A new TV commercial touting General Motors' payback of bailout loans is stirring up controversy over its veracity and now a watchdog group wants the Federal Trade Commission to investigate the ad campaign.

The Competitive Enterprise Institute has filed a formal complaint with the FTC, arguing that GM chairman and chief executive Ed Whitacre is shading the truth when he states that GM has "repaid its government loan in full, with interest, five years ahead of the original schedule."

The U.S. Department of the Treasury did put out a press release on April 21 that said GM had fully repaid its debt by paying the remaining $4.7 billion of its $6.7 billion it owed.

Treasury Secretary Tim Geithner even stated for the record: "We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability."

But there are two problems with that, according to the Competitive Enterprise Institute.

"GM might argue that its ad is literally accurate, but the fact is it's completely misleading," Hans Bader, the Competitive Enterprise Institute's counsel, said in a statement.

First, the U.S. government originally loaned GM about $50 billion from the Troubled Asset Relief Program.

Ultimately, much of that debt was converted into an ownership stake. As of April, the Treasury owned $2.1 billion in preferred stock and 60.8% of GM's common stock.

Until GM buys the stock back, it is false to claim its debt to the United States is repaid, the Competitive Enterprise Institute argues.

A March 2010 report from the Congressional Budget Office said that U.S. auto companies received $85 billion in commitments from TARP, but have only repaid $3 billion in principal.

Even more pointedly, the Competitive Enterprise Institute, a conservative think tank, is questioning the source for GM's recent payback of debt, charging that GM was simply using other TARP funds to pay back this debt.

"GM apparently repaid its loan by using other federal funds," the Competitive Enterprise Institute is charging.

The FTC, which oversees the fairness and accuracy of advertising, needs to access whether viewers are being deceived, according to the Competitive Enterprise Institute.

"Most consumers would reasonably interpret GM's ads as meaning both that GM has paid back all the money that it received from the government, and that those repayments were made with its own funds rather than with other government funds. Neither of these interpretations is accurate," the Competitive Enterprise Institute said.

Sen. Chuck Grassley, R-Iowa, has also raised the same charge against GM.

The Treasury Department issued a letter to the senator on April 27 that said that while GM did use funds from an escrow account funded by a loan made by the Treasury and the Canadian government to repay its debt, this was long expected.

Under a loan agreement with the Treasury, any funds in the escrow account in June 2010 had to be used to repay its loans. After the Treasury repayment, $6.6 billion remained in the account for GM's general use, according to the letter from Herbert M. Allison Jr., the assistant secretary for financial stability, to Grassley.

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