Tag Archives: General Electric

Government Gone Bad: It’s Time to Let the Export-Import Bank Die

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Crony Capitalism on Steroids!

By C.A. Bamford

With US debt spiraling into trillions of dollars, our economy growing at a snail’s pace and reports of mismanagement, blatant corruption and incompetence in every branch of our government surfacing almost daily, ordinary Americans are beginning to pay more attention to what is going on in the no longer hallowed halls of our nation’s capital.

One troubling example of blatant cronyism is the Export-Import Bank, which provides taxpayer-backed loans and loan guarantees to foreign countries and companies to purchase U.S. products. Its charter was set to expire on September 30,, 2014, but with growing opposition to the bank, a 5 year renewal was rejected and supporters settled for a 9 month extension of its existing charter. That extension expired at the end of June.

While Ex-Im claims that 90% of its 2014 transactions supported small business, The Heritage Foundation and George Mason University’s Mercatus Center data shows that only 20% of total Ex-Im authorizations go to small businesses. A number of reports have found that the agency benefits a small number of politically-connected businesses like Boeing, General Electric and Caterpillar. These are all fine companies, but do they really deserve taxpayer-funded handouts when so many other equally fine companies are struggling? In 2013, approximately 30% of the banks transactions benefitted Boeing, earning Ex-Im the nickname “Bank of Boeing”.

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General Electric Chairman and CEO, Jeff Immelt says letting Ex-Im bank’s charter expire, ending their export subsidies for GE and others would be “economic catastrophe”, but the facts say otherwise.

House Finance Committee, Jeb Hensarling, after holding a number of hearings on Ex-Im’s future, chose not to bring a bill reauthorizing the bank through his committee. Hensarling has called the bank a form of “corporate welfare”, stating that big banks primarily profit off Ex-Im. JP Morgan & Chase Co. for example has received more than $5.1 billion from Ex-Im. “To support more robust economic growth, economic justice and equal opportunity for all, it is time to wind down Ex-Im,” Hensarling said.

Meanwhile, Ex-Im officials have revealed that there are 31 open fraud investigations and the potential for many more indictments stemming from Ex-Im transactions. A former bank loan officer, Johnny Gutierrez, pled guilty to accepting bribes 19 different times from 2006 to 2013.

Currently a non-partisan government accountability organization has submitted a FOIA request for text messages between bank officials from a top Ex-Im official, Scott Schloegel. Unfortunately, Schloegel claims that he accidentally deleted the text messages.

Only Congress has the authority to reauthorize the bank’s charter. And although support for the bank has been steadily eroding, the Senate once again voted in favor of reauthorization. In the true spirit of political gamesmanship, Democrat Senators Maria Cantwell of Wa State, Heidi Heitkamp of North Dakota and GOP Senator Lindsay Graham of South Carolina held the Pacific Trade legislation hostage until (with a little encouragement from President Obama via phone) Senator Mitch McConnell caved and provided the winning margin to extend the life of Ex-Im. Graham bragged about the deal-making on Twitter; “Most important aspect of agreement is we will also have the opportunity to vote on #ExIm reauth attached to the Highway Trust Fund reauth.

The House is now set to let the bank expire and there have been discussion of the Highway Trust Fund being the vehicle for reauthorization. House and Senate Leadership should use this as an opportunity, especially after the recent Supreme Court rulings, to log a win for conservatives.

How Export-Import-Bank Works

Now based in Alaska, longtime contributor Charlene Bamford is a policy adviser and intellectual thinker who teaches at the International School

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Crony Capitalism: Blowing in the Wind

By Gary P Jackson

One of the biggest scams out there is wind power. It works, but is not very efficient, and there is no way to store energy created in for use in peak times which, BTW, are the times when winds are likely to be the lightest.

Chriss W. Street at Brietbart’s Big Government exposes the amount of corruption and cronyism involved with Big Wind. General Electric, a huge Obama backer, is doing quite well thanks to the regime’s policies that favor wind power.

With the recent revelation that the ultimate Washington insider, Jon Corzine, appears to have ordered the looting of hundreds of millions of dollars from customers at commodity broker, MF Global, you would think crony capitalists would try to keep a low profile. But after only a weekend of contrived outrage, our elected leader seem to have returned to business as usual with a bipartisan group of Senators, including Mark Udall (D-CO), Michael Bennet (D-CO), Chuck Grassley (R-Iowa), Scott Brown (R-MA) and Dean Heller (R-Nevada) introducing legislation to extend for another two years the subsidies for wind power, labeled deceptively as “The American Energy and Job Promotion Act.”

