Ex-Im Bank Funds Green Jobs Overseas

Bill Richardson sits on Ex-Im Bank committee, board of loan-recipient Spain's Abengoa

Bill Richardson / AP
January 6, 2013

The U.S. Export-Import Bank recently steered hundreds of millions of dollars in federal loans to Spanish green energy conglomerate Abengoa, which happens to share an advisory board member with the bank.

The Ex-Im Bank approved a $78.6 million direct loan to Spain-based Abengoa in December. It also approved a $73.6 million direct loan to a wind farm in Uruguay, which is owned by Abengoa.

Former Democratic New Mexico Gov. Bill Richardson sits on both the Abengoa International Advisory Board and is currently listed on the Ex-Im bank’s website as a member of the advisory committee that helps guide bank policy.

Richardson was not listed in the Ex-Im Bank’s November announcement of its 2013 Advisory Board members.

"Mr. Richardson had no role or communication with anyone in the Bank regarding that transaction," said a spokesman for the Ex-Im Bank. "His appointment to the Advisory Board was made public only after he had been fully vetted by the Bank, which occurred after the initial press release was issued."

It is unclear, though, if Richardson joined the Ex-Im Bank’s advisory board before or after the decision to extend the loan was made. The Ex-Im Bank did not immediately respond to a follow-up inquiry.

Critics of the Ex-Im Bank say the connection between Richardson, Abengoa, and the bank is another instance of "corporate welfare" at the bank.

"The Export-Import Bank is nothing more than a massive, taxpayer-backed fund for corporate welfare, so a story like this comes at no surprise to us or to anyone who has pushed for the bank to be shut down," said Club for Growth spokesman Barney Keller.

The Club for Growth is one of several small-government groups that opposed the reauthorization of the Ex-Im Bank last year. The reauthorization bill raised the limit on the total financing the bank can guarantee borrowers from $100 billion to $140 billion.

The groups, along with several conservative members of Congress, oppose the bank on the grounds that it favors large, politically connected companies and distorts markets.

However, supporters of the bank say it encourages U.S. exports and supports American jobs.

The Ex-Im Bank, which extends taxpayer-backed loans to foreign buyers of U.S. exports, estimates approximately 510 American jobs will be supported by the Abengoa transactions.

"These two transactions demonstrate the strength of American energy technology and highlight the importance of this growing sector," Ex-Im Bank Chairman and President Fred P. Hochberg said in a statement. "In order for the U.S. to compete globally, our companies must continue to produce cutting-edge energy technology. President Obama set an ambitious goal of doubling U.S. exports in five years, and these types of projects will help us meet that goal in 2015."

As previously reported by the Washington Free Beacon, Abengoa has garnered a wealth of federal subsidies and preferential treatment from the Obama administration, such as fast-tracked leasing from the Interior Department for its solar farms and loans worth $2.78 billion from the Energy and Treasury Department.

The jobs created from these loans were projected to create 195 permanent jobs at a rate of more than $14 million per job.

Abengoa’s American green energy projects—Solana, Movjave Solar, and Abengoa Bioenergy Biomass of Kansas LLC—all had low credit ratings but were still approved for significant DOE loans.

Solana’s Fitch credit rating was BB+ in 2010 when the company received $1.45 billion from the DOE for a solar thermal plant. Mojave Solar’s rating was BB when the company received $1.2 billion in September 2011. Bioenergy Biomass was rated CCC when it received a $132.4 million loan in August 2010.

Some of Richardson's largest campaign contributors received during his term as governor of New Mexico lucrative regulatory exemptions and preferences that aided their companies, leading to allegations of cronyism and corruption.

"State regulatory changes helped transform a small company owned by a pair of Richardson administration insiders into the biggest ‘cradle to grave’ oil field waste disposal company in the Oil Patch of southeast New Mexico," the Albuquerque Journal reported in 2010.

Prior to his election as governor, Richardson served as secretary of the Department of Energy.

Update Jan. 6, 4:41 p.m.: 

"As stated previously, Richardson had no communication or role with anyone at the bank regarding this transaction," an Ex-Im Bank spokesman said. "The bank has financed several Abengoa projects over the last few years and the details of this transaction were finalized prior to Richardson joining the advisory board."

Richardson is also connected to Diane Farrell, a former Ex-Im Bank director. Richardson headlined a fundraiser for Farrell's 2004 congressional campaign that was expected to bring in $300,000. She voted to approve a final commitment on an $83 million loan to Abengoa for a plant in Mexico while still a director in 2011.

The Inter-American Development Bank also awarded Abengoa a $41 million loan in December for its wind project in Uruguay. Richardson serves on a selection committee for an annual award given out by the bank.

This is not the first time Richardson has faced accusations of conflicts of interest. He was accused of being involved in another pay-to-play scandal involving a New Mexico state grant to CDR Financial Products. Richardson previously was investigated for pay-to-play in 2009 before the Justice Department dropped the investigation.

Published under: Cronyism , Ex-Im Bank