Fox & Friends co-hosts Steve Doocy, Brian Kilmeade, and Gretchen Carlson repeatedly discussed allegations that the Obama administration threatened Perella Weinberg, a hedge fund invested in Chrysler, without noting that Perella Weinberg itself has denied the allegation.
During the May 5 edition of Fox News' Fox & Friends, co-hosts Steve Doocy, Brian Kilmeade, and Gretchen Carlson repeatedly discussed allegations that the Obama administration threatened Perella Weinberg Partners, a hedge fund invested in Chrysler, without noting that Perella Weinberg itself has denied the allegation. Indeed, after initially ignoring Perella Weinberg's statement, Doocy himself noted during the previous day's Fox & Friends, "The White House says that didn't happen. This hedge fund says it didn't happen."
Interviewing Rep. Bill Shuster (R-PA) on May 5 about Chrysler's bankruptcy proceedings, Carlson asserted, "I understand now -- we've been reporting for the last several days -- that there may have been threats against some of these investors who didn't want to just go along with the Obama plan." She subsequently asked, "Congressman, as somebody who was in the car business before, owning a Chrysler dealership, will you call for an investigation into what's being alleged here?" But in asking Shuster whether he would investigate the allegations, Carlson did not point out, as Doocy did the day before, that Perella Weinberg has denied the allegation that it was pressured.
Also discussing the allegation without noting Perella Weinberg's statement during the May 5 Fox & Friends:
- After Fox Business contributor Charles Payne joined Kilmeade in claiming that hedge funds were "threatened," Carlson responded, "Yeah. They were."
- Kilmeade later claimed that "the hedge funds decided, I don't like this deal, I could do better in bankruptcy. And they were threatened, they were vilified, their names were listed, and a couple of them ended up caving." Fox News' Glenn Beck responded, "Yeah, it's Brownshirt stuff. I mean, this is -- this is the kind of stuff that, you know, happened in the 1930s early on in Germany where the businessmen originally got into bed, and then they said, 'Whoa, whoa, whoa, this nationalization thing is really scary. We don't want this.' And it was too late to get out." In response, Kilmeade said, "They do deny that, though -- the administration," and Doocy said, "They do deny it." However, Doocy did not make clear that Perella Weinberg also denied the allegation.
- After later airing an audio clip of Thomas E. Lauria, a partner at the White & Case law firm, making the allegation that Perella Weinberg was pressured, Doocy stated that the administration was "bullying them to take the deal, although the White House says that that didn't really happen. This is extraordinary." Fox News contributor Laura Ingraham responded, "Yeah, well, move over, Tony Soprano. I mean, this is bare-knuckle tactics at the very least."
As Media Matters for America documented, Perella Weinberg issued a statement disputing the claim that it acquiesced to White House pressure, which Doocy acknowledged during the May 4 Fox & Friends.
From the May 5 edition of Fox News' Fox & Friends:
KILMEADE: Let me ask you this, Charles: What's the dynamic? Ten of the 19 banks evidently are going to be told, go get more capital. Not, get it from the government; go get it yourselves. What if the banks say, I don't really think we need more capital?
PAYNE: Well, they're not going to say that. Listen, last week --
KILMEADE: Why wouldn't they say that? It's their bank.
PAYNE: Well, look, a prime example last week with this whole thing with Chrysler.
PAYNE: The TARP banks tucked their tail between their legs and did whatever the government wanted them to do. It was the non-TARP banks that stood up for their investors and said, you know what? This is a lousy deal.
PAYNE: And they were --
CARLSON: The 20 hedge funds.
PAYNE: They were demonized for it.
KILMEADE: And threatened.
PAYNE: And threatened.
CARLSON: Yeah. They were.
PAYNE: And the TARP banks didn't raise a voice. They are trained puppies, they are trained collies, in part because they want to get out of this.
KILMEADE: When you talk about what went on with the Chrysler deal, this is really what you've been talking about in a way, in that the 10 percent of the financiers, these, these --
DOOCY: Hedge funds.
KILMEADE: -- the hedge funds decided, I don't like this deal, I could do better in bankruptcy. And they were threatened, they were vilified, their names were listed, and a couple of them ended up caving.
BECK: Yeah, it's Brownshirt stuff. I mean, this is -- this is the kind of stuff that, you know, happened in the 1930s early on in Germany where the businessmen originally got into bed, and then they said, "Whoa, whoa, whoa, this nationalization thing is really scary. We don't want this." And it was too late to get out.
I hope that we don't go that far, but they are, I mean, they're using the bully pulpit, and you don't even have to go --
KILMEADE: They do deny that, though -- the administration.
DOOCY: They do deny it, although --
BECK: Let me just say this. I've had people in the room -- I've had friends in the room while people were threatened. I mean, this is -- this stuff is happening. They can deny it all they want. Deny it under oath.
KILMEADE: It was a big press conference last week. Barack Obama came out and praised Chrysler and Fiat and the proposed merger, and said, by the way, they are going into bankruptcy, and I'll tell you exactly who's to blame -- those freelancers. It's those hedge funds --
DOOCY: Those hedge funds.
