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Date: Mon, 21 Jul 1997 10:07:11 -0700
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From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: "Killing Corporate Welfare" (fwd)
<snip>
>
>KILLING CORPORATE WELFARE
>
>By John F.McManus
>
>
>Representative Rob Andrews (D-NJ) recently introduced H.R. 387, the
>Overseas Private Investment Corporation (OPIC) Termination Act,Begun in
>1971, OPIC is a government agency formed to provide project financing,
>investment insurance, and other services for American businesses so
>that they can operate risk free in developing nations where investment
>environments may be perilous.
>The very name of this agency cleverly misleads. OPIC is not "private,"
>but government: it is not a "corporation" in the real sense, but a
>non-taxpaying federal bureacracy feeding at the public trough; and its
>greatest beneficiaries aren't "overseas," but right here in corporate
>America. It ought to be renamed the Government Agency for Subsidizing
>Big Annual Givers (GASBAG) inasmuch as the corporations receiving OPIC
>subsidies are among the largest donors to federal re-election campaigns.
>Last September, Representative John Kasich (R-OH), a leader of the move
>to abolish OPIC,listed some of the projects that received OPIC funding:
>"We developed a soft drink bottling company in Poland and in Ghanha,a
>travel agency in Armenia. We have magazine publishing in Russia, a
>lumber mill in Lithuania, a shrimp farm in Ecuador, pension management
>in Columbia, a hotel in Ukranie, and 16 restaurants in Argentina."
>To that list Rob Andrews added a luxury hotel in Jamaica, a banana
>plantation in Costa Rica, and an art gallery in Hati. He pointed to the
>impact on American jobs from OPIC's proponets claim it stimulates
>exports and Andrews agrees, but Andrews insists that jobs are the major
>exports -- out of the United States. He told the House colleagues: "In
>1994, Kimberly-Clark obtained $9.27 million from OPIC; the same year the
>Labor Department certified that 600 of Kimberly-Clark's U.S. employees
>were adversely affected. Similarly, levi-Strauss obtained $41.8 million
>in OPIC insurance, while the government stated that 100 Levi-Strauss
>workers in the United States were hurt."
>Eleanor Holmes Norton, non-voting House Delegate from Washington, D.C,
>pointed out that "OPIC pays no taxes, pays no dividends, and two-thirds
>of its income comes from Treasury securities...." Concerning OPIC's
>negative impact on American jobs she cited the following figures: "let
>me take four of the large OPIC users: Ford, minus 160,000 jobs here;
>Exxon, minus 83,000 jobs here; AT&T, minus 127,000 jobs here." Certainly
>not all of these job losses can be attributed entirely to OPIC programs,
>but some surely can.
>Other corporate fat cats benefiting from OPIC's loans and loan
>guarantees include DuPont, Ford, McDonald's,US West, PepsiCo, and
>Citicorp. In 1995, while piling up a net income of $3.5 billion and
>making a major donation to the Council on Foreign Relations (a practice
>followed by numerous other OPIC beneficiaries), CITICORP tapped OPIC's
>for $342 million for investment insurance.
>Representative Jesse Jackson Jr. (D-IL) correctly noted that OPIC'S
>corporate recipients earn a private profit while any default involving
>OPIC-insured activity becomes a public obligation: "A private profit and
>a public loss -- that's socialism for the rich."
>OPIC frees large corporations to invest -- at no risk to themselves --
>in countries carrying D minus or worse credit ratings. OPIC proponets
>insist that virtually all of its loans have been repaid and that there
>have been almost no insurance claims to honor. But Representative
>ED-Royce (R-CA) countered that OPIC operates exactly like the federal
>agency that stood behind the savings and loan industry in that that both
>"sold the full faith and credit of the United States Government." he
>reminded colleagues that no one worried about having to make good on
>huge savings and loan losses. A failed OPIC,Royce stated, would cost US
>taxpayers $25 Billion.
>Unfortunately, many of the congressmen criticizing OPIC and calling for
>its demise still believe that direct foreign aid is acceptable. Few
>seem to realize that nearly all of the money the federal government
>spends is on unconstitutional ventures. In fact, then representative Jan
>Meyers (R-KS) ludicrously maintained of OPIC: "It is ...the government
>performing its legitimate of assisting American Citizens in their
>dealings with foreign countries."Legitimate function? Similarly,
>Representative Bereuter (R-NE) declared that because "Japan supports
>over 36 percent of its total exports with some form of export credit,"
>OPIC must do likewise and even be expanded. And Representative Lee
>hamilton (D-IN) claimed that "OPIC supports US Foreign policy interests
>... in countries whose economic success is in our national interests."
>All such political posturing is pure Balderdash!
>The bottom line is that OPIC is a federal welfare program enabling huge
>U.S. corporations to pursue projects in in foreign countries they
>wouldn't dare touch if they were forced to use their own money. In
>addition, none of OPIC's congressional opponets questioned OPIC's
>possible links to corporate campaign giving. Is it possible that OPIC's
>corporate beneficiaries have been funneling some of the federal funds
>back into various re-election efforts?
>H.R 387 should be supported as a primary step toward re-inforcing
>long-dormant constitutional limitations on the federal government.
>
>
>
>-> Send "subscribe snetnews " to majordomo@world.std.com
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>
>
>
========================================================================
Paul Andrew Mitchell : Counselor at Law, federal witness
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