The Volokh Conspiracy - The Chrysler Conspiracy:

There's a lot of buzz on the net about how specific Chrysler dealerships were selected for closure as part of the auto company's restructuring. On the surface, it appears the shuttered dealerships are disproportionately owned by donors to Republican candidates while hardly any dealerships owned by Democratic donors were placed on the closure list. Even those quite skeptical of the story, such as Megan McArdle, think the pattern "doesn't look good."

Is it possible the Obama Administration is using the Chrysler restructuring for political gain? Of course it's possible; give politicians of either party the ability to reward friends and punish enemies and they'll often take advantage. It's not just the "Chicago Way," it's the way of politics. But in this case, it seems like there's much more smoke than fire.

Sean Parnell of the Center for Competitive Politics, who is well aware that public disclosure of campaign contributions can bring political repercussions, thinks the charges in this case "are almost certainly not true." He writes:

While things may have changed somewhat since the days I was raising money for a Republican member of Congress, auto dealers are almost overwhelmingly Republican. Pretty much by definition, if you're going to be closing down auto dealerships, you're going to be closing down an awful lot of Republican-owned auto dealerships. A quick look at the giving by the National Auto Dealers Association PAC consistently shows contributions going to Republican candidates by about a 2 to 1 margin, and nearly 3 to 1 in one recent cycle.

More telling, however, is the fate of minority-owned auto dealers under the closings. If the Obama administration were targeting political opponents for closure, it would seem likely that political allies, or at least those the Obama administration presumably favors, would have a lower closure rate than others.

It's speculation on my part, but I'm going to go out on a limb here and say that minority-owned dealerships would come out better-than-expected if the Obama administration were using auto dealership closures as a tool of political revenge.

So what do the numbers show? From an article in the Seattle Medium:

Of the 789 Chrysler dealers who were notified that their contracts will not be renewed, 38 are minority owned...

At the end of April, there were 154 minority dealers in Chrysler's 3,181 total U.S. dealer body network . . .

According to my trusty calculator, before closings 4.84% of Chrysler's dealers were minority owned. What percentage of auto dealers receiving closure notices are minority owned? 4.82%

At this point, the case for Obama's use of campaign disclosure reports to compile an "enemies list" for use in the closure of auto dealerships pretty much falls apart, unless someone wants to really make a big deal of the two one-hundredths of a percent where minority-owned dealerships come out ahead.

I would also echo McArdle's sentiment that if there were any political funny-business in the Chrysler closings (and that's a big "if" at this point), it's far more likely that someone in the Administration intervened to protect an important Democratic contributor here or there than that the entire process was used to slam Republican dealers across-the-board. In any event, it seems to me there is far less to this story than meets the eye.

	[Jonathan Adler, May 29, 2009 at 9:18am] Trackbacks The Chrysler Conspiracy: There's a lot of buzz on the net about how specific Chrysler dealerships were selected for closure as part of the auto company's restructuring. On the surface, it appears the shuttered dealerships are disproportionately owned by donors to Republican candidates while hardly any dealerships owned by Democratic donors were placed on the closure list. Even those quite skeptical of the story, such as Megan McArdle, think the pattern "doesn't look good." Is it possible the Obama Administration is using the Chrysler restructuring for political gain? Of course it's possible; give politicians of either party the ability to reward friends and punish enemies and they'll often take advantage. It's not just the "Chicago Way," it's the way of politics. But in this case, it seems like there's much more smoke than fire. Sean Parnell of the Center for Competitive Politics, who is well aware that public disclosure of campaign contributions can bring political repercussions, thinks the charges in this case "are almost certainly not true." He writes: While things may have changed somewhat since the days I was raising money for a Republican member of Congress, auto dealers are almost overwhelmingly Republican. Pretty much by definition, if you're going to be closing down auto dealerships, you're going to be closing down an awful lot of Republican-owned auto dealerships. A quick look at the giving by the National Auto Dealers Association PAC consistently shows contributions going to Republican candidates by about a 2 to 1 margin, and nearly 3 to 1 in one recent cycle. More telling, however, is the fate of minority-owned auto dealers under the closings. If the Obama administration were targeting political opponents for closure, it would seem likely that political allies, or at least those the Obama administration presumably favors, would have a lower closure rate than others. It's speculation on my part, but I'm going to go out on a limb here and say that minority-owned dealerships would come out better-than-expected if the Obama administration were using auto dealership closures as a tool of political revenge. So what do the numbers show? From an article in the Seattle Medium: Of the 789 Chrysler dealers who were notified that their contracts will not be renewed, 38 are minority owned... At the end of April, there were 154 minority dealers in Chrysler's 3,181 total U.S. dealer body network . . . According to my trusty calculator, before closings 4.84% of Chrysler's dealers were minority owned. What percentage of auto dealers receiving closure notices are minority owned? 4.82% At this point, the case for Obama's use of campaign disclosure reports to compile an "enemies list" for use in the closure of auto dealerships pretty much falls apart, unless someone wants to really make a big deal of the two one-hundredths of a percent where minority-owned dealerships come out ahead. I would also echo McArdle's sentiment that if there were any political funny-business in the Chrysler closings (and that's a big "if" at this point), it's far more likely that someone in the Administration intervened to protect an important Democratic contributor here or there than that the entire process was used to slam Republican dealers across-the-board. In any event, it seems to me there is far less to this story than meets the eye.