KILMEADE: -- those speculators. And they went out and basically said they wouldn't go along with the plan, and therefore forcing Chrysler, this great company, into bankruptcy. Here's what happened behind the scenes, according to a lawyer of one of those hedge funds. Let's listen.
LAURIA [audio clip]: One of my clients was directly threatened by the White House and, in essence, compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.
DOOCY: OK. So, Laura, there you have Thomas Lauria, who had been an attorney for the Perella Weinberg Partners, one of these little boutique hedge funds. He says that Steven Rattner and -- the car czar -- was -- were bullying them to take the deal, although the White House says that that didn't really happen. This is extraordinary.
INGRAHAM: Yeah, well, move over, Tony Soprano. I mean, this is bare-knuckle tactics at the very least. What was interesting about this, you guys, is that Bill Burton, the deputy White House press secretary, said, well, you know, we disavow what he's saying about what happened, and there is no evidence of that, in other words, of that type of strong-arming.
I just think it's odd when someone says there's no evidence, meaning there's no probably written evidence, but these were conversations that were had. And for President Obama to intimate that somehow these bondholders, these firms representing these people who lent money, were investing in Chrysler, were somehow flouting the law. I mean, they were -- they actually had a contract --
INGRAHAM: -- to be paid back. And now the administration is saying, oh, they wouldn't sacrifice. They were going to take a 50 percent --
KILMEADE: Right. They want to try --
INGRAHAM: -- haircut on the money they were going to get.
KILMEADE: They want to try their hand in bankruptcy court. That's in the best interest of their investors.
KILMEADE: It seems logical.
CARLSON: Yeah, but I think --
INGRAHAM: Yeah, but --
CARLSON: -- more importantly here is the strong-arming aspect. And if -- as we hear stories about this with the car industry and with the banks --
CARLSON: -- you know, that's very concerning.
INGRAHAM: Well, it's very concerning, because if you can't expect the president of the United States to believe that contracts should be honored --
INGRAHAM: -- these types of contracts signed in good faith -
INGRAHAM: -- then what happens to the whole free market system if contracts are now going to be voided like this with -- and then the president is going to point his fingers at the firms that actually want the contracts honored?
DOOCY: Oh, I know.
INGRAHAM: That's ridiculous.
CARLSON: Could the Chrysler restructuring plans set a dangerous precedent that could ultimately affect you? Pennsylvania Congressman Bill Shuster used to own a Chrysler car dealership before getting into politics, and he is my guest this morning. Good morning to you, Congressman.
SHUSTER: Good morning.
CARLSON: All right, so I gather that you were against all of these bailouts if the end result was going to be bankruptcy for the car industry anyway?
SHUSTER: Yes. I felt back in the fall of last year that the best course of action for these auto manufacturers were to go into bankruptcy. It gives them a fighting chance. They are able to shed some of the contracts and some of the other things that they needed to get rid of to make them be able to compete in the world.
It's tough medicine, and my heart goes out to the workers and the auto dealers who are in these tough times, but if we aren't able to do this, I believe it is only going to be worse in the future for the auto industry in America. So this is a way for us to clean up their balance sheets and make sure that they can be competitive in the world.
CARLSON: Except for this bankruptcy now, being called a surgical bankruptcy, where the government has a heavy hand in the situation. And I understand now -- we've been reporting for the last several days -- that there may have been threats against some of these investors who didn't want to just go along with the Obama plan. Does that trouble you?
SHUSTER: That's very troubling, and I think we ought to be taking -- Congress ought to be taking a close look at what threats were made and by who in the administration. As a member of Congress, it's illegal, it's unethical for me to pressure a private company to do business with a private company, and that's what we have the administration doing. So it's wrong to do that. But I -- so I think we need to take a close look.
And what happened in this matter was you have these bondholders, these lenders, who are part of the solution, loaning money to these companies. They're going to take a hard look at it, and any business in the future, as to what they're going to loan and what bonds they're going to buy, whereas where you have the UAW that is part of the problem. Some of these contracts are just stifling the auto industry, and they're going to benefit from this pressure the administration put on them while the bondholders are going to be penalized.
CARLSON: Yeah, it's interesting, because when that news came out last week, there was talk that the union had made some concessions. But the finger-pointing went towards the other people in the whole deal, the creditors, right?
SHUSTER: Well, absolutely. And, as I stated, the bondholders are people that invest in companies, so they want them to succeed. And when something goes wrong, they want to try to be made as whole as possible. But yet you have part of the problem, the UAW contracts and their unwillingness to reduce their benefits and wages, and they get to benefit, or they get a better deal, really, from this bankruptcy than the bondholders.
CARLSON: Congressman, as somebody who was in the car business before, owning a Chrysler dealership, will you call for an investigation into what's being alleged here?
SHUSTER: Well, I want to make sure that Congress is taking a close look at it. I want to see all the facts. But, yes, I would be willing if I think that the administration stepped over the line. And I believe at this point, from what I've heard and what I've seen, that they have in pressuring one private entity to take a deal with another private entity. And again, here in Congress, that's unethical, that's illegal.
CARLSON: All right, Congressman Bill Shuster, Republican from Pennsylvania, former Chrysler dealership owner. Thanks for sharing your thoughts this morning.