By Sharon Terlep; The Wall Street Journal ~ Aug 14, 2010

DETROIT—Republican Sen. Charles Grassley has asked the Obama administration for an analysis of the planned stock offering by General Motors Co. and how much money is likely to come back to the U.S. government.

In a letter to Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program, the Iowa Republican said he wants to ensure the Treasury Department and GM "are taking the steps necessary to ensure that the IPO results in the highest possible return for the American taxpayer."

GM was reorganized in bankruptcy court last year with the help of $50 billion in federal aid. GM has paid back $7 billion in cash; the rest of the government's investment has been converted into a 61% stake in the auto maker. A portion of that equity stake will be offered to investors in an offering expected later this year.

"In the interest of transparency and accountability it is essential that American taxpayers know whether they are getting a fair deal on the GM IPO and how large a financial loss they are likely to suffer," Sen. Grassley wrote in the letter, which was obtained by The Wall Street Journal. "Hopefully, when the dust settles, the taxpayer will not have lost billions of dollars on GM."

There is no reason that this should not be determined before, rather than after, the transaction is complete, the senator said.

GM's stock would need to be valued at $70 billion for the U.S. government to break even on its investment. Some Wall Street analysts have estimated GM's market value could top that of Ford Motor Co. at $41 billion and even exceed $70 billion.

Mr. Grassley also asked for an accounting of payments to finance firms putting together the IPO. He asked for the report "as soon as possible."

Sen. Gressley was a critic of GM earlier this year when the company made a $6.7 billion payment to the government using money from a pool of funding provided by TARP. GM touted the move as a repayment of the loans; critics said the company was merely giving back government money it had decided it no longer needed.

GM is expected to file registration papers for an initial public offering in coming days.

—Serana Ng contributed to this story.

Write to Sharon Terlep at [email protected]