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A Project of The Annenberg Public Policy Center

False Claim on Plant Closing in Indiana

In Indiana’s Senate race, Democratic Rep. Brad Ellsworth falsely alleged that his Republican opponent Dan Coats was involved in the closing of an automotive plant that left more than 800 people out of work. Ellsworth himself told the Associated Press, "We don’t know Mr. Coats’ direct involvement in the closing of this plant."

Ellsworth charged that Coats played a role in the decision to close the plant in a Sept. 20 speech delivered outside the old GDX Automotive factory gates in Wabash, Ind. "This factory behind me, GDX, is on Mr. Coats’ resume," Ellsworth said.

Two days later, the Ellsworth campaign posted a  YouTube video featuring statements from Hoosiers affected by the plant closing. The video is labeled: "Dan Coats’ Role in Closing GDX Automotive in Wabash, Indiana."

Ellsworth’s charge is based on Coats’ former job as a lobbyist for King & Spalding, a firm that once represented the hedge fund Cerberus Capital Management. Cerberus owned GDX International Holdings Ltd., an automotive company with a plant in Wabash, from 2004 until 2007. GDX International was sold to MAPS Holding Inc. and the Wabash plant closed down in November 2007.

It’s true that Coats was a lobbyist for King & Spalding. Lobbying disclosures confirm that Coats worked on the Cerberus account during part of 2007 and 2008. However, King & Spalding’s year-end report in 2007 for the Cerberus account shows that no lobbying activity occurred between July 1, 2007 and Dec. 31, 2007. The plant closed its doors in November of that year.

According to his financial disclosure report, Coats — a former U.S. senator and ambassador to Germany — also served as a consultant to Cerberus. The Indianapolis Star reported that "his involvement with this private investment firm was primarily representing it as it expanded operations in Germany. He said he also represented the firm before the federal Office of Thrift Supervision, as it sought federal qualification for an industrial loan bank."

While there is a connection between Coats and Cerberus Capital Management, there is no evidence that Coats had any involvement in the decision to close the GDX automotive plant.

by Kelsey Ferguson