The GM scandal: Were the feds duped or complicit?

There are still plenty of unanswered questions about who knew what about the faulty switches and when; right now the best-case scenario for the Obama team is that GM’s management played the administration and the taxpayers for suckers. The worst-case scenario is that the government, which was literally invested in the success of GM, didn’t look too hard or at all at problems within the company.

Shortly after taking office, President Obama established an Auto Industry Task Force to review the crisis America’s automakers were facing and set up a response plan. Steve Rattner, a founder of Quadrangle Group, a private-equity firm, was chosen to head the task force although he had little or no experience in the auto industry. Usually a ubiquitous television talking head on economics issues, Rattner has declined comment in response to media inquiries since the GM recall scandal broke.

An unnamed source told Bloomberg BusinessWeek that GM didn’t tell the task force anything about the defective switches. It’s an unsurprising excuse, but not quite as exculpatory as that unnamed source may think. The task force’s job was to get an accurate portrait of GM’s assets, liabilities, and problems, and the source said GM’s board and the task force did discuss product-liability claims. The Obama administration bragged about the thoroughness of its review. At this point, it is unclear whether the task force spoke with anyone in the engineering department. It appears that at the precise moment the president’s task force was supposedly confronting GM about a dysfunctional corporate culture that had brought the company to the brink of ruin, it accepted everything GM’s leaders told it at face value.

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