FREEDOM PARTNERS PRESS OFFICE FOR IMMEDIATE RELEASE MEDIA@FREEDOMPARTNERS.ORG 6/3/2015 703.888.2527 VIEW ONLINE HERE Ex-Im As A Lender Of Last Resort? Arlington, VA The Export-Import Bank s leadership has claimed time and time again that the Ex-Im Bank makes loans only when no one else will. In doing so, supporters maintain, it doesn t compete with private lenders when using taxpayer money to subsidize foreign countries. In reality, Ex-Im loans billions of dollars to large corporations (often owned by foreign governments) that shouldn t have any problem procuring private financing. The following research identifies no less than 18 state-owned companies that have received billions of dollars from the Ex-Im Bank in recent years. Does Ex-Im contend that companies owned by China, Saudi Arabia and Russia can t get private loans? Or are these officials just trying to protect their jobs at a bank that has come to symbolize the worst of cronyism and corruption in Washington? The Export-Import Bank Characterizes Itself As A Lender Of Last Resort Ex-Im President Fred Hochberg: Ex-Im Bank Does Not Compete With Private Sector Lenders, But Rather Provides Financing For Transactions That Would Otherwise Not Take Place. We assume commercial, country, and liquidity risks that are reasonable and responsible, but currently beyond the still-recovering appetite of private lenders. Ex-Im Bank does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not take place because commercial lenders are either unable or unwilling to accept the political or commercial risk inherent in the deal. (Fred P. Hochberg, Chairman Hochberg's Statement To Senate Banking Committee On Ex-Im Bank s Oversight And Reauthorization, Export-Import Bank Of The United States, 1/28/14) Ex-Im Inspector General: Given Ex-Im Bank s Position As A Lender Of Last Resort, Its Authorizations Have Grown In Record Numbers To Support U.S. Exports As Private Lending Has Contracted Or Plateaued. ( Semiannual Report To Congress: October 1, 2012 To March 31, 2013, Export-Import Bank Office Of Inspector General, 3/13) U.S. Chamber Of Commerce And National Association Of Manufacturers: Without Ex-Im Bank Acting As A 'Lender Of Last Resort' To Fill Market Gaps, Many Foreign Customers May Turn To Non-U.S. Suppliers. The group, along with the U.S. Chamber of Commerce, the National Assn. of Manufacturers and eight other business trade associations wrote to congressional leaders last week urging them to move quickly to provide a long-term extension of the bank's charter. Without Ex-Im Bank acting as a 'lender of last resort' to fill market gaps, many foreign customers may turn to non-u.s. suppliers that already have significant support from their own official export credit agencies, the groups wrote. (Jim Puzzanghera, Export-Import Bank Supporters Relieved, Worried By 9-Month Extension, Los Angeles Times, 9/19/14)
But Do State-Owned Companies Have No Other Access To Capital Besides The U.S. Export-Import Bank? When Asked About An Ex-Im Loan To The State-Owned Industrial And Commercial Bank Of China, Hochberg Answered Merely That Countries Like China Are Both A Competitor Of The U.S. And A Customer Of The U.S. ( Examining The Export-Import Bank s Mandates, Committee On Oversight & Government Reform, 4/30/15) Representative Bill Huizenga: Why did the bank approve a $75.8 million loan to a subsidiary of the state-owned Industrial Commercial Bank of China when on April 23 at your annual conference you said, quote, It isn t easy going up against China, Russia, or anyone else to win export sales and the jobs that come with them. You stated, More and more, U.S. companies just aren t competing against their counterparts in China, Japan and elsewhere. They re forced to compete against China, Inc. Why are we helping? Ex-Im President Fred Hochberg: Sir, it s a complicated world out there. Countries like China are both a competitor of the U.S. and a customer of the U.S. Japan, Germany, Korea they re competitors and they re customers. So in some place we treat them as a competitor, and in other place we re selling them goods and services. China is the third largest destination after Canada/Mexico for U.S. exports, so we re not gonna end to that market. Ex-Im Routinely Subsidizes State-Owned Companies That Should Have Access To Alternative Funding Russia At Least $1.39 Billion Authorized: Ex-Im Has Authorized $1.2 Billion In Loan Guarantees To Russian State-Owned VEB Leasing For The Purchase Of Boeing Aircraft. ( Annual Report 2013, Export-Import Bank Of The United States, 2013; Annual Report 2014, Export-Import Bank Of The United States, 2014) Ex-Im Authorized A $497 Million Loan Guarantee In November 2012. ( Annual Report 2013, Export-Import Bank Of The United States, 2013) Ex-Im Authorized A $703 Million Loan Guarantee In January 2014. ( Annual Report 2014, Export-Import Bank Of The United States, 2014) VEB Leasing Is A Core Subsidiary Of Vnesheconombank (VEB), Which Owns A 98.96% Stake In The Company. ( Investor Presentation, Vnesheconombank, 10/14) Vnesheconombank Is A 100% State-Owned Entity With A Unique Legal Status Under Ad Hoc Federal Law. ( Investor Presentation, Vnesheconombank, 10/14) Ex-Im Authorized Nearly $165 Million In Subsidies To The State-Owned Rosselkhozbank (Russian Agricultural Bank) Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized More Than $29 Million In Subsidies To The Russian State-Owned Sberbank Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- China At Least $375 Million Authorized: Ex-Im Has Authorized More Than $245 Million In Subsidies To The Export-Import Bank Of China Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export-
