Thursday, April 30, 2015

The Pride of Ohio 8 doubles down to please his House Democrat base which unanimously supports corporate welfare via Export-Import Bank. Boehner would even add $20 billion to ExIm crony free for all


"Thousands of jobs would "disappear pretty quickly" if the Export-Import Bank were to expire abruptly when its charter runs out at the end of June, House Speaker John Boehner said on Thursday.

The Ohio Republican has asked Financial Services Chairman Jeb Hensarling, R-Texas, to come up with a plan to overhaul or wind down the operations of the bank, which helps finance exports of U.S. products such as jetliners and wind turbines [and coal].

"There are thousands of jobs on the line that would disappear pretty quickly if the Ex-Im Bank were to disappear. So I told the chairman he needs to come up with a plan," Boehner told reporters. "Because the risk is that if he does nothing, the Senate is likely to act. And then what?"

Boehner's unwillingness to let the bank's operations abruptly end is at odds with deputies such as Majority Leader Kevin McCarthy, R-Calif., who said Tuesday that he supports letting the bank's charter expire.

Many conservative Republicans want to kill the bank outright, saying it finances too many questionable projects and favors some businesses over others. But the bank enjoys sweeping support among Democrats, and other GOP lawmakers support business groups who say it sustains U.S. jobs.

Boehner said he'll support any plan Hensarling can advance through his divided panel. But the Texas Republican, who is a sharp critic of the bank, appears at odds with a host of the bank's GOP supporters that populate his committee.

In the Senate, Majority Leader Mitch McConnell, R-Ky., opposes renewing the bank's charter. But he's signaled he'll allow an up-or-down vote that would likely go the bank's way.

Boehner's comments raised the possibility that he would allow the House to vote on a Senate bill if Hensarling's committee failed pass a plan to change the bank's operations or wind it down." via Free Rep.


More on Ex-Im Bank corporate welfare:

JP Morgan says the Ex-Im bank is “free money:”

3/15/15, "On Ex-Im Bank, the Democrats Are the Real Corporate Shills," The Daily Beast,

"Its primary activity is to extend cheap loan guarantees and direct loans to foreign companies to buy U.S goods under the pretense of boosting exports and creating jobs.

Don’t buy it. Economists have shown that these kinds of export credit subsidies will never raise the overall level of trade. The subsidies are also hurtful (PDF) since they simply redistribute wealth away from unsubsidized American firms, employees, and consumers and direct it toward a tiny number of beneficiaries....

When it comes to being pro-big business, conventional wisdom says the Republicans are most likely to distribute the goods. It’s a valid criticism. Republicans are indeed big supporters of business interests. But these days, they are second to the Democrats. Case in point: The congressional Democrats’ recent and unanimous support for the Export-Import Bank. A bill recently introduced by Democrats would reauthorize the bank’s charter for seven years and expand its lending ability by $20 billion....
The bank’s data show that it overwhelmingly benefits some of the biggest, most politically connected firms in America. In fact, in 2013, 64 percent of the bank’s activities benefited 10 companies, such as Boeing, General Electric, and Caterpillar. And these companies’ customers aren’t poor either. For instance, the bank subsidizes wealthy foreign borrowers—like mining heiress Gina Rinehart, owner of the Ex-Im-financed Roy Hill Iron Ore Mine and Australia’s richest woman. She could easily find private capital without government privileges. It also subsidizes numerous state-owned companies in wealthy countries like Saudi Arabia and fast-growing airlines (PDF) like Lion Air and Air Emirates.

Maybe more interesting is the fact that the biggest beneficiary on the foreign buyer side is a company named Pemex. It is a super gigantic Mexican state-owned petroleum company with a market capitalization of $416 billion. And yet it has benefited from $7 billion in U.S.-taxpayer-backed financing since 2007. I wonder how Democrats reconcile that handout with their well-known anti-fossil fuels stance....
But the biggest beneficiaries of all are probably the lenders who earn interest on loans whose risk is borne by American taxpayers. No one explained it better than a JP Morgan banker (whose firm just happens to be the biggest private lender that benefits from Ex-Im), when he said that the bank is “free money”—that is, for the firms who know the right people."...
Ex-Im Bank officials are appointed by the White House:
1/9/2009, "PEBO (Pres. Elect B. Obama) to Name Fred Hochberg to Head Export-Import Bank," ABC News, Huma Khan
6/6/13, "Senate panel backs Hochberg for second term at Ex-Im Bank," Reuters
Export Import Bank Chairman and Board of Directors are Obama appointees.

