President Obama’s recent trip to India was, for all intents and purposes, a standard state visit: on the agenda were speeches, a state dinner and even a military parade in honor of India’s Republic Day which featured everything from bagpipes to camels. All in all, The New York Times declared that the visit was “a great tribute to India, a sign of the country’s arrival on the world stage.”
Unfortunately, recent reporting suggests that the administration’s dealings, particularly the controversial Export-Import Bank of the United States, may tarnish our dealings with our eastern ally.
America’s export credit agency – known simply around the Beltway as “Ex-Im” – is no stranger to the charge of picking winners and losers with taxpayer dollars. A favorite of Big Business, Ex-Im is estimated to send over half of their total funding to a grand total of ten corporations, with aircraft manufacturer Boeing topping the list.
Concerns over the necessity of this New Deal-era agency led to a spirited debate in Congress last summer as the Bank’s charter was due to expire. After significant legislative deliberation – and a lobbying blitz of over $4 million courtesy of Boeing – Ex-Im’s charter was granted temporary renewal until June 30.
It’s not just major multinational corporations that benefit from the Bank’s – and, by extension, the American people’s – largesse. The institution also favors “green” energy and technology companies, and it is this sector which Ex-Im intends to heavily support in India.
A much-discussed topic during President Obama’s state visit was energy – specifically “steps to promote clean energy and to confront climate change,” according to the president. At a joint press conference with Prime Minister Narendra Modi, President Obama expressed particular support for “India’s ambitious goal for solar energy” and announced that the United States would “stand ready to speed this expansion with additional financing.”
Enter the Export-Import Bank. Reuters has reported that Ex-Im is readying $1 billion to fund deals between green energy companies in the U.S. and India. Two American solar energy companies – First Solar and SunEdison Inc. – plan to work with Indian partners to pump $6 billion into the country’s “green” energy sector this fiscal year alone.
Conveniently, an individual with significant experience in the U.S.-Indian solar energy business has just placed herself in a unique position to help shepherd such international deals. The Washington Free Beacon reports that Diane Farrell was named as a new member of the Board of Directors at Azure Power – a solar energy firm based in New Delhi – in a press release dated January 15, shortly before President Obama left for India. In addition to being a two-time Democratic candidate for Congress from Connecticut, Farrell also happens to be a former member of the Board of Directors of the Export-Import Bank.
The Free Beacon report – citing the Bank’s own board meeting minutes – notes that Farrell voted in 2011 to provide Azure Power with a loan of nearly $16 million to purchase solar panels from two American companies, one of which was First Solar. The following year, First Solar would face a congressional inquiry over questions of impropriety in loans they received from the U.S. Department of Energy.
Diane Farrell helped line up a taxpayer-backed Ex-Im loan to support a deal between Azure Power in India and First Solar in the United States. She now sits on Azure’s board, and First Solar remains a key player the Indian renewable energy market. When her former employers at the Export-Import Bank begin to dole out the promised $1 billion in new American financing for “green” energy in India, Diane Farrell and Azure will be in a prime strategic position.
And lest we forget, Ex-Im already has a sordid history in India. The bank provided millions in loan guarantees to Air India, which allowed the foreign carrier to push out domestic competitors – specifically Delta Air Lines – hurting U.S. workers.
With more capacity purchased with better financing deals that even American corporations can secure, the Ex-Im Bank is both manipulating the marketplace and engaged in crony capitalism that benefits a favored few.