By KEN de la BASTIDE
Chrysler declined to comment on a complaint filed by Indiana Secretary of State Todd Rokita alleging securities fraud.
Rokita’s office filed the complaint against Chrysler on Thursday over the issuance of bonds by Tipton County for the now-defunct Getrag Transmission plant.
The allegation contends Chrysler allowed Tipton County to sell $14.1 million in bonds in September for infrastructure improvements at the joint venture with Getrag Transmission LLC, and the next day disclosed it could not make guarantees to the German company to secure funding to complete the project.
Chrysler has until April 30 to respond to the complaint and a hearing has been set for June 24.
When asked to comment, Chrysler said in a statement that, because the matter is in litigation, it would make no further comment.
“They kept pushing to get the bonds ready,” said Tipton Mayor Dan Delph told The Associated Press. “We issued the bonds one day, and the very next day Chrysler called it off. A big corporation knowingly did that. That’s why Rokita is checking that out for fraud.”
Delph said Tipton County officials have asked for reimbursement from the companies for the infrastructure loans but have received no money.
“We are very thankful that Secretary of State Rokita is standing up for the people of Tipton,” said Commissioner Mike Kline. “Chrysler has been a significant contributor to the Indiana economy for many years. However, no number of jobs or dollars of investment should excuse Chrysler from the laws of the State of Indiana that prohibit fraud.”
Commissioner Jane Harper said the effort is another step toward recouping the millions of dollars Chrysler owes to Tipton County taxpayers.
“We have asked Chrysler to return $5.5 million in bonds and to reimburse the county for $4.5 million in third-party costs,” said Ken Ziegler, president of the Board of Commissioners. “We have also stepped up our pleas to members of Congress, asking them not to approve additional bailout money for Chrysler until Chrysler honors the commitments it made to our community.”
Congressman Dan Burton, R-5th District, said the filing of the complaint won’t help in Chrysler’s request for additional loans from the federal government to avoid filing bankruptcy.
“This shows the executives at Chrysler that the Tipton County situation should be part of any rescue plan when and if it receives additional loans,” he said. “Chrysler has an obligation to the people of Tipton County.”
Burton complimented Rokita for studying the issue and taking the right course of action.
He said Tim Geitner, Secretary for the U.S. Treasury Department, is closely watching everything that Chrysler and General Motors do in terms of developing a plan to become profitable and receive another federal loan.
“I believe everything is part of the mix and the Automotive Board has been notified of the situation by Secretary Geitner,” Burton said. “Part of the plan should be making good on the commitment to Tipton County.”
Burton said county officials went out on a limb and did what was right for economic development in Tipton County and the region.
Chrysler has agreed to relinquish the $5.5 million in bonds it received from Tipton County, Burton said, but the company still needs to reach an agreement to pay back the remaining $4.5 million.
Chrysler issued an identical statement to the Kokomo Tribune on Wednesday concerning the unresolved issues with Tipton County.
The company had agreed in March to relinquish $5.5 million in bonds issued by Tipton County as a settlement for all claims.
County officials contend Chrysler agreed to pay all third-party claims if the joint venture with Getrag was not completed. Tipton County wants Chrysler to reimburse it for $4.2 million in bonds sold to Harris Bank and $300,000 in Economic Development Income Tax funds used for infrastructure improvements.
Chrysler reiterated a statement it issued on Wednesday when asked by the Kokomo Tribune if there were new talks scheduled with county officials.
“Chrysler previously paid for about $14.5 million in infrastructure improvements around the Getrag Transmission Manufacturing project in Tipton, and received bonds in the amount of $5.5 million issued by Tipton County as a way of financing infrastructure improvements,” the company statement said. “Chrysler has offered to transfer $5.5 million in bonds to Tipton County at no cost as part of Chrysler’s good faith efforts to minimize the impact on Tipton County of the commercial dispute with Getrag triggered by Getrag’s failure to arrange required financing for the project. This will help Tipton County find other uses for the property in a way that benefits the community.”
Ken de la Bastide can be reached at (765) 454 -8580 or via e-mail at ken.delabastide@kokomotribune.com
