Tuesday, April 29, 2003

So Bush has nominated April Foley, a "homemaker" who happens to be his ex-girlfriend, to the Export-Import Bank board. Just an obscure appointment to keep her quiet? Not exactly -- Leslie Wayne explained what the bank does in the 9/1/02 Times
At a time when the Bush administration says it wants to cut back on corporate welfare, the Export-Import bank, often called a "reverse Robin Hood" for taking money from American taxpayers and giving it to wealthy corporations, is growing. In June, while the public was focused on corporate scandals, President Bush quietly signed legislation to double the scope of the bank's operations and allow it to provide up to $100 billion in international trade assistance at any one time.

Even before this increase, Export-Import was already by far the largest federal agency providing international credit aid, outpacing international food and disaster aid programs. The bank has long expanded beyond its initial mission of aiding American exporters when times were tough. And a growing chorus of critics -- from free traders on the right to trade unionists on the left -- say the bank has become a tool for an elite group of politically well-connected corporations to get sweetheart deals and cheap financing courtesy of American taxpayers.

"We already regard Ex-Im as the poster boy for the anti-corporate-welfare movement," said Stephen Moore, an analyst at the Cato Institute, a Washington research group that promotes free trade. "It's a huge amount of money that goes to the wealthiest corporations. There is no rationale for the government to be involved in this."

In fact, Export-Import policies in recent years have had the perverse effect of sending American jobs, rather than goods and services, overseas. There was, for example, the case of a Chinese steel mill, the Benxi Iron and Steel Group, that received an $18 million Export-Import backed loan in December 2000 to buy American-made equipment only to be found a year later to be dumping steel into American markets and slapped with a 90 percent antidumping tariff. In that year, steel companies in the United States laid off 30,000 workers and more than 20 of the companies filed for bankruptcy.

MORE fundamentally, there are questions about why the bank exists at all. Less than 1 percent of all American exports receive Export-Import financing, which comes in the form of direct loans, loan guarantees or export credit insurance. The bulk of Export-Import's benefits go to a small number of large companies that are sophisticated enough to get financing on their own: Boeing, Halliburton, General Electric, Northrop Grumman, Lucent Technologies, ChevronTexaco, Caterpillar and Dell Computer, among others....

When Mr. Bush took office, his administration called for a 25 percent cut in the bank's budget as part of an effort "to reduce subsidies that primarily benefit corporations rather than individuals," according to a White House statement on the 2002 budget. But Mr. Bush has now endorsed a five-year expansion plan that will increase the total value of the loans the bank can guarantee to $100 billion from the $56 billion currently outstanding.

The increase breezed through Congress. When the Bush administration first tried to cut the program, 31 senators, including top Republicans, sent a letter to the president opposing his action. The legislation to expand Export-Import's reach passed the House, on a vote of 344 to 78, and was approved by unanimous consent in the Senate.

"We said to Congress, 'This is what we need,' " said Eduardo Aguirre, a former Bank of America executive in Texas and the bank's vice chairman. "And they said 'O.K.' "

Facing political reality, Mr. Bush has joined the chorus singing the bank's praises. An administration spokesman said a new policy, allowing the bank to guarantee more loans against fewer reserves, and thus requiring less government money while increasing risk, had earned it points in the White House.

During a meeting in May with President Vladimir V. Putin of Russia, Mr. Bush actually promoted the bank as the way to finance a $2.9 billion Caspian Sea pipeline that the two leaders favor. While nothing official has been announced, the companies involved in this project are BP, Exxon Mobil and ChevronTexaco.

Some strange bedfellows here.

Did one of the -- Bin Laden-financed -- usual suspects seem conspicuously absent from the list? never fear, CorpWatch is here:

Daniel Chao, another Bechtel senior vice president, serves on advisory board of the US Export-Import Bank, while Ross J. Connelly, a 21-year veteran of Bechtel Group, is the chief operating officer for the Overseas Private Investment Corporation (OPIC).
Bechtel's best buddies have generally been Republicans but they never let party affiliations get in the way of business. For example the company contributed heavily to the Democratic Party right at the time that U.S. Commerce Secretary Mickey Kantor invited them to join him on a trade mission to Bosnia and Croatia in July 1996. Between May 3rd and August 23rd of that year the company suddenly gave the Democrats $125,000, more than they had given the party in the past five years combined. Questioned about the donations. Kantor, a long-term lobbyist himself, said he was "stunned" insisting that the trips and the contributions were entirely unrelated.

But two years later the U.S. Export-Import Bank (ExIm), on whose board Kantor served as an ex-officio member, approved a long-term financial guarantee for Bechtel to provide $250 million of procurement, construction and project management services to build a 72- mile highway from Croatia's northern border through Zagreb to the Bosnia-Herzegovina border. In a press release at the time the ExIm Bank said the guarantee enabled Bechtel to win the Croatia Roads Authority contract over several European and local competitors. Bechtel says, however, that there is no connection between the Democratic campaign contributions and the contracts.

ExIm has long been an easy touch when Bechtel needs financing. Bechtel asked the 65-year old agency for funding in 1946 when it got the contract to build the Trans-Arabian pipeline, laying one of the cornerstones for the Saudia Arabian oil export boom. ExIm also backed Bechtel's aborted role in the Aqaba pipeline in Iraq in the 1980's.

Two of ExIm's presidents have worked for Bechtel after quitting the bank. Henry Kearns, who was appointed to head up ExIm by Richard Nixon in 1969, asked Steve Bechtel Senior to serve on the bank's advisory committee. Kearns played a crucial role in helping Bechtel find funding for the Freeport gold mine in New Guinea when it was constructed in 1970, overriding misgivings from ExIm's engineering department about the feasibility of the project.

Kearns suddenly resigned from his job in 1973 when the U.S. Department of Justice launched an inquiry into possible conflicts of interest because Kearns had financial interests in a Thai company that had received loans from ExIm. Although the investigation was later dropped, Kearns did not have to worry about losing his federal salary because he landed softly into a job in Bechtel's San Francisco offices.

more Bechtel bedfellows, from the Globe.

Foley, by the way, is a cipher, at least as far as the internet is concerned.

[Bin Laden link via Tapped].


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