The real message coming from the U.S. Congress to taxpayers is: “we need either less corruption or more chances to participate in it.

Windmills have been around for hundreds of years to lift well water and grind grain, but the father of the recent renewable energy scam is none other than Kenneth Lay, the infamous former CEO of Enron. In January 1997, Enron acquired Zond Corporation of California, the largest developer of wind-powered electricity at the time.

Enron then lobbied the State of Texas to enact a broad electricity restructuring bill with a “renewable portfolio standard” that mandated private electric utilities buy a minimum 2,000 mega-watts qualifying renewable energy by 2009 and 10,000 mega-watts by 2025. Enron also lobbied Congress to successfully amend Title XXII of the Energy Policy Act of 1992 to direct the federal government to authorize tax incentives for renewable wind energy technologies.

Mr. Lay’s wheeling and dealing eventually drove the Enron leveraged empire into bankruptcy court four years later. His scams cost investors $10 billion dollars and over 20,000 employees lost their jobs and retirement benefits in the largest bankruptcy in American history.

Mr. Lay died prior to facing a possible life sentence for his crimes, but Enron’s crony tax credits, mandates, and regulations did not die with him. In May of 2002, General Electric acquired Enron Wind Systems and renamed it GE Wind Energy.

GE’s corporate motto is “Imagination”, but it was lobbying muscle that drove wind power. GE’s $23 million lobbying in 2005 was rewarded with Congressional passage of the Energy Policy Act of 2005 that provided new tax incentives and loan guarantees for renewable energy.

As GE lobbying rose to $26 million in 2009, Congress amended Section 406, the Energy Policy Act of 2005 authorizes loan guarantees to wind power as an “innovative technology that avoid greenhouse gases.

In 2010, GE lobbying soared to $39 million as the American Recovery and Reinvestment Act of 2009 spiked Congressional funding to $27.2 billion in grants for renewable energy.

Wind power has so much in the way of a accelerated depreciation tax break, production tax credits, and renewable energy credits that GE has been able to recoup its capital investments within a few years.

The concept of actually selling power is far down the list of priorities for wind power. Electricity usage peaks in the cold winter and the hot summer, yet wind tends to blow the hardest in the low usage spring and fall. Consequently, electric utilities must traditionally have fuel power plants ready at all times to cover 100% of electricity demand. But under law, if wind turbines do begin spinning the utilities are required to pay approximately twice the going rate for any wind power that is transmitted to their power grid.

A good example of the economic silliness of “wind farming” takes place along the Columbia River Gorge where there are a high number of wind turbines.

The local electrical operator is Bonneville Power Authority (BPA). Last year, BPA had to shut down the wind farms for nearly 200 hours over 38 days. By law, Bonneville is required to compensate wind companies for half their lost revenue. This year’s rebate bill could reach up to $50 million a year.

The extension of the crony renewable energy subsidies were originally buried deep in the legislation authorizing the Keystone XL pipeline, but the Senate rejected the measure on a largely party-line vote.

According to the U.S. Energy Information Agency statistics, wind energy subsidies exceeded the subsidies of all other conventional sources of electricity, combined.

The Keystone XL pipeline bill failed because it would have brought cheap and abundant power to most Americans. The American Energy and Job Promotion Act seems to be headed for easy passage, because it brings abundant amounts of subsidies to GE and other huge multi-national insiders.

This is insanity personified. Not only is wind power unreliable, it’s just too expensive to be practical. And with laws forcing utilities to pay these wind farms when they are NOT producing energy, it makes no sense to anyone but those who are running the scam.

America needs to reign in this craziness, and voters must demand ethics reforms that have real teeth. Too much money is being shoved at unscrupulous lawmakers who, in turn, write laws that favor these scam artists. And make no mistake, that’s exactly what these people are.

We need laws that will hold lawmakers responsible for this generational theft. They must not be allowed to use their position to enrich themselves, and their cronies, on the backs of the tax payer. In the case of these “green” energy boondoggles, everyone pays, as not only are billions stolen from the tax payers, but energy prices are also higher. A double whammy.

It’s time to contact your Senators and Congressmen, and demand action. Oh and remind them there’s nothing like a good old fashioned election to clean house, if that’s what it takes.

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