For Release: August 5, 2009
Contact: David Almasi at (202) 507-6398 or [email protected]
President Obama Must Dismiss GE CEO Jeff Immelt from the Economic Recovery Advisory Board
Washington, DC - Today, the Free Enterprise Project calls on President Obama to dismiss General Electric CEO Jeff Immelt from the president's Economic Recovery Advisory Board because of the findings revealed in a settlement between the Securities and Exchange Commission (SEC) and GE.
The SEC said, "GE bent the accounting rules beyond the breaking point" and "GE misapplied the accounting rules to cast its financial results in a better light."
The SEC complaint cited four separate accounting violations one of which "allowed GE to avoid missing analysts' final consensus EPS expectations."
Importantly, all the accounting irregularities occurred while Jeff Immelt served as CEO.
"It's outrageous for President Obama to keep Immelt as an advisor when the SEC charged that GE engaged in a series of efforts to manipulate earnings to mislead investors. The pattern of corruption raised by the SEC is deeply concerning and during a time of economic crisis, the last thing America needs is a Bernie Madoff type CEO giving advice to the president," said Tom Borelli PhD, Director of the Free Enterprise Project.
GE agreed to pay $ 50 million to settle the fraudulent accounting charges without admitting or denying any wrongdoing.
"The deliberate manipulation of financial data to mislead shareholders about earnings, if true, is fraud and Immelt must be held accountable. Not only should Obama dismiss Immelt from his advisory capacity but GE's board of directors should immediately seek his resignation from the company," added Borelli.
"Given the nature of the SEC charges, Obama should question the motivation and truthfulness of everything Immelt says including the company's support of cap-and-trade legislation. Immelt's support of cap-and-trade has nothing to do with a concern for the planet but everything to do with setting government mandates to purchase renewable energy products such as GE wind turbines."
"If Immelt misled shareholders about earnings he could easily mislead the president on everything from climate change to health care."
The Free Enterprise Project is a program of the National Center for Public Policy Research, which is a free-market communications and research foundation established in 1982 and located on Capitol Hill. It receives support from over 80,000 individual contributors. Under 2 percent of its revenue is received from corporations. For more information, visit the Free Enterprise Project webpage at http://www.freeenterpriser.com/ or read about its activities on the National Center's blog at http://www.nationalcenter.org/labels/FreeEnterpriseProject.html.