to explain why and how it decided to divest when the time arrives, 

and clearly established criteria will help Treasury communicate this 

decision to Congress and the public at the appropriate time to prevent this 

disclosure from negatively affecting the full recovery for taxpayers. 

To improve the stewardship of the federal government’s substantial 

financial investment in the auto industry, we recommend that the 

Secretary of the Treasury take the following three actions: 

Recommendations for 

Executive Action 

• Ensure that the department has the expertise needed to adequately 

monitor and divest the government’s investment in Chrysler and GM, and 

obtain needed expertise in areas where gaps are identified. In addressing 

any existing or future expertise gaps, Treasury should consider both inhouse and external expertise. 

• Report to Congress on how it plans to assess and monitor the companies’ 

performance to help ensure the companies are on track to repay their 

loans and to return to profitability. In reporting to Congress, Treasury 

should balance the need for transparency with the need to protect certain 

proprietary information that would put the companies at a competitive 

Page 29 GAO-10-151 Troubled Asset Relief Program
 

disadvantage or negatively affect Treasury’s ability to recover the 

taxpayers’ investments. 

• Develop criteria for evaluating the optimal method and timing for 

divesting the government’s ownership stake in Chrysler and GM. In 

applying these criteria, Treasury should evaluate the full range of available 

options, such as IPOs or private sales. 

We provided a draft of this report to the Department of the Treasury for 

review and comment. Treasury generally agreed with the report’s findings, 

conclusions, and recommendations, and provided written comments, 

which are reprinted in appendix II. Treasury also provided technical 

comments and clarifications via e-mail, which we incorporated as 

appropriate. In their technical comments, Treasury officials emphasized 

that they believe they have individuals within OFS who can provide the 

needed oversight of the government’s investments in Chrysler and GM. 

We added Treasury’s views on its current staffing and expertise levels to 

the final report. While we recognize that OFS employs a number of 

qualified individuals who have worked on the government’s efforts to 

stabilize the auto industry, we nevertheless remain concerned about the 

loss of industry- and company-specific knowledge and expertise that 

Treasury has experienced and will continue to experience with the winddown of the auto team. Such knowledge and expertise will be critical as 

Treasury monitors the financial health of Chrysler and GM and develops 

plans to divest its ownership interests in these companies. We are pleased 

that Treasury—in both its written and technical comments—commits to 

continue to take steps to assess and maintain the expertise required to 

monitor and manage Treasury’s investments in these companies. 

Agency Comments 

and Our Evaluation 

In their written and technical comments, Treasury officials also stressed 

the need to strike a balance between the goal of transparency and the need 

to avoid compromising the competitive positions of Chrysler and GM or 

the government’s ability to recover its investments. We recognize the need 

to strike this balance and added language to the final report, including one 

of our recommendations, to acknowledge this difficult trade-off. We 

believe our revised recommendation that Treasury report to Congress on 

its plans to monitor the performance of the companies provides Treasury 

with sufficient flexibility to strike the appropriate balance. 

We also provided relevant portions of a draft of this report to SEC, 

Chrysler, and GM for their review and comment. SEC, Chrysler, and GM 

Page 30 GAO-10-151 Troubled Asset Relief Program
 

provided technical comments and clarifications that we incorporated as 

appropriate. 

We are sending copies of this report to other interested congressional 

committees and members, the Department of the Treasury, and others. 

The report also is available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

Katherine Siggerud at (202) 512-2834 or siggerudk@gao.gov or A. Nicole 

Clowers at (202) 512-2843 or clowersa@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

Gene L. Dodaro 

report are listed in appendix III. 

Acting Comptroller General 

 of the United States 

Page 31 GAO-10-151 Troubled Asset Relief Program
 

List of Committees 

The Honorable Daniel K. Inouye 

Chairman 

The Honorable Thad Cochran 

Vice Chairman 

Committee on Appropriations 

United States Senate 

The Honorable Christopher J. Dodd 

Chairman 

The Honorable Richard C. Shelby 

Ranking Member 

Committee on Banking, Housing, 

 and Urban Affairs 

United States Senate 

The Honorable Kent Conrad 

Chairman 

The Honorable Judd Gregg 

Ranking Member 

Committee on the Budget 

United States Senate 

The Honorable Max Baucus 

Chairman 

The Honorable Charles E. Grassley 

Ranking Member 

Committee on Finance 

United States Senate 

The Honorable David R. Obey 

Chairman 

The Honorable Jerry Lewis 

Ranking Member 

Committee on Appropriations 

House of Representatives 

Page 32 GAO-10-151 Troubled Asset Relief Program
 

The Honorable John M. Spratt, Jr. 

Chairman 

The Honorable Paul Ryan 

Ranking Member 

Committee on the Budget 

House of Representatives 

The Honorable Barney Frank 

Chairman 

The Honorable Spencer Bachus 

Ranking Member 

Committee on Financial Services 

House of Representatives 

The Honorable Charles B. Rangel 

Chairman 

The Honorable Dave Camp 

Ranking Member 

Committee on Ways and Means 

House of Representatives 

Page 33 GAO-10-151 Troubled Asset Relief Program
Appendix I: Financial and Industry Experts Appendix I: Financial and Industry Experts GAO Interviewed 

GAO Interviewed 

Name Affiliation 

John Casesa Casesa Shapiro Group 

Justin Mirro Moelis & Company 

Thomas Maloney Deutsche Bank 

Warren Estey Deutsche Bank 

Rod Lache Deutsche Bank 

Henry Miller Miller Buckfire 

Durc Savini Miller Buckfire 

Eric Selle J.P.Morgan 

Himanshu Patel J.P.Morgan 

Charles Bowsher Former Comptroller General of the United States 

William Isaac Former Chairman of the Federal Deposit Insurance 

Corporation 

Source: GAO. 

Page 34 GAO-10-151 Troubled Asset Relief Program 
Appendix II: Comments from the Department Appendix II: Comments from the Department of the Treasury 

of the Treasury 

Page 35 GAO-10-151 Troubled Asset Relief Program
Appendix III: GAO Contacts and Appendix III: GAO Contacts and Staff Staff Acknowledgments 

Acknowledgments 

Troubled Asset Relief Program

Katherine A. Siggerud, (202) 512-2834 or siggerudk@gao.gov GAO Contacts 

A. Nicole Clowers, (202) 512-2834 or clowersa@gao.gov

In addition to the contacts named above, Raymond Sendejas, Assistant 

Director; Orice Williams Brown; Sarah Farkas; Timothy Guinane; Heather 

Halliwell; Terence Lam; Matthew McDonald; Susan Michal-Smith; Joshua 

Ormond; and Susan Sawtelle made important contributions to this report. 

Staff 

Acknowledgments 

. 

Page 36 GAO-10-151 (544156) 
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