If there’s one man in America who can credibly destroy Mitt Romney’s last-minute transmutation on the auto bailout, it’s Harry Wilson. In fact, the 2010 Republican candidate for New York state comptroller already has—but nobody noticed.
In addition to being one of New York’s top Republicans, Wilson was senior adviser to President Obama’s Task Force on the Auto Industry. An expert witness in a recent unrelated bankruptcy case, Wilson said that his “specific role” on Obama’s task force was “to lead the restructuring of General Motors, which remains the largest successful industrial restructuring ever completed.” Wilson is not only backing Romney for president, he is the finance chair for Republican Matt Doheny in one of the state’s hottest congressional races. Wilson was recruited to run for the US Senate this year by party leaders and is poised to run for comptroller again in 2014.
Wilson appeared on October 23 on Bloomberg News’s In the Loop and was asked by host Betty Liu about Romney’s claims in the last debate that he’d supported a form of federal assistance to GM and Chrysler, namely “post bankruptcy” government guarantees to private lenders. Liu tried to soften the case against Romney in her question to Wilson, asserting that both Romney and Obama “were essentially right” in their bailout comments, but Wilson would have none of it.
“I’m, as you know, a Republican who supports the governor. But I think on this issue, I think he’s really mishandled it,” said Wilson.
A startled Liu: “Romney has mishandled it?”
“Yes,” continued Wilson. “He came out both in 2008 and earlier in 2012, in a piece in one of the Detroit newspapers, and said he wouldn’t have supported any government capital because private capital was available. That’s simply not true. The president said that last night.”
Liu interjected that the unavailability of private money was backed up by a Congressional Budget Office report.
“Absolutely,” added Wilson. “We tried everything we could to find private money. I personally would have dramatically preferred private money. It just wasn’t available because of the crisis we were in. And the greatest thing about this point is that it is the easiest thing in the world to prove or disprove. All you need is one person to come forward and say, ‘Oh, I would have provided private capital, and here’s an example of where I said that in 2009.’ And no one has said that in three years, cause it’s just not true.”
A hedge fund millionaire with a Harvard MBA just like Romney, the 41-year-old Wilson once worked at Goldman and Blackstone, is on the board of directors of Yahoo and Michigan-based auto supplier Visteon, and heads his own turnaround firm called The MAEVA Group. A media recluse even when he was a candidate in 2010, Wilson’s candor on television was unprecedented.
Wilson was the hero of auto czar Steve Rattner’s book Overhaul, which recounts that Wilson realized that the $50 billion the task force was contemplating giving GM “would leave the company groaning under a potentially unmanageable load of fixed liabilities.” Then it suddenly occurred to Wilson to “infuse the bulk of our money into GM by buying stock” rather than lending it. “Harry bounded into my office one morning, waving a sheaf of papers,” Rattner wrote, declaring “we’ve been thinking about this the wrong way” and recommending that they instead “equitize most of our debt.”
Wilson was “passionate,” said Rattner, in pitching this to a “recoiling” Larry Summers, one of Obama’s chief economic advisers, whom Wilson eventually persuaded. Wilson ultimately became the government’s only witness in the brief GM bankruptcy proceeding. When he ruled in favor of the government, the judge in that case said, “The Court fully takes Harry Wilson at his word.” Rattner said Wilson was seen by others on the fourteen-member task force as moving from being its “fiercest laissez-faire capitalist” to “an outright government interventionist.” Rattner said he hired Wilson after reading his unsolicited, over-the-transom, résumé, intrigued by his Republican and Wall Street background as well as his stated desire “to serve my country in the near time.”
Romney has recently been trying to muddle the bailout question, especially as it becomes clear that it could cost him Ohio, and thus the election. His campaign just went up with an outrageous television ad that even tries to suggest that Obama was the auto culprit, alleging that he forced GM and Chrysler into a damaging bankruptcy and somehow caused both an Italian takeover of Chrysler and a supposed, and utterly untrue, shifting of Jeep jobs to China.
Senator Rob Portman, Romney’s shadow in Ohio, introduced him at a Defiance, Ohio, rally last Thursday with a long treatise on Romney’s true position on the bailout, which Team Romney now contends did include support of a federally guaranteed private bailout. Even though Romney used the term “post-bankruptcy” to describe the guarantees he might have backed in his infamous New York Times op-ed, the Romney Team is contorting that into a federally aided private sector rescue equivalent of the Obama bailout in hopes of forcing news organizations to present this as just one more two-sided argument and obscuring the core facts.
The Detroit News endorsed Romney recently—an endorsement cited in Romney’s ad—but still branded his bailout philosophy “wrongheadedness,” and made the same point Wilson did: “Romney suggested government-backed loans to keep the companies afloat post bankruptcy. What GM and Chrysler needed were bridge loans to get them through the process, and the private markets were unwilling to provide them.” The Romney ad, of course, omits this condemnation.
Alan Mulally, the Ford CEO who testified on behalf of the bailout of his competitors in 2008 while not seeking any taxpayer money himself, says now that “nobody was going to lend” GM and Chrysler any money, even in a debtor-in-possession bankruptcy. If the two companies had gone “into freefall,” Mulally contended, “they could have taken the entire supply base into free fall also,” precisely the Ohio auto job base. Mulally says that “could’ve taken the United States from a recession to a depression.