Last year's effort by the Obama administration, General Motors and Chrysler to help save the automakers by closing thousands of dealerships is coming under federal scrutiny again, this time for possible illegal misconduct.
The special inspector general for the Troubled Asset Relief Program is investigating whether any laws were broken in the handling of the dealership cuts, the office's spokeswoman said.
The spokeswoman, Kris Belisle, declined to say which organizations or individuals are being targeted in the investigation. She also wouldn't say which actions are being scrutinized or whether the investigation is a criminal or civil inquiry.
"There is an investigation," Belisle told Automotive News last week. "Generically, we can investigate any offense."
In late 2008, TARP was given $700 billion by Congress to bail out U.S. banks and companies, including GM and Chrysler.
Investigators for the special inspector general can issue subpoenas, make arrests and refer cases to the U.S. Justice Department for prosecution. Their investigations can lead to indictments and, ultimately, penalties such as fines or imprisonment.
The inspector general, former federal prosecutor Neil Barofsky, is following up on his more general audit of the dealer cuts in July, Belisle said.
The auditors expressed doubt about the credibility of GM's and Chrysler's estimates of savings from the dealership cuts. They also faulted GM for keeping inadequate records of its decision-making on terminations.
GM has eliminated about 1,550 dealerships and Chrysler about 760 since their bankruptcies in 2009.
The Obama auto task force has said it pushed GM and Chrysler to make more dealership cuts than the automakers had planned. But the task force said it left to the automakers how many dealerships were to be targeted and which ones they were to be.