Schweitzer and a New York hedge fund won four of eights seats on the board of Stillwater Mining Co. last week, one of multiple companies in which Schweitzer personally invested after using his official position to advance their financial interests.

Critics say the deals raise questions about a potential abuse of power.

“Schweitzer is apparently quite a wheeler-dealer, and his business dealings merit further scrutiny,” said Matthew Vadum, editor at the Capital Research Center.

Schweitzer is considering a run for the Senate seat being vacated by the retiring Sen. Max Baucus (D., Mont.).

“I think [Schweitzer’s critics] will use this if he does decide to run for higher office,” predicted Steve Stanek, a financial expert at the Heartland Institute.

“I’d say he has looked for ways to enrich himself,” Stanek said. “It would certainly not be the first time that someone in office has done that.”

Schweitzer has been mentioned as a potential dark horse presidential candidate.

Political observers say Schweitzer’s populist credentials could be an asset in a presidential run. Those credentials were on full display in 2009, when he exercised his sway as governor to preserve a lucrative contract for Stillwater.

As the federal government bailed out General Motors (GM) in July 2009, the automotive company announced that it would kill a contract with Stillwater for palladium and platinum in favor of cheaper foreign sources.

The GM contract was important to Stillwater’s financial success, since the “overwhelming majority” of platinum and palladium produced by the company was used in automotive catalytic converters, according to the Associated Press.

“GM officials made it clear they are not interested in reconsidering the terminated supply contract,” Stillwater said in a news release at the time.

Schweitzer was enraged.

“Damn right, I’m mad,” he said. “They reached into my pocket [via the bailout] so they can stay in business and then they take actions to put Montanans out of business.”

Schweitzer even said he would stop driving his Chevy pickup truck in protest.

He sent letters to then-Treasury Secretary Timothy Geithner and chief White House economist Larry Summers, who co-chaired the administration’s automotive task force, expressing his displeasure at GM’s decision.

GM renewed its Stillwater contract the following year.

Within two months of leaving the governor’s mansion, Schweitzer purchased 25,000 shares of Stillwater stock. He later joined the hostile takeover attempt of the New York hedge fund the Clinton Group. The hedge fund did not respond to a request for comment by press time.

Stillwater executives see opportunism in Schweitzer’s attempt to take over the company.

“We’re going to have a higher share price, and these guys see that and on the cheap they want to take control of a company as well-positioned as we are,” CEO Frank McAllister told the Associated Press.

Montana political experts say Schweitzer’s investment in a company whose interests he advanced as governor reflects his leadership style.

“Schweitzer ruled Montana’s state bureaucracy and political class with an iron fist during his tenure as governor,” said Carl Graham, CEO of the Montana Policy Institute.

“His reputation among insiders for rewarding friends and punishing enemies rivaled that of the Copper Barons in Montana’s history books,” Graham said.

Just as the populist appeal of Schweitzer’s work on Stillwater’s behalf obscures perceptions of cronyism, his advocacy for the wildly popular Keystone XL Pipeline involved a deal that enriched a company in which Schweitzer subsequently invested.

Schweitzer said he spent 18 months of his governorship convincing TransCanada, the company building the pipeline, to build an “on-ramp” to the pipeline in Montana.

The goal was to enable Montana oil producers, many of which draw crude oil from the Bakken shale formation, which sits below Montana and North Dakota, to cheaply ship oil to refineries and export terminals.

The president of Oklahoma-based Continental Resources, which owns more North Dakota drilling acreage than any other oil company, met with TransCanada in 2008. Continental CEO Harold Hamm said “they weren’t interested” in hauling Bakken oil via the pipeline.

That all changed after Schweitzer went to bat on Continental’s behalf. He threatened to tie up the pipeline, which was slated to run through Montana, in red tape.

“I said, ‘Tell you what I’ll do to TransCanada. I’ll tie one leg up there, and they’ll start listening,’” Schweitzer told the Washington Post. “That’s exactly what I did.”

