Posted on 01/22/2002 7:13:37 PM PST by JohnPaulJones
Huge Enron loans expose taxpayers Ex-Im Bank, OPIC backed 18 of firm's overseas projects to tune of $1.7 billion
WASHINGTON Federal overseas economic-development agencies have financed or underwritten 18 Enron Corp. projects, exposing U.S. taxpayers to a total of more than $1.73 billion in potential liability, according to agency officials.
Enron, which recently filed for the biggest bankruptcy in U.S. history, secured funding from the Clinton administration for nearly all of the risky foreign projects, WorldNetDaily has learned.
As WND first reported Jan. 11 , Enron executives, including beleaguered chairman Ken Lay, got seats on no less than 11 Clinton overseas trade trips. No Enron officers boarded the Bush administration's sole trade junket last year to Russia.
As WND also first reported Friday , the largest U.S.-backed Enron project ? a $3 billion power plant in India ? sped Enron's collapse, according to Wall Street analysts.
First called a "sweetheart" deal by critics, the Dabhol, India, project ironically soured last year when Enron couldn't get local Indian officials to pay for the power it generated, turning the project into a costly boondoggle. The Houston-based energy giant cited the payment dispute when it announced an eye-popping $618 million loss in the third quarter.
The Export-Import Bank loaned the Enron-led India project $301.9 million beginning in 1994, Ex-Im Bank spokeswoman Cheryl Crispen says.
The Overseas Private Investment Corp. kicked in another $160 million in loan guarantees for the project, while underwriting the controversial deal with $180 million in so-called "political risk insurance," says OPIC spokesman Lawrence Spinelli.
Ex-Im Bank's total exposure to its six active Enron-related projects is $672 million, Crispen told WorldNetDaily.
Besides the India project, the seeds of which were planted on a 1994 Energy Department trade trip to India, the federal bank helped finance deals in Turkey (fiscal years 1995-1996), China (three in 1996) and Venezuela (2000).
Meanwhile, American taxpayers are potentially on the hook for $1.059 billion in OPIC loans and insurance policies for 12 active projects in which Enron is one of the sponsors, Spinelli says.
The Enron-related projects are also in overseas "emerging markets." Commercial banks and insurers tend to steer clear of backing long-term projects in such markets, many of them in Third World countries, because of the risks involved ? namely unstable governments.
OPIC's portfolio of active Enron projects includes deals in Guatemala (fiscal 1992); the Philippines and Argentina (1993); Dabhol, India (1994); Colombia and Turkey (1994); Turkey (1995); Venezuela, Brazil and the Philippines (1998); Brazil and Bolivia (1999); Phase 2 of Dabhol (1999); and Guatemala (2000). OPIC provided additional funding or insurance for existing projects in countries like Turkey, while financing or underwriting more than one project in other countries.
Enron is one of OPIC's top 10 customers, accounting for 7 percent of the federal agency's total $16 billion portfolio, Spinelli says.
Federal lenders expressed concerns about getting paid back by Enron-controlled Dabhol Project Co. as early as April, after the Indian state electricity board reneged on payments.
But Crispen says the Enron-led project is current on its payments to the Ex-Im Bank, which received its September installment of $100 million on time. The next payment is due in March.
"We have not got any calls from Enron saying they'll have trouble paying" on the note, she said, adding that Ex-Im credit officers meet regularly with Enron officials. General Electric Co. and Bechtel Group Inc. are minor partners with Enron in the Dabhol project.
Should the project default on payments, risk to taxpayers is minimal, Crispen says, since four Indian banks have guaranteed the loan.
Enron appears to be current on all of its OPIC loans and insurance-policy premiums, as well.
"As far as I know, they are (current)," Spinelli told WorldNetDaily, though he says he'd have to do more research to know for certain.
He adds that OPIC has set aside $3 billion in reserves to cover losses on both insurance premiums and loan repayments.
Former President Clinton, who had lobbied hard for Enron's deal in the mid-1990s, intervened again on the company's behalf in meetings with local Indian officials during his trip to India in April. (Just four days before Phase 2 of the Dabhol deal was finalized in 1996, Enron donated $100,000 to the Clinton campaign.)
Vice President Cheney also raised Enron's problems in Dabhol with Indian opposition leader Sonia Gandhi in a June 27 meeting, according to a New York Daily News report.
But President Bush decided not to raise the issue during his meeting with India's prime minister on Nov. 9.
In March, Bush proposed in his budget slashing funding for both Ex-Im Bank and OPIC, a major blow to Enron.
At more than $1.7 billion, the federal agencies' exposure to Enron loans and potential insurance claims is nearly a quarter of the fiscal 2002 budget for missile defense, and nearly a quarter of the budget for homeland security.
I pointed out this and that the Clinton's not only used these banks to fund Enron projects but also used the CIA to do work for Enron in research and analysis for this project.
Using the CIA as an adjunct for a private corp is a scandal.
And it turned out to be Enron.
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