My interest lay in the paradox that the US was financing oil exploration in Brazil with US tax dollars while barring development of oil fields in and about the US.
The story gets more interesting as we look into it. Thanks to Rick Parrish for referring me to the the Export-Import Bank website. The Ex-Im website has a response to the Wall Street Journal article I quoted in my earlier article:
Background on Ex-Im Bank: (from the Ex-Im website)
* The Export-Import Bank of the United States’ (Ex-Im Bank) mission is to help create and sustain jobs for American workers. The Bank does this at no cost to the American taxpayer; in the past sixteen years the Bank has netted the American people $4.9 billion and the jobs those exports have supported.
* More than 80% of Bank authorizations during the last fiscal year directly benefited small businesses.
Charges and facts:
Charge: The U.S. government is giving away more than $2 billion in taxpayer dollars to Brazil’s largest oil and gas company to drill for oil in Brazil.
Fact: The Bank has approved a preliminary commitment to lend up to $2 billion to Petrobras for the purchase of American-made goods and services. The funds will go to American exporters as payment for their sales to the company. Of note, the Bank is self-sustaining and no taxpayer dollars are involved.
Charge: The loans to Petrobras represent a giveaway of U.S. tax dollars.
Fact: The Bank’s activities do not cost the American taxpayer a dime. In fact, since 1992 the American people netted more than $4.9 billion and the jobs those exports created.
Charge: America is exporting jobs to Brazil as a result of the loans.
Fact: Only American made goods and services qualify for Ex-Im Bank loans or guarantees. This is the government doing what it's supposed to do – helping to create U.S. jobs, making sure that Americans get a fair shot at selling goods and services, and helping American workers compete on a level playing field against foreign competition.
This response comes from a government agency that has been criticised for allegedly favoring special interests ahead of that of the U.S. taxpayer.
This agency also uses US tax dollars to underwrite their loans and this loan is being made while the deficit is climbing to unprecedented levels. The loans may not cost taxpayers a dime if they are repaid, but the money comes from taxpayers, not out of thin air.
It is also worth noting that billionaire investor George Soros
bought an $811 million stake in Petroleo Brasileiro SA in the
second quarter, making the Brazilian state-controlled oil
company his investment fund's largest holding. So we have Soros investing in Petrobas shortly before the Ex-Im bank underwrites a loan for Petrobas. That shows excelent timing.
From Offshore Magazine: Petrobras finance director Almir Barbassa says
that negotiations are under way with Eximbank to double its present
trade credit limit of $2.2 billion for the purchase of goods and
services from US suppliers. He was also quoted as saying that the loans are expected to reach $10 billion.
That could go a long way toward developing domestic energy.
This story is like an onion, every day that goes by uncovers another connection.
When will we get the full story on who owns the US companies that are supposed to benefit from this transaction? Remember the first line of the Ex-Im quote?
The Export-Import Bank of the United States’ (Ex-Im Bank) mission is to help create and sustain jobs for American workers.
My guess is that there are Congress critters and Senators with a big stake in the companies that are benefitting from this loan.
You may say, so what if taxpayer dollars enrich politically connected individuals! This is just business as usual, the party in power gets the spoils of war.
The downside is that losing sight of the common interest while serving private interests has aroused resentment among a growing number of citizens. We need to allow development of domestic energy sources and this is not being done.