“Guess what, the next thing we know we’re having a meeting,” Hamm said. “TransCanada, producers, [Schweitzer] was present, as was the governor of North Dakota. And TransCanada felt that an on-ramp seemed pretty feasible. It’s amazing how some of those things come about.”

Schweitzer personally brokered the meeting that resulted in an agreement between TransCanada and Bakken producers, according to TransCanada CEO Russ Girling.

“The spark was the governor,” Girling told the Post. “He said: ‘I can see growth and a pipeline coming through my back yard. You, TransCanada, and producers have to get together.’ He pushed it, and we’re all glad he did.”

Hamm called Schweitzer his “new best friend.” The Bakken on-ramp was officially announced in September 2010.

At some point between December 2010 and December 2012, Schweitzer bought stock in Continental Resources, according to biennial financial disclosure forms filed with the Montana Commission on Political Practices.

Schweitzer did not return requests for clarification on when he bought the stock or how much he owns. Continental also did not respond to a comment request.

The Chevrolet Malibu Eco, Buick LaCrosse, and Regal sedans all have improperly functioning generator control modules.

GM’s eAssist system uses a battery and an electric motor to supplement a traditional gasoline engine and save fuel while giving the car peppier acceleration.

The company said a malfunctioning generator control module can result in gradual loss of battery charge and activation of a malfunction warning light. If the driver ignores the warning the engine may eventually stall. The condition could also result in a burning or melting smell, and in rare cases, fires in the car’s trunk. […]

GM said it is aware of generator control board incidents, including two trunk fires. Most of these episodes took place during the first 1,000 miles of use. Cars built after December 2012 are not included in the recall. GM said it knows of no injuries related to the problem.

“We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers,” said Tim Massad, Treasury assistant secretary for financial stability, in a statement.

In December, the Treasury said it would fully exit its GM investments within the following 12 to 15 months, “subject to market conditions.”

It gave no specific dates for the resumption of share offerings.

“I don’t have any comment on legal matters,” he said.

When pressed on the possibility of losing $1 billion and adding to the nearly $20 billion already lost by taxpayers on the bailout, he said, “I think I just commented, that’s it,” before jumping into a GMC SUV.

When GM went through bankruptcy, it split into two companies. “Old GM” absorbed the company’s debts. The “new” GM that Akerson leads received the company’s assets, as well as $50 billion in taxpayer money from the auto bailout.

Creditors trying to collect on $50 billion in debts accrued by “old GM” are seeking to overturn a backroom deal between auto executives and several hedge funds that occurred on the eve of bankruptcy proceedings.

Negotiations between the two parties broke down on Wednesday. The lawsuit will return to Judge Robert Gerber, who oversaw GM’s bankruptcy proceedings. The judge has slammed the company in the past for failing to inform him of the deal during bankruptcy proceedings.

Akerson came to Capitol Hill to unveil the brand new 2014 Corvette Stingray, fresh off a “Best in Show” victory at the Detroit Auto Show. Dozens of lawmakers brandished cameraphones to capture them standing around the 450 horsepower, steel grey vehicle.

The meeting took place at the Capitol Hill Club, a Republican social club. Akerson said he was in town to put politics behind the automaker, which has been denigrated as “Government Motors” since taking the $50 billion bailout.

“The report card I was able to provide a broad spectrum of our legislators [was] received well on both sides of the aisle … it’s been a really fruitful, beneficial day, I hope for the congressional members, as well as myself,” Akerson said. “We weren’t on any ballot last year, but we seemed to be in every campaign; we’re a commercial enterprise and our job … is to transform the company into the 21st century.”

Akerson did inject the company into the 2012 campaign even before general election campaigning began despite his stated aversion to politics. When eventual GOP nominee Mitt Romney criticized the cost of the bailout during the Republican primary, Akerson called him “short-sighted.” However, the Treasury Department began selling off its GM shares shortly after the election at a multi-billion dollar loss.

Akerson seemed to recognize the pitfalls of holding a closed door meeting with lawmakers in the wake of the bailout. When asked if he had asked Congress to advance a particular agenda, Akerson responded, “Nope, we’re fine.”

