Another sign of the blatant cronyism involving the Export-Import Bank emerged this week.
First Solar, a solar panel manufacturer, is by most standards a failing company. It suffered a net loss of $39 million in 2011, and an even greater loss of nearly $100 million in 2012. The company threw away $215 million at one point on solar panels that ended up failing at high temperatures. (A solar panel that can't withstand heat?)
But First Solar has political connections within the Obama Administration. And it also has a trump card: First Solar is a member of the "Business Alliance," a secret clique of corporate donors to the Center for American Progress (CAP). CAP, in turn, lobbied Capitol Hill for First Solar, without disclosing the financial support it receives from the flailing solar energy company:
"Though the think tank didn't disclose it, First Solar belonged to CAP’s Business Alliance, a secret group of corporate donors, according to internal lists obtained by The Nation. Meanwhile, José Villarreal — a consultant at the power-house law and lobbying firm Akin Gump, who 'provides strategic counseling on a range of legal and policy issues' for corporations — was on First Solar's board until April 2012 while also sitting on the board of CAP, where he remains a member, according to the group's latest tax filing."
Just so we've got this straight: the Export-Import Bank secures funding for First Solar in the form of taxpayer-backed loan guarantees. First Solar uses some of that money to fund CAP, which in turn lobbies Washington to funnel more taxpayer money to First Solar.
One of the government-supported projects CAP's representatives touted before Congress was Antelope Valley, a solar farm backed by — you guessed it, First Solar. It's a vicious circle of cronyism.
Another beneficiary of the Ex-Im Bank’s largess, actually its biggest beneficiary, is Boeing. Boeing receives 82% of all the Bank’s loan guarantees. So it is with great surprise that we learn that Boeing is actually leading the recent stock market rally, up about 20% on the Dow. Yet Boeing receives more funding in the form of taxpayer-backed export loan guarantees than any other company. This doesn’t make sense.
Neither does it make sense that the Bank helps finance helicopters for off-shore drilling in Mexico. Would it not make more sense for the U.S. economy for the Obama administration to permit more off-shore drilling here in the United States? Mexico’s oil industry is run by a state-run monopoly, Pemex, an entity labeled "the most corrupt entity" in the federal government.
The Export-Import Bank appears to be out of control. As Congress considers the re-nomination of Bank chief Fred Hochberg this year and the reauthorization for the Bank itself next year, it should demand significant reforms.