Bailouts: Industries line up to get congressional money

Investigative Reporters and Editors, Inc. The IRE Journal, Jan/Feb 2002 by Keefe, Bob

I also learned from clips how past government interventions in corporate affairs had turned into boondoggles. The government did OK in the Chrysler bailout, history showed. But the Conrail fiasco cost it - and taxpayers - at least $5 billion. Depending on who you talk to, it could take until 2019 for taxpayers to finish paying the hundreds of billions it cost to bail out the S&L industry - although that action, aimed at insuring consumers' funds as much as anything else, was under much different circumstances than today's business bailouts.

Temporary help I wanted to talk to some of the beneficiaries of past bailouts, but - probably in part given the rising controversy over corporate aid - I didn't have much luck. I tried several former Chrysler executives. I tracked former Chrysler chief Lee Iacocca to Las Vegas, where he was attending a trade show. But he never returned my calls. Likewise with former Chrysler righthand man Robert "Steve" Miller, now chief executive at Bethlehem Steel Corp. Miller apparently was busy with other problems; I later learned he put Bethlehem into Chapter 11 bankruptcy court protection a few days after I tried to talk to him about Chrysler.

Striking out with direct beneficiaries, I next tried to talk others who had benefited to try and give some perspective as to whether they were worth it. I knew that the city of Marietta, Ga., was a Lockheed town, so I tried tracking down the mayor. Using the Internet, I also found City Councilwoman Jo Anne Darcy in Santa Clarita, Calif., another Lockheed town.

Darcy ran the chamber of commerce there back when the government agreed to guarantee $250 million in Lockheed loans to keep the company afloat. She told me that government intervention did make a difference in her central California town - temporarily. Lockheed planned to cut 40 percent of its local workers there if it didn't get the government help, she said. But ultimately, not even governmentbacked loans could keep the airplane maker from shutting down the local factory a few years ago.

In the end, the piece gave some insight into the news of the day - that the airline industry certainly isn't the only business hurting and looking for help - and some indication of what Congress' actions hold in the future, based on the results of past bailouts.

Bob Keefe covers the West Coast for Cox Newspapers, focusing on business and technology.