Auto expert Ed Niedermeyer said Akerson’s sentiment would be much better received were he not speaking in the shadow of the Capitol after leaving a meeting “with no press or public access.”

“Akerson has refused to shake off the ‘Government Motors’ label that is wreaking havoc on GM’s ability to market its cars,” he said. “The only public message is that every large business should be similarly concerned with kissing the ring in D.C., rather than competing on an even playing field.”

The iconic reboot of the Corvette Stingray—the first since 1976—embodied the new direction GM is taking in the wake of the bailout. The car can go from 0 to 60 miles per hour in under 4 seconds, but also gets nearly 30 miles per gallon, according to Chevrolet spokesman Russ Clark.

“This car is all about efficiency and fuel economy; it’s pure American innovation,” he said. “We wanted to make sure we designed a car worthy of the Stingray name and the 21st century.”

“Another very, very cool car,” Michigan Democratic Sen. Debbie Stabenow later said to Clark.

Sen. Carl Levin (D., Mich.) soon joined the pair.

“Beautiful,” he murmured before ducking into the club.

GM spokeswoman Heather Rosenker expects a “full house” when Akerson debuts the 450 horsepower sports car at the Capitol Hill Club. The CEO then plans to update the bipartisan gathering on the state of GM in a closed-door meeting.

“We update stakeholders just like members of congress as part of our normal operating procedure,” Rosenker said. “We’ve already put the bailout behind us because we’re doing the best we’ve ever done.”

Rosenker did not respond to follow up requests regarding the collapse in settlement talks that could leave GM on the hook for up to $1 billion and take as much as 50 cents per share of the company’s stock price.

When GM went through bankruptcy, it split into two companies. “Old GM” absorbed the company’s debts. The “new” GM that Akerson leads holds the company’s assets and received $50 billion in taxpayer money during the auto bailout.

A deal between several hedge funds and auto executives to expedite the bankruptcy sparked a lawsuit filed by Old GM’s creditors.

Settlement talks between the two parties fell apart on Wednesday, a development that could unravel entirely the 2010 bankruptcy that created GM as it exists today.

Akerson, who was expected to meet one-on-one with lawmakers after the group gathering, cancelled those meetings citing scheduling conflicts, according to Hill sources.

Rep. Mike Turner (R., Ohio) was incensed when the company cancelled his meeting with the CEO. Turner hoped Akerson could shed some light on the Delphi pension scandal in which 20,000 non-union employees and retirees had their pensions slashed by up to 70 percent to speed GM through bankruptcy.

“It seems to me that he’s not prepared to answer tough questions from Congress about the billions of taxpayer dollars lost and the thousands of Delphi retirees,” Turner said. “The CEO sees the Congress as props and backdrops for his Washington unveiling … he should be doing a transparency tour rather than a victory lap.”

The visit comes four months after the Treasury Department announced that it would sell off 300 million shares of GM stock “in the next 12-15 months, subject to market conditions.” Taxpayers could lose billions on the withdrawal despite assurances from Obama that GM “repaid their loans.”

GM’s stock would need to reach $72 per share in order to fully recover the $50 billion taxpayer bailout—nearly two-and-a-half times GM’s $29.20 closing price on Wednesday.

Treasury officials did not respond to questions regarding the status of its GM holdings.

Akerson and the administration have touted the company’s success in recent months, citing its reemergence as the world’s top car seller. Yet the company faces dwindling market share, turmoil from a slumping European market, and lending problems.

The company increasingly relies on subprime loans to move cars out the door and its primary prime lender, fellow bailout recipient Ally Bank, failed a Federal Reserve stress test two weeks ago.

Critics blasted Akerson’s visit, saying it would rekindle the “Government Motors” moniker they say has hurt sales.

“GM’s leaders are preventing the rehabilitation of its traditional image and turning off customers,” said auto expert Ed Niedermeyer. “That Akerson is coming to D.C. shows that cronyism … is more important to him than … the good of the business.”

Rosenker said critics exaggerate the impact the bailout has had on GM’s ability to sell cars. She said the Treasury withdrawal will erase any lingering bittnerness over the bailout.

