U.S. senator calls on DOJ to force GM compensation fund

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A U.S. senator on Monday asked the federal government to force General Motors to establish a fund to compensate consumers affected by a long-running problem that prompted a major recall of some GM vehicles he characterized as "lethally defective."

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Democratic Senator Richard Blumenthal of Connecticut made the request in a letter to Attorney General Eric Holder. Blumenthal is a member of the Senate Commerce Committee, which will investigate GM's handling of the recalls for the ignition-switch problem.

"I urge that DOJ require that GM establish a fund to fully compensate consumers who suffered injury, death or damage as a result of these lethally defective vehicles," Blumenthal wrote, referring to the Department of Justice.

He added that the civil remedy could be applied even as the DOJ conducts a criminal investigation into GM taking more than a decade to recall autos with the flawed parts, which have been linked to 12 deaths.

In a telephone interview, Blumenthal, a former state attorney general, also said he wanted to hear testimony on the recalls "from GM officials who had knowledge and responsibility, which could include upper management, both current and past."

But the decision on who will be called to testify likely will be made by Senate Commerce Committee Chairman John Rockefeller of West Virginia and Senator Claire McCaskill of Missouri, who chairs the subcommittee that will conduct the hearings.

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Consumer groups already have called on GM to establish a compensation fund.

GM spokesman Jim Cain would not comment on Blumenthal's demand.

Cain noted that the new GM, which emerged from bankruptcy, "did not assume liability for claims arising from incidents or accidents occurring prior to July 2009."

But he also said, "Our principle throughout this process has been to put the customer first, and that will continue to guide us."

Blumenthal also asked Holder to intervene in pending civil actions stemming from the recall "to oppose any action by GM to deny responsibility for consumer damages on grounds that those damages may have resulted from deceptive and fraudulent concealment and other misconduct by GM."

(Reporting by Richard Cowan in Washington and Ben Klayman in Detroit; Editing by Jonathan Oatis and David Gregorio)