Posted by Jonathan Adler:
The Chrysler Conspiracy:
http://volokh.com/archives/archive_2009_05_24-2009_05_30.shtml#1243603092
There's a lot of [1]buzz on the net about how specific Chrysler
dealerships were selected for closure as part of the auto company's
restructuring. On the surface, it appears the shuttered dealerships
are disproportionately owned by donors to Republican candidates while
hardly any dealerships owned by Democratic donors were placed on the
closure list. Even those quite skeptical of the story, such as
[2]Megan McArdle, think the pattern "doesn't look good."
Is it possible the Obama Administration is using the Chrysler
restructuring for political gain? Of course it's possible; give
politicians of either party the ability to reward friends and punish
enemies and they'll often take advantage. It's not just the "Chicago
Way," it's the way of politics. But in this case, it seems like
there's much more smoke than fire.
Sean Parnell of the Center for Competitive Politics, who is well aware
that public disclosure of campaign contributions can bring political
repercussions, [3]thinks the charges in this case "are almost
certainly not true." He writes:
While things may have changed somewhat since the days I was raising
money for a Republican member of Congress, auto dealers are almost
overwhelmingly Republican. Pretty much by definition, if you're
going to be closing down auto dealerships, you're going to be
closing down an awful lot of Republican-owned auto dealerships. A
quick look at the giving by the [4]National Auto Dealers
Association PAC consistently shows contributions going to
Republican candidates by about a 2 to 1 margin, and nearly 3 to 1
in one recent cycle.
More telling, however, is the fate of minority-owned auto dealers
under the closings. If the Obama administration were targeting
political opponents for closure, it would seem likely that
political allies, or at least those the Obama administration
presumably favors, would have a lower closure rate than others.
It's speculation on my part, but I'm going to go out on a limb here
and say that minority-owned dealerships would come out
better-than-expected if the Obama administration were using auto
dealership closures as a tool of political revenge.
So what do the numbers show? From an article in the [5]Seattle
Medium:
Of the 789 Chrysler dealers who were notified that their contracts
will not be renewed, 38 are minority owned...
At the end of April, there were 154 minority dealers in Chrysler's
3,181 total U.S. dealer body network . . .
According to my trusty calculator, before closings 4.84% of
Chrysler's dealers were minority owned. What percentage of auto
dealers receiving closure notices are minority owned? 4.82%
At this point, the case for Obama's use of campaign disclosure
reports to compile an "enemies list" for use in the closure of auto
dealerships pretty much falls apart, unless someone wants to really
make a big deal of the two one-hundredths of a percent where
minority-owned dealerships come out ahead.
I would also echo McArdle's sentiment that if there were any political
funny-business in the Chrysler closings (and that's a big "if" at this
point), it's far more likely that someone in the Administration
intervened to protect an important Democratic contributor here or
there than that the entire process was used to slam Republican dealers
across-the-board. In any event, it seems to me there is far less to
this story than meets the eye.
References
1. http://pajamasmedia.com/instapundit/79205/
2.
http://business.theatlantic.com/2009/05/closing_chryslers_dealers_cui_bono.php
3.
http://www.campaignfreedom.org/blog/detail/obama-almost-certainly-not-using-enemies-list-to-close-republican-auto-dealers
4.
file://localhost/var/www/powerblogs/volokh/posts/National%20Auto%20Dealers%20Association%20PAC
5.
http://www.seattlemedium.com/news/Article/Article.asp?NewsID=96770&sID=3&ItemSource=L
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