“The majority of the American public has witnessed 22,000 jobs kept in this country, the revenue we paid to states and cities, the folks we kept employed, and know that has far outweighed [the cost of the bailout] during both administrations,” she said. “Once [Treasury sales are] completed there will be some folks who didn’t support the bailout who will come back to us again.”

Akerson has previously acknowledged that GM sales suffered after becoming “a political punching bag” because of the bailout and production of its electric car, the Chevy Volt.

Some industry observers are skeptical that GM will be able to immediately regain its all-American image of “baseball, hot dogs, apple pie, and Chevrolet.”

“The bailout has definitely hurt GM … because there are plenty of people out there who still harbor resentment over the fact that GM got taxpayer money,” said former GM marketer Peter De Lorenzo. “The Treasury Department’s withdrawal will ultimately benefit GM but the perception of GM as a ‘tainted’ company will linger for years to come.”

Despite the nearly half-billion-dollar sale, taxpayers still own about 277 million shares in GM. In order for taxpayers to break even on the bailout, GM shares would have to more than double in price, USA Today reports:

The report says the government has recovered about $29.8 billion of its $49.5 billion bailout, leaving taxpayers still on the hook for $19.7 billion.

The price per share in the latest sale was not immediately disclosed, but the AP says GM stock ranged in price from $26.19 to $29.36 in February.

If the government sold about 17.6 million shares, based on the midpoint of its share price last month, that means it still has a 277-million stake in GM. In order to break even, taxpayers would have to see the government get more than double the recent share price, at least $71 a share, in order to break even on the GM stake.

High production costs and falling profit-per-car have led auto manufacturers to turn to financing to earn higher profits. Automakers have capitalized on lending by not only loaning money to customers but also packaging and selling those loans to investors in a manner similar to the sale of mortgage-backed securities that created the housing bubble.

The dramatic increase in securitization has coincided with GM’s acquisition of AmeriCredit, one of the nation’s largest subprime auto lenders, which it renamed GM Financial (GMF).

“It’s becoming Fannie Motors,” said Competitive Enterprise Institute finance scholar John Berlau, referring to the government-backed housing lender Fannie Mae. “They’re still using our tax dollars to break into exotic and money-losing propositions from Chevy Volts to subprime loans, both of which could literally and figuratively blow up in their faces.”

85 percent of GMF loans are subprime.

GM has redoubled its efforts to capture revenue from the banks. The company issued nearly $60 billion in asset-backed securities (ABS) between 1994 and 2010. The bailed out automaker issued $5.6 billion in securities in 2012, a 50 percent jump from the average ABS issuance between 1994 and 2010 and $1 billion more than 2011, according to GM Financial spokeswoman Chrissy Heinke.

Heinke did not respond to additional questions submitted via email by the Washington Free Beacon.

“Securitization is happening everywhere in the industry,” said Ed Niedermeyer, an auto industry consultant. “They have to be greedy because the fundamentals of the car business are not sound. If the fundamentals were sound, they could profit like everyone else is.”

Auto-loan backed securities are among the fastest growing financial instruments, growing to nearly $100 billion in 2012. Investors are attracted to the relatively low risk, high collateralization, and short turnaround in the auto market, according to risk analyst Christopher Whalen.

“Auto paper has behaved well even during the recession,” he said. “The average lifespan is less than two years…[it] doesn’t have long term risk of a 30 year mortgage.”

GMF has the riskiest lending portfolio of any major car company: 96 percent of its customers have credit scores below 660.  GM’s lending habits parallel those in the housing market leading up to the 2008 crash, Niedermeyer said.

“There’s no doubt that all the makings of the bubble are here; risk is up subprime is up and this bubble has to exist for GM to look like a viable car company,” he said.

One Wall Street insider disagreed, pointing out that the long-term nature of the market is better able to react to trouble in auto securities that mature within a couple of years, rather than the mortgage industry’s long-term lifespan.

“Default on subprime stuff is pretty nasty, but I don’t know if it’s a bubble in terms of credit quality,” the source said.

GM finished the year with 8.5 percent of loans in delinquency, the highest rate since 2010 and larger than the delinquency rates at Ford, Toyota, and Honda combined.

