• Ad Age, Detroit News, Thursday, May 6, 2010 12:47 AM

The advocacy group Competitive Enterprise Institute filed a formal complaint with the Federal Trade Commission, charging General Motors with deceptive advertising. CEI claims GM misled the public when it said in a national TV ad it has paid back its Troubled Assets Relief Program bailout loan from the government. The spot, which was created by McCann Erickson, Detroit, ended its run last week, reports Ad Age.

 

Critics argue the ad is disingenuous -- the repayment was financed from another TARP bailout, not actual GM profits. GM has repaid only a fraction of those funds -- barely 10%. Moreover, GM apparently repaid its loan by using other federal funds, CEI charges. One TV pundit described it as "paying off your MasterCard with your Visa."

Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee, said in a letter obtained by The Detroit News to GM chairman and CEO Edward Whitacre Jr. that the company "has come dangerously close to committing fraud and that you might have colluded with the U.S. Treasury to deceive the American public."  GM's ads featured Whitacre touting that fact that GM "repaid our government loan in full, with interest, five years ahead of the original schedule."

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