By Eric Peterson
The federal government has a long history of playing favorites in the marketplace, and the Obama administration’s favorite is clearly green energy. Already costing Americans more than $500 million with its now-infamous Solyndra loan debacle, the federal government has decided to double-down on its green energy boondoggles overseas by reauthorizing and expanding the Export-Import Bank.
The Export-Import (Ex-Im) Bank is a government entity that provides billions worth of taxpayer-backed loans to foreign companies on the premise that the loans will encourage the purchase of U.S. made products. What they don’t tell the American people, however, is that they will be stuck with the bill if those loans aren’t repaid. That formula has already led to the Export-Import bank seeking a bailout in the 1980s—an outcome that may repeat itself as the Ex-Im Bank ramps up its loan guarantees to risky, foreign green energy ventures.
Alghough the Ex-Im Bank extends financing to a variety of projects, green energy projects are an increasingly large part of its portfolio. The amount loaned to green energy projects has increased substantially since 2009 with the Ex-Im Bank risking $2 billion on a loan to South Africa’s government to purchase renewable energy products. Among the key beneficiaries of this loan was First Solar—this company had previously received over $700 million from a Department of Energy loan guarantee in 2011. Ex-Im Bank also loaned over $10 million to Solyndra, the poster child for green energy waste, before the company went bankrupt, costing taxpayers millions.
It’s bad enough that taxpayers are asked to underwrite green energy handouts both here and abroad – but it’s even more alarming that political connections appear to play a key role in deciding who receives taxpayer backing. Abengoa, a Spanish based energy company, received a $33.6 million loan from the Bank to support solar projects. While that loan may seem unremarkable on its face, a closer look reveals that former New Mexico Governor Bill Richardson sits on the Abengoa board. Worse, Richardson is also a member of Ex-Im Bank’s advisory board. While the bank claims former Governor Richardson had no connection, it’s hard to ignore the appearance of impropriety.
On the campaign trail in 2008, then-candidate Obama called the Ex-Im Bank “little more than a fund for corporate welfare.” Under his watch, it has lived up to his 2008 assessment. The President is now on record for supporting the bank and its activities. During his presidency he has turned the bank into a vehicle for pushing a global green energy agenda, regardless of the risks posed to taxpayers. Indeed, it appears President Obama holds a far different view of the bank than candidate Obama.
Although energy diversification is important for an economy, it isn’t the role of our government to decide which firms emerge in the green energy market – or to put U.S. taxpayers at risk on behalf of foreign corporations.