The numbers failed to provoke the calls for oversight that accompanied the collapse of the mortgage industry. President Barack Obama exempted subprime auto loans from the authority of lending watchdogs at the Consumer Financial Protection Bureau.

Niedermeyer is worried that GM’s competitors will follow the path down subprime if GM is able to continue its lending practices with little oversight, though he adds that the U.S. is “still years away from a 2008 scenario.”

“Bubbles take on a life of their own,” he said. “GM’s risky behavior and the government’s willingness to look the other way threaten the larger economic picture.”

General Motors, the largest U.S. automaker and the recipient of a federal bailout, saw year-to-date sales increase by only 3.5 percent from 2011 to 2012, the Wall Street Journal reports. Ford Motors saw sales increase by five percent. Chrysler grew much faster than its domestic competitors, at 21.8 percent. GM saw its market share fall from 19.7 percent to 17.9 percent and Ford’s fell from 16.8 percent to 15.5 percent. Only Chrysler saw its market share increase, going from 10.7 percent to 11.4 percent.

Toyota saw its sales increase by 28.8 percent, remaining the third largest U.S. auto company by sales. Honda saw sales rise by 23.8 percent. Both companies expanded their market share: Toyota increased from 12.7 percent to 14.4 percent while Honda increased from nine percent to 9.8 percent. The German automaker Volkswagen saw one of the largest increases in sales, at 35 percent, increasing their market share to three percent.

GM owns a seven percent stake in PSA Peugeot Citroën, which has faced intense scrutiny for its business relationship with Iran.

Peugeot has long been one of Iran’s central auto partners, providing parts and technology to Iran’s leading car manufacturer, Khodro Company. Khodro is believed to have economic ties to the regime’s Islamic Revolutionary Guard Corps (IRGC).

Although Peugeot and GM maintain the manufacturer “suspended” shipments to Iran in March, sanctions experts argue that the relationship has continued to flourish behind the scenes.

“We are still quite concerned with Peugeot’s business in Iran,” said Nathan Carleton, spokesperson for United Against Nuclear Iran (UANI), a nonpartisan advocacy group that pressures international companies to cease dealings with Tehran.

“While Peugeot has claimed to have suspended shipments to Iran, numerous reports show that parts are still arriving there and automobiles still being produced—since March 2012 more than 100,000 Peugeot vehicles have been produced in Iran,” Carleton said.

Peugeot’s alliance with Iran is of particular concern to UANI and other observers due to GM’s stake in the corporation.

“In this holiday season, as charities compete for Americans’ generosity, Americans should know that thanks to GM’s partnership with Peugeot, a company funded with their tax money has effectively made its own charitable contribution to enrich a genocidal regime,” said Michael Rubin, a former Pentagon adviser on Iran and Iraq.

As one of Tehran’s top trading partners, the GM-backed Peugeot is responsible for injecting billions into the Iranian economy, thereby frustrating Western efforts to sanction Iran for its nuclear enrichment program.

“The hundreds of millions of dollars that Citroen generates for the Iranian economy through taxes, fees etc., flows through the IRGC, the entity that runs the financial arm of Iran’s nuclear and terror programs,” said Mark Langerman, a financial adviser who is managing director at the Patriot Fund, an investment firm that shuns companies tied to Iran.

“We bailed GM out to the tune $50 billion and the U.S. Treasury Department owns over 25 percent of GM stock, which means by extension that we—you and me—own stock in a company that is partnered with one on the biggest contributors to Iran’s economy,” Langerman said.

A GM spokesperson did not respond to a Washington Free Beacon request for comment.

Reports indicate that Peugeot’s cars were still being sold in Iran as recently as November.

Peugeot’s claim to have “suspended” its business with Iran does not go far enough, said UANI’s Carleton.

“Peugeot has never said that it will permanently leave Iran or taken any sort of stand against the Iranian regime,” he said. “At best Peugeot has announced temporary suspensions of shipments but vowed that they might resume in a few months. That is not the point of sanctions or our campaigns. Peugeot must pull out of Iran.”

