LakeCumberlandBoaters.com

Q: Did Obama loan $2 billion to Brazil’s oil company to benefit China and George Soros?

A: The president had nothing to do with the loan, which the Export-Import Bank approved for Brazil to buy U.S.-made equipment and services.

This claim stems from a "preliminary committment" made back on April 14 by the board of directors of the Export-Import Bank of the United States. The bank intends to loan up to $2 billion to finance exports to the Brazilian oil company Petróleo Brasileiro S.A., known as Petrobras, over the next several years.

The e-mail is false on two counts.

* The message falsely says the decision was due to an "executive order" by the president. No presidential order was required. Furthermore, none of President Obama’s appointees had joined the Ex-Im board at the time of the vote, which was unanimous, and bipartisan. The Ex-Im Bank states: "In fact, at the time the Bank’s Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush."
* The message falsely claims that "we have absolutely no gain" from the loan. In fact, the loan is being made specifically to finance purchase by Petrobras of U.S.-made oilfield equipment and services. The mission of the Ex-Im Bank is to encourage exports by making such loans.

The bank’s chairman and president, Fred P. Hochberg, underscored the purpose of the loan during a trip to Brazil at the end of July:

Ex-Im Bank President Hochberg, July 29: I chose Brazil as my first international destination for good reason: Brazil is a powerhouse among South American economies and offers tremendous opportunities for U.S. exporters in many sectors. I want Brazilians to know that Ex-Im Bank has the will and the capacity to finance their purchases of U.S. equipment, products and services

Obama appointed Hochberg to the Ex-Im Bank on April 20, nearly a week after the board voted to approve the loan. He was confirmed May 14 and sworn in May 21.

The message claims that George Soros would "benefit most" from the loan, but that is also a baseless accusation. Soros is a favorite whipping boy of conservatives because of his early financial help to the liberal group MoveOn.org. And he is indeed a major investor in Petrobras, through his New York-based hedge-fund firm, Soros Fund Management LLC. But the hedge fund recently sold 22 million shares of common stock in the company (which carry voting rights) while buying 5.8 million shares of preferred stock (which is non-voting.) As reported by Bloomberg News, Soros reduced his stake in the company before any of the Ex-Im Bank’s promised loan has been dispensed.

There is some truth to the claim that China would benefit, but not much. Brazil recently agreed to export 200,000 barrels of oil per day to China in coming years. But that was in return for a loan by China of $10 billion, five times more than the U.S. Ex-Im Bank is lending to finance purchase of U.S. gear.

The Ex-Im Bank also would like it known that no loan has yet been made, and that the "preliminary commitment" could eventually result in either a direct loan or a loan guarantee. Either way, the Ex-Im Bank states, "no taxpayer dollars are involved." The bank is self-sustaining.

-Brooks Jackson
Sources

Export-Import Bank of the United States. "Facts About the Proposed Ex-Im Bank Loans for Petrobras’ Brazilian Offshore Oil Exploration and Development." 20 Aug 2009, acccessed 17 Sep 2009.

"Ex-Im Bank Chairman Fred Hochberg in Brazil to Promote Financing for Purchases of U.S. Exports." News Release. Export-Import Bank of the United States. 29 Jul 2009.

Kishan, Saijel and Andres R. Martinez. "George Soros Cut Petrobras Stake in Second Quarter." Bloomberg.com. 14 Aug 2009.

FasterThanYou wrote:Jeff,

If you're talking about Brazil then why not post something about Brazilian bikinis or Brazilian wax?

FasterThanYou wrote:Jeff,

If you're talking about Brazil then why not post something about Brazilian bikinis or Brazilian wax?