Ex-Im Bank fossil fuel financing reached a peak of $9.6 billion in 2012 fiscal year.
7/3/14, "U.S. Ex-Im Bank weighs loan to major India coal project," Reuters, by Valerie Volcovici

"The U.S. Export-Import Bank is considering financing a massive coal-fired power plant in India
despite the fact the Obama administration has called on domestic and global public lenders to stop funding coal-plants in his climate change strategy.

The board of the Ex-Im Bank, the United States' export credit agency, voted last December to stop funding coal plants overseas - except in certain circumstances - in response to President Barack Obama's Climate Action Plan, which called on U.S. and international lenders to do so.

"We are currently reviewing the application, which we received last month, to determine if it satisfies our criteria of 'reasonable assurance of repayment' and to ensure that it adheres to our environmental and other policies," an Ex-Im official said....
Democratic Senator Joe Manchin from coal state West Virginia plans to offer compromise legislation to renew the bank's charter by five years on the condition that it permanently removes the restrictions on lending to coal projects.

The Ex-Im Bank in January temporarily suspended enforcement of a lending ban to high-carbon intensity projects until September due to a provision of a House appropriations bill that defied the president's climate action plan.

This opened the window for the India project to apply for an Ex-Im loan guarantee.

The coal project being reviewed by the bank
is a 4,000 MW integrated power plant and coal mines located in India's Jharkand state in northeastern India.

It had initially been proposed by India's government as part of a strategy to add an additional 100,000 megawatts of generation capacity by 2017. Residents surrounding the coal mining and power project have protested against it.

The supercritical plant, which uses more efficient boilers than traditional coal-fired power plants, is owned by Reliance Power (RPOL.NS), Tata Power (TTPW.NS) and coal mining company NTPC.

The Ex-Im Bank does not disclose which U.S. vendors have applied for the loan until the loan is approved.

In 2010, the bank agreed to $900 million in loan guarantees from Reliance Power (RPOL.NS) to buy mining equipment from Wisconsin-based Bucyrus, now owned by Caterpillar (CAT.N) to build a power plant in central India."...
Fossil fuel financing has flourished under Obama:
Jan. 14, 2014, "U.S. spending bill aims to dilute curbs on overseas coal financing," Reuters, Valerie Volcovici

"The Ex-Im Bank's fossil fuel financing reached a peak of $9.6 billion in the 2012 fiscal year, according to environmental group Pacific Environment."...
Export Import Bank Chairman Hochberg is an Obama appointee. Judge Contreras who ruled in this case is also an Obama appointee:
1/23/2015, "Greens Can't Sue ExIm Bank for Coal Loan," Rebekah Kearn,

"The U.S. Export-Import Bank need not face claims that a $90 million loan guarantee to a coal company will damage the environment and threaten public health, a federal judge ruled Wednesday.

     Chesapeake Climate Action Network, the Center for International Environmental Law and four other environmental groups sued in July 2013 , claiming that the bank and its Chairman Fred P. Hochberg authorized a 3-year, $100 million loan to Xcoal Energy and Resources from PNC Bank without conducting environmental analysis required under the National Environmental Policy Act.

     The loan enabled Xcoal to mine $1 billion worth of coal from mines in Appalachia, transport it by rail to ports in Baltimore and Hampton Roads, Va., and sell it to overseas customers.

     The plaintiffs claimed that the loan deal would pollute the air and water with toxic coal dust, aggravating respiratory conditions such as bronchitis and asthma, and that toxic metals in coal dust from the mines would increase people's risk of cancer and kidney damage.

     They also claimed that small dust particles contribute to haze, alter the nutrient balance in water bodies, and diminish ecological diversity.

     In response, ExIm Bank claimed the plaintiffs lacked standing and that it was not necessary to conduct a NEPA-compliant environmental study for a loan guarantee.
On Wednesday, District of Columbia Federal Judge Rudolph Contreras agreed with the ExIm Bank, and found that the plaintiffs lacked standing to challenge the loan guarantee.

     To establish standing in cases alleging violation of procedural rights, such as NEPA lawsuits, the plaintiff must demonstrate a specific rather than general interest in the matter, show that the government's failure to conform to the procedure at issue will harm the plaintiff's interests, that the government's failure to act is the cause of the plaintiff's alleged injuries, and that the court can provide actual rather than speculative relief, the ruling states.

