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From the "I'm So Glad We Reauthorized That" File: More Ex-Im Bank Fail
August 16, 2012
It’s well known these days that green energy endeavors are extremely sound investments, especially for the U.S. government, whose track-record in this area is not at all besmirched by one costly failure after another after another after another.
That’s why it is such a total shock that immediately after securing an Export-Import Bank (Ex-Im Bank) backed loan, the Denmark-based LM Wind Power turned around and laid off more than 200 U.S. workers. Apart from the fact that one government backed green energy venture after another has lost money or gone under, there was no way Ex-Im Bank could have seen this coming; probably the details below from The Washington Free Beacon were closely guarded secrets:
When LM Wind Power came to Little Rock, Arkansas, in 2007, it said it would employ 1,000 people by 2012. But the global economic crunch led to diminishing demand. Three months before its loan guarantee was finalized, LM Wind Power announced its profits had fallen 41 percent last year.
LM Wind Power also has had numerous citations for workplace safety violations. The Department Of Labor’s Occupational Safety and Health Administration cited the firm 11 times in an investigation beginning October 2010 for exposing workers to unsafe conditions and noted the company had demonstrated a “continued pattern of failing to comply” with OSHA standards.
In 2010, LM Wind Power Blades was cited with OSHA violations because of conditions that killed a worker.
The Department of Energy has been getting a lot of attention for its failed Title 17 taxpayer-backed loan guarantee program, but it’s far from the only agency that deserves close scrutiny (if not elimination) for persistent forays into doomed green energy projects. Like a slot-machine addict, the weekly news of government funded failures seem to serve as no reason why the next big investment won’t be the one that finally pays out.
Again, despite repeated and costly failures in the green energy industry, the Heritage Foundation reports that Ex-Im Bank recently made a $2 BILLION loan for green projects such as wind and solar energy in South Africa – not several years ago when everyone was still flush, not last summer before the news of Solyndra broke, but last week - after numerous and costly failures:
“To now, Ex-Im Bank has not cost the taxpayer money. But there are strong reasons to think this loan is a mistake. When SolarReserve or some of its South African partners go under in the next couple years, Ex-Im will face renewed congressional demands that it be curbed or closed,” said Heritage’s Derek Scissors, senior research fellow in Asian Studies.
On top of the fact that Ex-Im Bank’s market-distorting actions are well-outside the role of government and seriously poor fiscal policy, the repeated bad investments and inherent cronyism within the institution should have been more than enough reason to oppose reauthorizing the bank. The Examiner’s Tim Carney sums up the cronyist connection here:
For years, I have been saying that green energy is the place to look if you’re looking for tales of cronyism, corruption, and corporate welfare. It has all the elements: profits dependent on subsidies, customers that are often government-protected monopolies, deep involvement of finance types ranging from Goldman Sachs to politically connected VC, PE, and hedge funds.
These elements are all too alive and well within Ex-Im Bank. You can read more about the crony capitalists at the helm here.
With no sign of being afflicted by simple logic in the near future and with so many bad projects out there still to fund it’s a good thing that a “compromise” was struck to reauthorize Ex-Im Bank just a few short months ago. Outside of Washington, compromises tend to mean that each side of a fight loses a bit to meet somewhere in the middle. In this instance, the middle was a massive funding increase from $100 billion to $140 billion, so there are still plenty of funds to throw down the green energy money pit.
PS: In other green energy news, Fisker Automotive, known best for it’s very flammable high end Fisker Karma hybrid cars and recipient of millions of dollars in DOE loans, just named its new CEO, who is the former head of Chevy Volt at GM. Chevy Volt, it should be noted, made no money and costs taxpayers thousands of dollars per car. This should end well.
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