Agency funding raises 'red flag'

[Career Prole]

What is this "Overseas Private Investment Corporation" critter?

WASHINGTON -- A government agency that helps U.S. businesses investing in developing countries has approved millions of dollars of loans to companies whose owners did business with Mafia figures and rebels in a bloody African conflict, records show.

The agency also awarded insurance to assist a company that is part of a Mexican energy conglomerate ordered by the U.S. Internal Revenue Service to pay more than $70-million (U.S.) in back taxes.

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OPIC agreed last fall to lend Globus $5-million to build a cold-storage warehouse in Moscow. OPIC did not know about Globus' court-documented ties to organized crime. Three men who pleaded guilty in the Mafia stock manipulation conspiracy -- Anthony Stropoli, James Labate and Salvatore Piazza -- were among Globus' initial private shareholders in 1996 and 1997, court and SEC records show.

Also, in 2003, OPIC agreed to a $25-million loan for a U.S. company owned by Jean-Raymond Boulle, whose company (known then as America Mineral Fields) has been cited by the United Nations for unethical business dealings with rebels in the Democratic Republic of the Congo's civil war.

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050627/IBOPIC27/TPInternational/Americas

Nearly all OPIC finance and insurance
goes to large corporations, such as Citibank,
Enron, Caterpillar Corporation, and Bechtel.
(For a list of all OPIC projects in the past four
years, see the Appendix.) Moreover, OPIC
largesse is heavily concentrated on a few
firms. As Table 1 shows, for fiscal years
1999–2002, the top 10 beneficiaries received
more than half of all OPIC support. In FY02,
the top 10 recipient firms of OPIC’s nearly
$1.2 billion largesse used up 87 percent of
those resources. It is difficult to believe that
the corporations on that list, whose combined
annual sales are in the hundreds of billions
of dollars, are unable to come up with
sufficient funding for worthwhile investments
without taxpayer support. If the
world’s richest corporations are unwilling to
assume the full risk of their investments, it
makes little sense to force taxpayers to do so.

http://cato.org/pubs/fpbriefs/fpb78.pdf