EFIS Letter to Elected Officials Concerning Corporations off Balance Sheet Concerns Regarding Superfund Liability

February 18, 2009



The President of the United States of America
The White House
1600 Pennsylvania Ave NW
Washington, D.C. 20500

Dear Mr. President

The ever-escalating federal “bailouts” have resulted in unprecedented public investment and concomitant public financial interests in a plethora of key U.S. companies and industries. In considering such investments, we believe it is imperative that the public and Congress have complete information regarding the true financial condition of these companies. This includes critical off-balance sheet items such as environmental liabilities, which are all too often not quantified or reported in the financial information released by the companies. These liabilities can represent enormous hidden future costs and should be identified and included in the calculations used in deriving and valuing public investments in these firms.

This is especially relevant in the case of the three large U.S. automobile manufacturers. With the taxpayer on the hook for all liabilities, along with Congress’ desire to be paid back in full, the looming question of when GM, Ford and Chrysler will become profitable makes all off-balance sheet items a necessity to be factored into valuations of these concerns.

We have reviewed the most current financial statements from these companies and have found both omissions and contradictory information regarding estimates of future environmental liabilities. My firm, Environmental Financial Information Services (EFIS), specializes in compiling and tracking such environmental liabilities. To do this, we have assembled one of the nation’s largest databases of such information, compiled from federal records over the past 18 years.

Our records show, for example, that General Motors owns a Superfund site called the General Motors Central Foundry Division. EPA estimates the cleanup actions at this site to cost between $109 and $123 million. General Motors has been billed just under $12 million to date associated with this facility, leaving an approximate balance owing of $100 to $111 million. This information, however, is not included in the current balance sheet for GM.

One hundred million dollars may not seem a lot of money to a large company like General Motors, but in its current position, with negative stockholder equity, Congress and the public needs such information to properly assess and value the investments they are making. My firm, EFIS, provides such information to law firms, banks and other investors on a regular basis and we believe the same information may be both material and relevant to government officials involved in the massive public investment actions now underway.

If you or someone on your staff would like to discuss with us how we may be of assistance in providing this information, we would be happy to meet at your convenience. We have great appreciation for the unprecedented responsibilities you have assumed, and hope we may be of service to you and the public in this endeavor.

Sincerely,



Alexander C. Stewart, Jr.
President

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