Ex-Im Has Authorized More Than $126 Million In Subsidies To The State-Owned Industrial And Commercial Bank Of China Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized $522,215 In Subsidies To The State-Owned China Construction Bank Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export-Import Bank Of The United States, Accessed 5/18/15) Ex-Im Has Authorized More Than $2.78 Million In Subsidies To The State-Owned Bank Of China, Ltd. Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized $815,425 In Subsidies To The State-Owned China CITIC Bank Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export-Import Bank Of The United States, Accessed 5/18/15) Azerbaijan: In 2013, The Turkish Arm Of The State Oil Company Of The Azerbaijan Republic (SOCAR) Received A $640.7 Million Direct Loan From Ex-Im. The U.S. Export-Import Bank said Thursday that it's greenlighted a $640.7 million direct loan to the Turkish arm of the State Oil Co. of Azerbaijan Republic to finance the export of American-made oil refinery equipment that will be used to build a refinery on Turkey's western coast. (Keith Goldberg, Ex-Im Bank OKs $641M Loan For Turkey Oil Refinery Project, Law360, 12/6/2013) Morocco: SOCAR Funded All-Expenses-Paid Trip For 10 Members Of Congress And 32 Staff Members. The state-owned oil company of Azerbaijan secretly funded an allexpenses-paid trip to a conference at Baku on the Caspian Sea in 2013 for 10 members of Congress and 32 staff members, according to a confidential ethics report obtained by The Washington Post. Three former top aides to President Obama appeared as speakers at the conference. (Scott Higham, et al, 10 Members Of Congress Took Trip Secretly Funded By Foreign Government, The Washington Post, 5/13/15) SOCAR Allegedly Funneled $750,000 Through Nonprofit Corporations To Conceal Funding Source. The State Oil Company of the Azerbaijan Republic, known as SOCAR, allegedly funneled $750,000 through nonprofit corporations based in the United States to conceal the source of the funding for the conference in the former Soviet nation, according to the 70-page report by the Office of Congressional Ethics, an independent investigative arm of the House. (Scott Higham, et al, 10 Members Of Congress Took Trip Secretly Funded By Foreign Government, The Washington Post, 5/13/15) [T]he Most Extensive Investigation Undertaken By The Ethics Office The report reflects the most extensive investigation undertaken by the ethics office, which was created seven years ago in response to a number of scandals on Capitol Hill, including lobbyist Jack Abramoff s illegal funding of lawmakers trips. (Scott Higham, et al, 10 Members Of Congress Took Trip Secretly Funded By Foreign Government, The Washington Post, 5/13/15) In 2014, Ex-Im Provided Moroccan Government-Owned Mining Company OCP With More Than $92 Million In Subsidies. ( Annual Report 2014, Export-Import Bank Of The United States, 2014) OCP Has Been Accused Of Serious Human Rights Violations And Removing Resources Without Adequately Compensating The Impoverished People Who Live There. Former President Bill Clinton and the Clinton Foundation s Global
Saudi Arabia: Initiative are being hosted this week at a five-star luxury hotel in Morocco by one of the world s most controversial mining companies, criticized for serious human rights violations by the Robert F. Kennedy Center for Justice. The Moroccan governmentowned mining company OCP operates in disputed international territory in a remote part of the Sahara Desert, and the firm has been criticized for removing the resources without adequately compensating the impoverished people who live there. (Matthew Mosk, Brian Epstein, and Brian Ross, Clinton Foundation Event In Morocco Bankrolled By Controversial Mining Firm, Yahoo! News, 05/06/15) In 2012, Ex-Im Approved A Record-Breaking $4.975 Billion Direct Loan To A Joint Venture Developed In Part By The Saudi Arabian State-Owned Saudi Aramco. In its largest job-supporting authorization to date, the board of the Export-Import Bank of the United States (Ex-Im Bank) has approved a $4.975 billion direct loan to Sadara Chemical Company for the export of American goods and services required in the construction of a petrochemical complex in Jubail Industrial City II in the Kingdom of Saudi Arabia. Sadara Chemical Company, organized and existing under the laws of the Kingdom of Saudi Arabia, is a joint venture developed by the Saudi Arabian Oil Company (Saudi Aramco) and Dow. Saudi Aramco, wholly owned by the Saudi government and based in Dhahran, Saudi Arabia, manages the largest proven reserves of conventional crude oil in the world and the fourth largest gas reserves. ( Ex-Im Bank Approves Record-Breaking Transaction To Support More Than 18,000 Jobs, Export-Import Bank Of The United States, 9/27/12) Mexico: Mexico s State-Owned Pemex Is Ex-Im s Single Largest Obligor, Owing Nearly $5.6 Billion At The End Of FY 2014. ( Annual Report 2014, Export-Import Bank Of The United States, 2014) United Arab Emirates At Least $5.6 Billion Authorized: India: Ex-Im Has Authorized Nearly $1.3 Billion In Subsidies To Abu Dhabi State-Owned Etihad Airways Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized Nearly $3.7 Billion In Subsidies To Dubai State-Owned Emirates Airline Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized Nearly $118 Million In Subsidies To Dubai State-Owned Flydubai Airline Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Has Authorized More Than $556 Million In Subsidies To Joint Abu Dhabi And Dubai State-Owned Emirates Aluminum Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Authorized $180,000 In Subsidies To The Abu Dhabi Government s Tourism Development & Investment Company Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export- Ex-Im Authorized Nearly $1.6 Billion In Subsidies To State-Owned Air India Between FY 2007 And FY 2014. ( Authorizations From 10/01/2006 Thru 09/30/2014, Export-Import Bank Of The United States, Accessed 5/18/15)
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