Skip to comments.Biden Buddy John Hynansky Gets $20M Taxpayer Funded Loan? Maybe Not – Depends/What the Meaning of...
Posted on 08/17/2012 9:18:43 PM PDT by maggiesnotebook
When this story broke today that John Hynansky received a taxpayer funded $20 MILLION loan to build two luxury car dealerships and expand others in the Ukraine, Conservatives decried it and Media Matters bashed Conservatives. Media Matters says the loan by Overseas Private Investment Corporation (OPIC) is not taxpayer funded. The truth is, it all depends on what the meaning of "self-funded" is.
Photo: John Hynansky
Hynansky is a close friend and contributor to Joe Biden's political adventurers as well as a contributor to Barack Obama, so a $20 MILLION loan with US taxpayer funding to be sent overseas, made a big splash.
OPIC is a federal agency, classified as "independent." The President and CEO, Elizabeth Littlefield was appointed to her position by Obama. OPIC is governed by a Board of Directors, President and CEO, and Executive Vice President, all nominated by the President of the United States and approved by the US Senate." We are told that taxpayers provided start-up funding which was eventually repaid. The website says there is no "net cost to American taxpayers" BUT OPIC is "appropriated administrative funding," (which can only come from taxpayers) and that funding is "reauthorized," ongoing, by Congress.
Question: Each year that the administrative funding is appropriated by Congress and added to the budgets that haven't materialized in years, do we assume OPIC returns the administrative cost back to taxpayers, as it claims it continually makes a profit.
And it begs the question: can we actually believe that there is no net cost to taxpayers?
From the Congressional Research Service: The Overseas Private Investment Corporation - June 5, 2011:
While OPICs budget is fully self-sustaining from its own revenues, Congress annually provides OPIC with the authority to cover its administrative expenses and credit subsidy funding from its offsetting collections, which include user fees and interest from U.S. Treasury securities.OPIC is the US Government's "development finance institution." It offers assistance to US businesses wanting to expand into emerging markets. It ensures that the projects meet "Congressionally-mandated requirements" to protect the environment. They collect Greenhouse Gas Accounting reports, ya-da ya-da. OPIC is very green.
For FY2011, Congress provided $52.31 million for OPICs administrative expenses and authorized a transfer of $18.115 million from OPICs noncredit account to conduct its credit and administrative programs (P.L. 112-10). President Obamas budget proposal for FY2012 requested $57.89 million for OPICs administrative expenses and a transfer of $31 million from OPICs noncredit account to conduct it programs.
OPIC loans are to have no negative impact on the US economy, and therein lies the rub with me (ignoring that the loan likely did come about because of Biden-Hynansky chumminess). Where is the government agency that actually guarantees loans real money to small businesses?
From what I hear, there are no loans for small businesses in this country. This week I heard small business owner and entrepreneur Amilya Antonetti tell Neal Cavuto that even with her stunningly successful record, she cannot get a business loan without having 60% of the loan amount in the bank for collateral. If she had 60% of the loan, she said, she wouldn't be applying for a loan in the first place. Her advice to help small businesses: drop the requirement to 30% and loosen up the funds.
Assuming that it's truthful that only private capitalization is used for these loans, OPIC is still a federal agency, so why not raise the private funds for US companies to develop in the US rather than in the Middle East, North Africa, Sub Saharan Africa and Southeast Asia, where the focus seems to be, and where diplomatic niceties are lip service? The Ukraine and other areas of the world are a part of OPIC's mission but not a huge focus.
Under OPIC rules, the entity receiving the loan must have a 25% ownership or majority ownership in the project. The total projected cost of constructing the two dealerships is $26.8 MILLION. The $20 MILLION loan is fairly heft, don't you think, but perhaps the Ukraine existing dealerships are considered collateral??? Hynansky receives a minimum principal payment deferement for 2-1/2 years during construction.
Under U.S. Economic Impact, the summary document says, This project will have a positive developmental impact on the host country, Ukraine. The project will generate a significant number of new local jobs. Running a dealership for premium automobile brands requires a highly trained sales force, mechanics, accountants, communications and advertising specialists, IT specialists, service personnel, warehouse managers, and customer relations specialists. Source: Daily CallerThe dealership sells Porsches, Land Rovers, and Jaguars. Either the company or the person has be American. At one time Jaguar was owned by Ford but today these companies belong to Germany and the UK according to this article. Hynansky is a US Citizen.
Other examples of Independent Government agencies: (with funding information on a selected few):
AMTRAK (TAXPAYER SUBSIDIZED - HUGE LOSSES)
The CIA - funded through Department of Defense appropriations
The Commission on Civil Rights - 2013 Appropriations Request $9,400,000
Director of National Intelligence - 2013 $526 BILLION (unclear what part of US Intelligence this covers)
Federal Labor Relations Authority - 2012 s $24,792,000
For necessary expenses to carry out functions of the Federal Labor Relations Authority, pursuant to Reorganization Plan No. 2 of 1978, and the Civil Service Reform Act of 1978, including services authorized by 5 U.S.C. § 3109, and including hire of experts and consultants, hire of passenger motor vehicles, and including official reception and representation expenses (not to exceed $1,500) and rental of conference rooms in the District of Columbia and elsewhere, [$24,723,000] $24,792,000: Provided, That public members of the Federal Service Impasses Panel may be paid travel expenses and per diem in lieu of subsistence as authorized by law (5 U.S.C. § 5703) for persons employed intermittently in the government service, and compensation as authorized by 5 U.S.C. § 3109: Provided further, That notwithstanding 31 § U.S.C. 3302, funds received from fees charged to non-Federal participants at labor-management relations conferences shall be credited to and merged with this account, to be available without further appropriation for the costs of carrying out these conferences.Federal Reserve System - (self funded)
Federal Trade Commission
General Services Administration (GSA) - self funded, but...
The U.S. General Services Administration (GSA) FY 2013 Budget Request provides $272 million in discretionary budget authority for GSA annual appropriations. In addition, GSA requests $(1,071) million as net budget authority (NBA) for the Federal Buildings Fund (FBF).NASA (practically defunct due to a lack of taxpayer funding)
National Endowment for the Arts (partially taxpayer funded)
Office of Personnel Management
The list is long. View it all here.
Do the taxpayers have a buck in this as many reports have said today? I don't know.
People like Hynansky don't need US federal help, but they get it because they can.
the biggest problem is the economic illiteracy. They think theres no negative consequence to low interest rate loans
The title of the article needs to be fixed. The loan is for $20 million, not $20.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.