65.4% of Loan Guarantees Made by U.S. Government Bank Benefited Boeing
(CNSNews.com) – 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. They show that between 1997 and 2013, this federal government bank guaranteed $142,870,200,824 in loans made by private banks to foreign organizations that used the money to buy U.S. manufactured products. $93,468,763,440 of these loan guarantees--or 65.4 percent of the total amount guaranteed by the U.S. government-- went to foreign organizations that were purchasing Boeing products.
In the 17 years from 1997 to 2013, according to the bank’s annual reports, the bank issued 1,046 loan guarantees (worth $142,870,200,824). 426 of these—or 40.7 percent—went to organizations that were using their U.S.-government guaranteed loan to buy products from Boeing.
From 1997 through 2013, according to the annual reports, the Export-Import Bank also made $37,611,378,066 in direct loans to foreign organizations so they could purchase products manufactured in the United States.
Of those $37,611,378,066 in direct loans, $1,680,070,922--or 4.5 percent of the total amount—went to organizations so they could purchase products from Boeing.
“A longstanding concern about Ex-Im Bank centers on 'corporate welfare' issues, with some observers critical that the bulk of Ex-Im Bank financing, by dollar value, historically has been directed to a few large U.S. corporations that they believe are capable of shouldering the risks of exporting to developing countries," says a Congressional Research Service report. "Some critics of Ex-Im Bank have called it ‘Boeing’s Bank,’ in reference to the fact that Boeing Corporation, a U.S. aerospace company, historically has been the single largest beneficiary of Ex-Im Bank support.”
CNSNews.com sent Boeing its calculation that $93,468,763,440 of the Export-Import Bank’s $142,870,200,824 in loan guarantees from 1997 through 2013 went to foreign organizations that were buying products from Boeing. CNSNews.com asked how this helped Boeing and whether the company considered it extraordinary.
“Boeing is and chooses to be an aerospace innovator, not a bank,” Boeing spokesperson Gayla Keller responded. “Boeing cannot fund innovative new products if its resources are tied up in financing aircraft sales. Ex-Im allows Boeing--as well as thousands of small, medium and large manufacturers across the country--the ability to market and sell our products on their merits in the face of state-subsidized competitors.”
According to the Congressional Research Service, the Export-Import Bank “helps finance American exports of manufactured goods and services, with the objective of contributing to the employment of U.S. workers, primarily in circumstances when alternative financing is not available. … Ex-Im Bank’s main programs are direct loans, loan guarantees, working capital guarantees and export credit insurance.”
“Ex-Im’s third-largest single-country market was Indonesia, with authorizations of $1.2 billion,” says the Export-Import Bank’s annual report for 2013. “This financing includes approximately $1 billion supporting Lion Air’s purchase of a fleet of Boeing 737-900ER (extended range) aircraft and $94 million supporting exports of locomotive kits from General Electric (GE) Transportation.”
The 2013 annual report also notes, for example, that the bank guaranteed $558,350,949 for Air China to buy commercial aircraft for Boeing.
Since 1997, Chinese companies buying Boeing have received $7,142,887,035 in loan guarantees from the Export-Import Bank. That is 5 percent of the total value of the loan guarantees the bank has made since 1997.
Other examples of loan guarantees that benefited Boeing cited in the 2013 annual report include $323,382,000 to the Kuwait-based ALAFCO Aviation to buy Boeing commercial aircraft; $496,934,008 to the Russia-based VEB Leasing JSC to buy Boeing commercial aircraft; $169,873,174 for Turkey-based Turk Hava Yollari to buy Boeing commercial aircraft; and $436,185,246 to the United Arab Emirates-based Emirates Airline to buy Boeing commercial aircraft.
The Export-Import Bank’s charter expires at the end of this fiscal year on Sept. 30. If Congress does not reauthorize it by then, the bank will no longer have the legal authority to make loans and loan guarantees.
In July, House Financial Services Chairman Jeb Hensarling (R-Texas) wrote a letter to the leaders of Boeing and the National Association of Manufacturers criticizing them for their lobbying efforts to preserve the Ex-Im Bank.
“I respect your constitutional right to petition your government for the redress of grievances. I just wish you had used the occasion to petition for opportunity instead of special privilege,” Hensarling said in the letter. “It is undeniable that Ex-Im places credit risks on the taxpayers’ balance sheet that could instead be placed on your companies’ balance sheets.”
In his weekly address on Saturday, President Barack Obama called on Congress to reauthorize the Export-Import Bank, which he credited with helping to create export-related jobs in the United States.
“One place to start is by supporting something called the U.S. Export-Import Bank,” said Obama. “Its sole mission is to create American jobs. That’s it. It helps many American entrepreneurs take that next step and take their small business global. But next month, its charter will expire--unless Members of Congress do their job and reauthorize it.”