Peugeot disputes its critics’ claims, stating that it is simply impossible for the company to continue its Iranian exports.

“We decided to suspend everything” in February, a spokesperson at the company’s headquarters in France said.

Economic sanctions have made it virtually impossible for companies such as Peugeot to secure financial assurance on its deliveries to Tehran, the spokesperson said.

“You export with no assurance you’ll be paid, which is no way to do business,” said the spokesperson. “Given that there’s no way to finance, we had to suspend the exports. We can’t make business with Iran anymore.”

Peugeot does not intend to resume business with Iran in the near future due to increasing economic sanctions, according to the spokesperson.

The French carmaker has historically shipped parts to Iran’s Khodro, which then assembles and manufactures various Peugeot-designed automobiles.

Peugeot has also co-developed certain model vehicles with Iran, which has the manufacturing capability to fabricate some of these cars domestically.

Khodro has also partnered with Renault and Suzuki.

Iranian press reports have indicated that the suspension of Peugeot’s car parts shipments have failed to cripple the country’s auto sector.

“Iran has succeeded to not only supply spare parts for Peugeot cars it manufactures, but also to design and market other cars,” Mohsen Salehinia, Iran’s deputy minister of industry, was quoted as saying earlier this year.

Several Peugeot car models were “still being sold in Iran” as late as November, according to Azerbaijan’s Trend News Agency.

GM originally struck a deal to purchase seven percent of Peugeot in February, when the company was still dealing with Iran despite U.S. economic sanctions banning this type of activity.

GM spent $400 million for its stake in Peugeot, according to reports.

The auto companies have since tightened their alliance.

At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009.

One condition of GM’s bailout was to shore up its overseas subsidiaries. On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company.

All of that could be reversed if bankruptcy Judge Robert Gerber reopens the process and rules in favor of old GM trustees, who are suing the hedge funds at the center of the lockout agreement.

“In this particular situation, there’s $1.3 billion in liabilities, but that’s just what’s officially back on the table if the court rules for old GM,” said a bankruptcy expert close to the negotiations. “If those go back on the table then everything could be back on the table and [new GM] would have to address them.”

Those liabilities, which include old GM’s debt and product liabilities that pre-date bankruptcy, are valued at $30 billion, a sum that would wipe out the company’s $34.6 billion cash reserves.

Negotiators representing both sides of the case met in New York on Thursday to try to settle the suit through mediation rather than a court order.

“They’re feeling pretty good about it,” said an industry insider who spoke to one of the hedge fund negotiators on Thursday.

Gerber, the federal judge who initially approved the sale with little hesitation, now has the power to reverse the entire auto bailout. He has expressed deep frustration with the company for failing to disclose the deal, leading some to speculate that he may overturn one of President Barack Obama’s signature achievements.

“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.

“The judge has made it very clear that he is greatly dissatisfied with the process,” one analyst told the Washington Free Beacon in October. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”

If Gerber takes that course the company could be forced to return the $30 billion taxpayer bailout that it received through the course of bankruptcy, on top of the new liabilities.

“It’s nice to see that GM is profitable again, but if all the liabilities come back to roost, short that stock,” the bankruptcy expert said.

A GM spokesman declined comment since the litigation is pending.

The Canadian and American governments played vital roles in the deal and pushed GM to negotiate as quickly as possible.

“Officials from the U.S. and Canada were very much involved—they were in the building when the deal was being negotiated,” an insider familiar with the deal said in October.

The Treasury Department, which oversaw the auto bailout, did not return emails for comment.

The company is taking the possibility of a negative ruling from Gerber very seriously. GM attorneys filed court documents saying that the lawsuit “could create a chaotic situation for GM Canada, spawn new litigation in other forums, and potentially provide a windfall to the noteholders.”

The bankruptcy expert said if the two sides cannot come to an agreement on Thursday, Gerber could preside over one of the most historic rulings in bankruptcy court history.

“This has tremendous implications for future of American business and bankruptcy precedent,” he said. “It means more than just GM—this is the rule of law and how creditors are treated in the United States legal system.”