- Post 13 April 2012
- By Copy Editor
Matt Cover | (CNSNews.com) – Three corporations together received 44 percent of the Export-Import Bank’s $32.7 billion in assistance in 2011 – a total of $13.5 billion in federal financial aid. The three were Boeing, General Electric and international engineering firm Black and Veatch International.
Boeing alone received 38 percent of the bank’s financial assistance, or $12.4 billion ($11.7 billion for the mother company and another $700 million for its Boeing Satellite Systems subsidiary.)
General Electric received $1.2 billion while Black and Veatch received $805 million, according to the bank’s 2011 annual report.
The Export-Import Bank, whose authorization runs out in seven weeks' time, is opposed by some conservatives who argue that it provides corporate welfare and below-market financing.
The bank does not give money directly to U.S. exporters, instead issuing loans or loan guarantees to their overseas customers. Those customers in return agree to buy products from certain U.S. exporters.
Boeing, the country’s largest exporter, topped the list of Export-Import Bank loans and loan guarantee contracts in 2011, getting a total of 41 of the 115 loans and long-term guarantees.
Apart from the Boeing Satellite Systems contract, all were used to finance the sale of aircraft to various countries, including China, India, and Kuwait.
General Electric and its subsidiaries, GE Packaged Power Inc. and GE Transportation Systems, benefitted from a total of eight loan or long-term guarantee contracts. GE received $1.1 billion in assistance while GE Packaged Power received $38 million and GE Transportation Systems received $119 million.
Black and Veatch International received one of the largest contracts, receiving $800 million from one Export-Import Bank loan for engineering services in South Africa.
The single largest project financed in 2011 was a $2.84 billion package for an oil refinery in Cartagena, Colombia. That project – first reported by CNSNews.com in April 2011 – is the second largest ever financed by the Export-Import Bank.
Funding for the Colombian oil refinery, most of which took the form of a $2.3 billion loan, went to international energy construction firm CBI Americas Ltd. as well as other U.S. exporters including ExxonMobil.
The Export-Import Bank faces two crises in the coming months. Firstly, its congressional authorization expires on May 31. Unless reauthorized it will not be able to make any more loans or loan guarantees and will have to shut down.
Secondly, analysts say the bank is fast approaching its $100 billion portfolio limit. If that happens, it will continue to exist but be unable to make further financial commitments.
The White House, Senate Democrats and some Republicans support giving the bank a four-year extension and raising its portfolio limit to $140 billion. House Majority Leader Eric Cantor (R-Va.) and House Republicans support only a one-year extension and a $113 billion limit.
Some conservative groups oppose the bank, citing its past support for corrupt energy firm Enron and failed green energy company Solyndra.
“President Obama has a laudable goal of doubling exports within five years, but he shouldn’t be allowed to goose the numbers by handing out market-distorting tax dollars to companies that curry the most favor or have the best lobbyists,” the Club for Growth said in a January alert.
“Not only should members of Congress reject this expansion of authority, but they should reject the Bank’s charter and shut it down for good,” it said.