Transparency is not the strong point of the Export-Import Bank of the United States. The subsidy agency doesn’t have the details of its most recent board meetings online — it only has the agendas, which list some of the deals the board considered, but doesn’t name the exporters, the guaranteed lenders, or dollar amounts.
We do have the minutes from the Sept. 4 board meeting, though, and so as a public service, I’ll lay out some details about what exports you, the taxpayer, are backing through loans and guarantees:
State-owned Air China buys Boeing jets, taxpayers guarantee the loan
Air China is buying some unstated quantity of Boeing jets. The Private Export Finance Corporation is providing the loan. PEFCO is basically an official lender for Ex-Im-guaranteed loans. It’s a twelve-year loan.
Subsidizing a loan to a Chinese state-owned airline cuts against U.S. stated policy goals in a few ways.
First, Air China flies internationally, thus competing against U.S. carriers. So, this subsidy hurts U.S. airlines that fly internationally. Subsidizing Air China also hurts the private airlines in China, thus steering the country away from having a market economy.
Also, Chinese corporate welfare is one of the prime excuses given for Ex-Im. Yet, Ex-Im, we see with this deal, subsidizes the Chinese government.
Subsidizing Vietnam’s subsidy of a wind farm
Ex-Im’s board approved a deal with more than $20 million in U.S. taxpayer exposure to subsidize the Vietnamese government’s wind-farm program. The exporter is General Electric. The borrower is the Vietnam Development Bank.
The VDB is a state-owned subsidy agency — again, the sort of thing that Ex-Im is supposed to counter, but instead regularly subsidizes.
Moroccan state-owned mining company and Citibank get subsidy
OCP is Morocco’s state-owned phosphate-mining company. Citibank is a major U.S. bank. Holtec and Westech are two major U.S. equipment makers. You might think that the Kingdom of Morocco, a megabank, and two big manufacturers could figure out the financing of mining equipment without the aid of Uncle Sam.
But no, the U.S. taxpayers are guaranteeing this $92 million loan from Citi to the Moroccan state-owned company.
