Ask massive and profitable U.S. companies why they need taxpayer-backed financing through the Export-Import Bank, and they'll tell you that without the subsidies, they will lose sales to foreign manufacturers.
"For the U.S. to close the Ex-Im Bank in this environment," warned a spokesman for Caterpillar, "is surrendering export markets and economic growth in the U.S."
But it's hard to swallow the claim that Ex-Im's deals are always crucial to American manufacturers winning the deal. For instance, this $15 million loan guarantee Ex-Im approved for Caterpillar to sell power-generating equipment to an exclusive Caterpillar dealer called Energyst Cat Rental Power.
Trailing only Boeing, Caterpillar is the No. 2 beneficiary of Export-Import Bank loan guarantees (if the buyer defaults, taxpayers cover the balance). One thing Caterpillar exports is power-generating equipment.
Energyst Cat Rental is a Dutch company that rents out Caterpillar power-generating equipment. That's what it does. Ex-Im calls Energyst Cat Rental "a Caterpillar-trademarked equipment rental operator." The company describes its connection with Caterpillar a bit more intimately: "Energyst Cat Rental Power is a pan-european company formed by Caterpillar and 10 of its Cat dealers to be the exclusive Cat dealer in Europe."
So, Energyst Cat Rental Power only deals in Caterpillar, and it was formed by Caterpillar and Caterpillar dealers. It even has "Cat" in its name. And when Energyst Cat Rental Power buys Caterpillar equipment, we're supposed to believe that the U.S. loan guarantee was needed for Caterpillar to win the sale?
Past Ex-Im financing approvals have been even more incestuous. In 2011, Ex-Im approved $455 million in taxpayer-backed financing for First Solar to sell solar panels to a solar farm in Canada -- that First Solar owned. Way back when Enron existed, Enron got Ex-Im financing to sell equipment to its own foreign subsidiaries.
ADDENDUM: Caterpillar sent me this reply:
"Energyst is an authorized rental power generation services provider that buys equipment directly from Caterpillar and rents the equipment to its customers. Caterpillar has less than 10 percent ownership in Energyst, and does not participate in the day-to-day management of the company. We cannot lose sight of the fact that the financing from Ex-Im Bank will not only support equipment purchases for temporary power generation projects in Africa and Latin America, but also support U.S. jobs and exports because the equipment used in these projects is manufactured in the United States."