Export-Import Bank Employees Flown Around The World By Corporations That Later Got LoansLink to Article: http://www.clubforgrowth.org/perm/pr/?postID=1059
Club for Growth President Chris Chocola: “It must be nice to fly around the world on trips sponsored by companies looking to feed at the public trough.”
Washington, DC – The Club for Growth pointed out today that in 2009, Exxon Mobil shelled out over $97,000 to shuttle four Export-Import Bank employees to “London, Tokyo, and the South Pacific” as it considered whether or not to fund a LNG project in Papua New Guinea. According to a Bloomberg News article at the time, Export-Import Bank employees “flew business class, viewed the project's route by chartered aircraft and were entertained by costumed villagers.” Less than a year later, the Export-Import Bank “approved $3 billion in financing for the liquefied natural gas facility, the biggest transaction in the agency's 75 years.”
“It must be nice to fly around the world on trips sponsored by companies looking to feed at the public trough,” said Club for Growth President Chris Chocola. “The Export-Import Bank gives loans to the most politically connected firms, distorting trade flows and acting as a corporate welfare slush fund for those who can afford the best lobbyists. It’s no wonder that even President Obama once called the Export-Import Bank ‘corporate welfare’ and why members of Congress are starting to wake up to this taxpayer-backed ticking time bomb.”
Exxon Gets Export Bank Funding After Paying for Trip
By Mark Drajem - March 25, 2010 18:00 EDT
March 25 (Bloomberg) -- Exxon Mobil Corp. and its partners in a $15 billion Papua New Guinea gas project last year paid the travel expenses for employees of the U.S. Export-Import Bank as it considered whether to help fund the venture.
The four workers ran up $97,367 in bills traveling to London, Tokyo and the South Pacific, according to data compiled by the bank. They flew business class, viewed the project’s route by chartered aircraft and were entertained by costumed villagers. Eleven months later, the bank approved $3 billion in financing for the liquefied natural gas facility, the biggest transaction in the agency’s 75 years.
Exxon Mobil, the biggest U.S. oil producer, isn’t alone in picking up the travel tab for the Washington-based bank. In the past two years, the bank accepted $366,865 for employee trips, according to information provided under a Freedom of Information Act request. Workers visited projects sponsored by companies including Newmont Mining Corp., ConocoPhillips, Saudi Aramco and Barrick Gold Corp.
Such travel should be banned because the money may influence the bank’s decisions on billions of dollars in financing, said Craig Holman, a legislative representative at Public Citizen, an advocacy group based in Washington.
‘Standard Industry Practice’
“This is probably standard operating procedure, but it’s clearly an ethics violation,” Holman, whose organization monitors spending by lawmakers and government officials, said in an interview. “It’s clearly a conflict of interest.”
Margaret Ross, a spokeswoman for Irving, Texas-based Exxon, referred questions to Miles J. Shaw, a spokesman for the venture. Shaw, who is based in Port Moresby, said in an e-mail that Exxon and partners hosted the Export-Import Bank employees, and said it’s “normal practice.”
The U.S. Export-Import Bank, which provides financing to expand U.S. trade, has let employees take company-paid research trips since at least 1993, following “standard industry practice” for lenders, Phil Cogan, a vice president of the bank, said in an interview. Corporate-funded trips are permitted only for examining overseas projects such as power plants, not for U.S. exporters such as aircraft maker Boeing Co., he said.
All trips are reviewed by an agency ethics officer and must follow federal travel restrictions, Cogan said. Payments go to the bank, not the employees, and if companies such as Exxon didn’t pay, taxpayers would have to, he said.
The bank’s policy isn’t shared by government agencies such as the Food and Drug Administration and the Federal Aviation Administration, which prohibit staff travel paid by companies with business pending before them.
The Consumer Product Safety Commission barred such travels after criticism in 2007 that its chairmen’s trips to conferences were paid for by makers of toys and appliances it regulates.
The Export-Import Bank provides government-backed loans or guarantees to banks offering credit to exporters. As private credit dried up in the recession, the bank’s support to U.S. companies grew 50 percent, to $21 billion, in the 12 months ended Sept. 30 from the previous fiscal year.
The Papua New Guinea project will supply fuel to China, Japan and Taiwan, according to Exxon. The venture calls for a 430-mile (692-kilometer) pipeline that would cut through tropical forests and run undersea, and a liquefaction plant near the capital of Port Moresby.
“Without the funding from Ex-Im and others, this project would not have gone forward,” Steve Kane, senior finance manager for the project, told an Export-Import Bank conference on March 11.
Exxon owns 33.2 percent of the venture. Oil Search Ltd. of Port Moresby has 29 percent, Santos Ltd. of Adelaide, Australia, 13.5 percent, and Tokyo-based Nippon Oil Corp. 4.7 percent. Also among those with stakes in the project are an agency of the Papua New Guinea government and local landowners.
The development will triple Papua New Guinea’s exports and double its gross domestic product, Oil Search, that country’s biggest oil producer, says on its Web site. The nation of 6.2 million, whose people speak more than 800 languages, has an $8.2 billion economy, according to the World Bank.
An account of a six-day trip to Australia and Papua New Guinea in January 2009 by Export-Import Bank workers, with photos they took of the costumed dancers, was posted on the bank’s Web site.
Most U.S. government agencies follow guidelines, set by the General Services Administration, that prohibit corporate- sponsored travel if the circumstances “would cause a reasonable person with knowledge of all the facts relevant to a particular case to question the integrity of agency programs or operations.”
The Export-Import Bank “essentially mimics” the GSA guidelines, Cogan said. The bank’s regulations say corporate- funded travel is allowed when the bank’s interest in having employees attend such meetings “outweighs concern” about the appearance of conflicts of interest.
The Consumer Product Safety Commission was criticized by lawmakers such as Representative Ed Markey, a Massachusetts Democrat, in 2007 because chairmen during the Bush administration went to 30 conferences paid by industries regulated by the agency. CPSC employees can no longer accept industry-funded trips, spokesman Scott Wolfson said in an e- mail.
The Overseas Private Investment Corporation, a government entity that funds overseas projects as does the Export-Import Bank, charges companies a processing fee for applications and uses some of that money to pay for staff travel, spokesman Tim Harwood said.
Saudi Aramco and Houston-based ConocoPhillips paid more than $30,000 to fly bank staff members to London and Seoul to investigate whether the U.S. lender would finance expansion of the Saudi Arabian Yanbu refinery, the bank’s data show. The project is seeking to borrow $7.7 billion. John Roper, a ConocoPhillips spokesman, declined to comment.
Toronto-based Barrick Gold spent $4,608 on Export-Import Bank employee travel, according to the data. Vince Borg, a company spokesman, said the practice was “typical in the business.”
An Indonesian joint venture involving Greenwood Village, Colorado-based Newmont Mining paid $14,000 for a staff member’s trip last April. The Export-Import Bank official was monitoring an investment it made in the Batu Hijau copper mine, company spokesman Omar Jabara said in an e-mail.
Doug Norlen, policy director for Pacific Environment, a San Francisco-based group fighting the Exxon project, said the company-sponsored travel “shatters the illusion of independent due diligence.”
“It’s disturbing to hear the bank doesn’t think it’s a problem for employees to be flown out and wined and dined by the company they are scrutinizing,” Norlen said in an interview.
To contact the reporter on this story: Mark Drajem in Washington at firstname.lastname@example.org.