     The defendants acknowledged that members of the four environmental groups suing on behalf of their members would likely be harmed by pollution from coal exportation, but argued that the groups lacked standing because they did not prove that the loan would cause Xcoal to export more coal or that vacating the guarantee would force Xcoal to export less coal.

     In rebuttal, the groups asserted that ExIm's loan enabled Xcoal to export more coal than it could without the guarantee, and that canceling the guarantee until the bank completes NEPA analysis would force Xcoal to decrease coal exports and thus reduce pollution.

     Contreras was not persuaded. He found that the administrative record and declarations from the parties demonstrate no link between ExIm Bank's authorization of the loan guarantee and the amount of Xcoal's coal exports.

     Though the groups' members believed NEPA compliance could better protect them from the effects of coal pollution, their "hopes or beliefs than an order rescinding the guarantee would redress their injuries, however genuine, do not constitute 'specific facts' showing redressability," Contreras wrote.

     In contrast, the defendants supported their position with specific facts, such as Xcoal's using other lines of credit to boost its coal exports, to prove that rescinding the guarantee will accomplish little to protect the plaintiffs' members from pollution, the ruling states.

     "The proposition that Xcoal would export less coal if the court orders the bank to rescind its guarantee is, at best, entirely conjectural in light of the availability of alternative funds and Xcoal's stated commitment to exporting the same volume of coal regardless of whether the loan guarantee is rescinded," Contreras wrote.

     Since the four groups cannot refute the defendants' assertions that the European banking crises is easing up and that Xcoal is using only 30 percent of its available $535 million in credit, they lack standing for failure to establish redressabillity, Contreras added.

     The Center for International Environmental Law's and Pacific Environment's claims for organizational standing based on suffering "injuries to their organizations' missions, activities, and resources" due to ExIm's guarantee also failed to impress the court because neither could not show that they suffered actual harm.

     Both groups contended that the guarantee interferes with their express missions
to protect the environment, and forced them to expend resources on environmental advocacy and public education, but neither could back up those claims with specific facts or explain how allocating additional funds for advocacy differed from their typical program activities and costs, according to the ruling.

     An action that merely frustrates an organization's goals is not enough to prove actual injury, and without proof of such injury, the plaintiffs thus lack standing, Contreras wrote.

     The court granted the defendants' motion for summary judgment and denied as moot the plaintiffs' motion to include extra-record evidence.

     The plaintiffs were Chesapeake Climate Action Network, the Center for International Environmental Law, Friends of the Earth, the Sierra Club, the West Virginia Highlands Conservancy, and Pacific Environment."

Daily Kos says, Ex-Im Bank Pres. "Hochberg has a long history of supporting controversial coal projects backed by unscrupulous companies." Hochberg only carries out Obama's wishes:

5/6/13, "U.S. Export-Import Bank Shady Coal Scheme in Mongolia," Daily Kos, nicoleghio

"Once again, U.S. Export-Import Bank (Exim) Chairman Fred Hochberg is using our taxpayer dollars to finance a dangerous fossil fuel project. This time it’s Rio Tinto’s Oyu Tolgoi gold and copper mine and the associated coal-fired power plant in Mongolia. What’s even more galling is that Hochberg and the Exim board of directors approved the project in April despite what amounted to a vote of no confidence in the very same project by the U.S. Treasury, which abstained from a decision on funding from World Bank Group’s International Financial Corporation (IFC).

When explaining their abstention, Treasury officials stated, "The ESIA does not provide a sufficiently detailed analysis of associated facilities and cumulative impacts, notably concerning a coal-fired power plant that will likely be needed to provide reliable power for the project." Clearly these were trivial matters for Mr. Hochberg and Exim that should not come between them and a new destructive coal plant.

The sad part is we now know that the situation is much worse. At the time of the World Bank vote, Rio Tinto was telling officials that a final decision had not been made on whether or not they would construct a coal-fired power plant. But in Mongolia, they were already making preparations on the ground for the plant. In other words, Rio Tinto was lying in order to get funding from the IFC and the U.S. Government -- and it worked because neither the World Bank nor Exim did the necessary due diligence to check Rio Tinto’s claims. Did I mention this is your tax payer dollars at work?

Our partners at Accountability Counsel did check, and it wasn’t that hard. They traveled to Mongolia and took a tour of the mine with a Rio Tinto official. Not only did he tell Accountability Counsel that he had not heard any talk of reconsidering the decision to build the coal-fired power plant, he pointed out where the worker housing was already under construction. It is the white line in the distance of this photo provided by Accountability Counsel.

