During last year’s presidential election, I wasn’t really interested in who would win. Both of the major candidates simply didn’t offer me many opinions that I agreed with. But despite my apathy, I have to admit that I felt a little secure when Barack Obama won the election. Sure I disagreed with him on almost everything, but he at least seemed to be an honest candidate concerned for the average American’s plight.

Though I went into it hoping for the best, Obama’s presidency thus far has made me trust government even less — and my trust wasn’t very high to begin with. What killed the small amount of trust I had was something his administration did within the first couple months of his presidency. It supposedly used blackmail to ensure its success in negotiations with Chrysler’s lenders, reminding me that government is something to fear, not to trust.

It has been alleged that the Obama administration used threats to protect the interests of the automaker Chrysler LLC, which — along with General Motors — is now government-supported. With the horrible state of their finances, the Obama administration made it clear that many of those associated with the companies — stockholders, employees, lenders, etc. — would have to make sacrifices. But when the outcome of negotiations between Chrysler and its lenders wasn’t looking good for Chrysler, the administration supposedly blackmailed a lender, Perella Weinberg Partners, to give in to Chysler’s offer. According to Perella Weinberg’s lawyer Tom Lauria, who spoke on the Frank Beckmann Radio Show, the White House told Perella Weinberg to agree to the offer or “the full force of the White House press corps would destroy its reputation.”

The different parties supposedly involved in this blackmail all refute Lauria’s claim. The Obama administration denies it outright. Strangely enough, Perella Weinberg Partners also denies the claim. But Lauria hasn’t backed down from his statement despite all the claims to the contrary. If the Obama administration is indeed the guilty party, it has threatened a private firm in a very scary manner. But it also wouldn’t have been the first administration to do so. In fact, the Bush administration used blackmail and admitted to it.

In December, Bank of America’s chief financial officer told chief executive officer Kenneth Lewis that Merrill Lynch, the firm the bank was going to purchase on Jan. 1, had suffered severe and not-yet-disclosed losses. Lewis became wary of the purchase, but Bush’s Treasury Secretary Henry Paulson was so concerned that canceling the purchase would further escalate the financial crisis that he blackmailed Lewis into completing it. Should Bank of America have backed out of the purchase, Paulson told Lewis, his job and those of his company’s board would have been at risk. At the same time, he told Lewis not to tell stockholders of the loss, an order that went against federal law. Both Lewis and Paulson corroborated this story to New York Attorney General Andrew Cuomo, who urged federal authorities to investigate the pressure Paulson put on Lewis and his board to commit this possibly-illegal action. Authorities have not yet acted on Cuomo’s recommendation.

Paulson was, of course, interested in protecting the financial markets by blackmailing Lewis and Bank of America’s board. But what’s scary to me is that this blackmail encouraged Lewis to break federal laws that the government is responsible for enforcing. The Obama administration’s blackmail of Perella Weinberg, if it happened, is the same situation — an administration ceasing to defend a business contract between Chrylser and Perella Weinberg that it has the responsibility to protect.

What the government is doing in these situations is acting like a private company — albeit one that doesn’t even have to follow its own regulations. It is acting in the interest of the corporations it supports (Bank of America and Chrysler) and threatening those who get in the way of their expansion. Usually those who have business contracts with corporations, such as their lenders and stockholders, have governmental agencies that protect them from any breach of contract the corporation may attempt. But when the governmental agencies assigned to protect these stockholders and lenders have instead turned against them, as in these two cases, government becomes worse than any malicious corporation — it becomes an unpoliced oppressor free to bring about whatever havoc it wants. If the government ceases to enforce its own laws and becomes the source of the harm itself, what is the purpose of government?

Patrick Zabawa can be reached at pzabawa@umich.edu.

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