The Recipients of the Ex-Im Bank Largesse

In 2013 the Ex-Im Bank authorized $6.9 billion in direct loans, the three largest loans totaled $3.9 billion, or 55% of the total loans made.

The largest loan was $1.9 billion to BG Energy for the Queensland Curtis Liquified Natural Gas (LNG) plant. The Queensland plant is in Australia and will liquify natural gas from Australia and export that gas to China, Japan, Chile and Singapore. BG Energy is part of BG Group and in 2013 generated operating profit of $7.6 billion. BG is a global enterprise including its ownership of the Queensland Curtis Liquified Natural Gas plant. Bechtel Power is supplying engineering services to BG Energy for the Queensland plant. According to the Bechtel website it is "the world's No. 1 choice for engineering, construction, and project management." In 2012 Bechtel had revenues of $37.9 billion.

The New York Times worried today that if the Ex-Im Banks is shuttered, "American companies could lose billions of dollars in overseas orders and decide to move their operations to other countries that provide generous export financing." Is the Times really arguing Bechtel, "the world's No. 1 choice for engineering, construction, and project management" is in danger of moving even more of their operations overseas? Most of Bechtel's projects are overseas already, employing workers overseas.

The second largest loan is $1 billion to Reliance Industries for turbine generator sets for the Jamnagar Petrochemical Plant. It just happens that Bechtel is providing engineering and technical services for the project, but this loan will be used to purchase the generators from "Fluor, Conoco Philips, et. al." Fluor is a large engineering and construction firm and Conoco is one of the world's largest oil companies. Reliance is a large Indian company and according to their web site accounts for 6.9% of India's indirect tax revenue. It has the highest debt rating available and is India's largest private sector employer. In its latest fiscal year revenue was over $68 billion and net profit almost $3.9 billion.

The New York Times criticizes those who want to shut down the bank "as a symbol of corporate welfare," when in fact "a truly serious crackdown on corporate welfare would involve eliminating corporate tax breaks and wasteful subsidies." Is the Times arguing subsidizing Reliance, Fluor, Conoco, BG Group and Bechtel really not an egregious example of corporate welfare?

The third largest loan was to Global Foundries to build a semiconductor plant in Germany. Applied Materials will be supplying the equipment. Global Foundries is based in Silicon Valley but the equipment from Applied Materials will be installed in Germany. Applied Materials generates over $8 billion in sales and is one of the world's leading providers of semiconductor equipment.

The supporters of the bank paint the picture that businesses would fail and exports collapse without its support. Instead, the more realistic portrayal is large, well financed companies are using the US taxpayer to subsidize their operations. I can understand why Big Business loves the Ex-Im Bank. I can't understand why the Times and Democrats do as well.

Posted with Blogsy