Of course, Hochberg has a long history of supporting controversial coal projects backed by unscrupulous companies, so we’re hardly be surprised. But we can’t let him, or the US Government off the hook for decisions like these. It’s clear that abstention votes are not enough. Going forward Exim and Treasury must vote “no” on fossil fuel projects, especially dirty coal projects. It’s way past time for the World Bank and the U.S. Export-Import Bank to get out of the coal business."
-- Nicole Ghio, Sierra Club's International Campaign
Sierra Club says Export-Import Bank destroying Great Barrier Reef:

9/28/2012, "US Ex-Im Bank President Fred Hochberg Underwriting Destruction of The Great Barrier Reef, Again?"

"The US Export-Import Bank (Ex-Im), and its president Fred Hochberg, have never met a coal project they don’t like. At times it’s so bad we don’t know what century the institution thinks it is operating in. Now despite a worldwide uproar over their interest in one of the world’s largest coal ‘mega-mines’ in Australia they have been linked to another Australian mega mine ( Underwriting the havoc this would wreak on the Great Barrier Reef is an unacceptable use of US tax payer dollars and it’s time Ex-Im Bank came clean on its involvement. 
It’s not surprising to hear over-eager developers link the Ex-Im Bank to these projects because the institution has a long history of supporting fossil fuel projectsand that track record is getting worse. It got so bad that the Sierra Club wrote an open letter to President Fred Hochberg because we have witnessed first hand the destruction these projects are wreaking on communities and livelihoods (check out our blog on the Sasan coal project in India).

But our pleas were callously ignored as President Hochberg ok’d a massive expansion of coal finance in every corner of the globe. From Kusile in South Africa, to Sasan in India, to Xcoal in the US, to these proposed mines in Australia, it appears that Ex-Im Bank cares little for the damage the institution is causing to communities around the world not to mention the reputation of this administration.

The problem however is that the public does. And that public stretches from Australia where the mining would take place, to India where the coal would be burned, to the US where the financing would come from. This global outcry was captured in part by Avaaz’s petition to #savethereef (consider taking a minute to tell Fred Hochberg personally via twitter: @fredhochberg), but also by media scrutiny in India, the US, the UK, and Australia. It appears that while President Hochberg may consider designations like ‘World Heritage Site’ pesky obstacles, the global public considers them treasures.

Which is why Greenpeace Australia’s recent report on massive coal export expansion plans that would trample the Great Barrier Reef, and the global climate, was so damning. They found that if underwritten by institutions like Ex-Im Bank the world would add emissions the size of the country of Canada while increasing traffic through one of the world’s greatest natural wonders. For an excellent visual representation of this lunacy check out Greenpeace’s short video:....
So how did President Hochberg react? By quietly talking with another Indian company to finance another mega mine - this time with Adani group, whose record of violations (PDF) would give most institutions pause. Not Ex-Im though. After all, it makes sense that being linked to a scandal plagued Indian coal sector beset by ‘coal-gate’ investigations would be of little consequence if you are willing to finance the destruction of a global treasure like the reef.

But at the end of the day these may be over eager developers looking to increase the perception in the financial community that their projects have legs. The truth is with prices at near 2 year lows the Australian mining community is understandably worried that these projects are no longer viable. That is why the vociferous claims from Adani and GVK may be making their way into the press at this opportune moment.

But if that’s true, it’s easy enough for President Hochberg to condemn these public statements, and publicly dissociate the bank from this scandal. Instead he has been silent which leaves a huge question mark over US involvement. But let’s not put words in anyone’s mouth. Let’s let President Hochberg speak for himself.

So Mr. Hochberg, where do you stand? The world is waiting for your answer."

- "Justin Guay, Sierra Club International Program"


Comment: The "answer" to "the world" was Obama re-appointed Hochberg in 2013 to a second four year term.

65.4% of Ex-Im loan guarantees over past 17 yrs. have gone to Boeing:

8/27/14, "65.4% of Loan Guarantees Made by U.S. Government Bank Benefited Boeing," CNS News, Ali Meyer

"In the seventeen-year span from 1997 through 2013, the Export-Import Bank of the United States, which is an agency of the federal government, provided 65.4 percent of its loan guarantees to foreign organizations so they could buy products from Boeing,
according to the bank’s annual reports. The Ex-Im Bank has posted its annual reports going back to 1997 on its official website."... 



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