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Star Civic Economics - Page A1 Star

April 1, 1997

Ron Brown's Trade Trips Net Firms $5.5 Billions
$2.3 Millions Paid Directly to Democrat Party

By Staff Investigative Writers

WASHINGTON DESK - Commerce Department secretary Ron Brown helped U.S. firms get oversees contracts of $5.5 billion. However, the firms paid the Democrat Party more than $2.3 million in donations to get seats on U.S.trade missions. The Boston Globe reported Sunday that the Clinton administration gave about two dozen U.S. firms a multibillion-dollar commitment in federally guaranteed assistance from the Overseas Private Investment Corp (OPIC), in exchange for political contributions to the Democrats.

OPIC provides insurance and loan guarantees generally not available on the commercial market because of risk.

Citing a review of federal records, the Globe story reported all but three of 27 recipients donated to Democratic Party committees, with the donations ranging from $50,000 to $358,000. The average contribution to the Democrats from OPIC recipients on Brown's trips was nearly $95,000 and the average support the agency gave the 27 was about $200 million, the newspaper said.

Ron Brown died with 34 others on a trade mission to Bosnia when their Air Force plane crashed in April 1996. Four of the crash victims were executives with AT&T Bechtel Corp, Foster Wheeler Corp. and Harza Engineering.

During much of Clinton's first term, one of Brown's top associates, Jeffrey E. Garten, then undersecretary for international trade, served on OPIC's board of directors.

In addition, Brown attended several signing ceremonies for OPIC-supported projects, including a 1995 event with Palestinian leader Yasser Arafat for a bottled-water operation in the West Bank and Gaza involving Culligan Water Technologies Inc. of Illinois.

Rosen told reporters OPIC awards corporate support solely on the basis of a professional review process geared to '...using our limited resources in a careful and prudent manner.'

Much of the OPIC support for participants on Brown's missions was granted while the agency experienced what Harkin described to a House panel last year as '...an unprecedented demand for services.'

Brown died with 34 other people when the Air Force plane carrying them on a trade mission to Bosnia crashed into a mountainside in Croatia on April 3, 1996. Four of the victims were executives with companies that had received OPIC support: AT&T,Bechtel Corp., Foster Wheeler Corp., and Harza Engineering Co.

Commerce spokesman Jim Dessler said Commerce officials exerted no influence on the OPIC staff on behalf of trade mission participants or Democrat donors.

OPIC, whose federal funding is under fire from some lawmakers who consider it 'corporate welfare,' provides insurance and loan guarantees generally not available in the commercial market because of risks involved. Corporate recipients pay high insurance premiums and substantial loan interest, which has helped OPIC turn a profit every year since it was founded in 1971.

The agency received $104 million in federal funds last year and returned $209 million to the Treasury. The firms that went on Brown's trade missions received nearly 14 percent of OPIC's total financial commitment of $40.6 billion from 1993 to 1996, which included $34.5 billion in political risk insurance and $6.1 billion in financing.

The businesses on Brown's missions received about $3.5 billion in risk insurance and $2 billion in financing.

Among the companies that traveled with Brown, OPIC supported projects ranging from Pepsi Cola bottling in Poland to rocket engine development in Russia to cellular phone systems in Argentina, Hungary, India, and Nicaragua.

Administration officials said politics played no role in any funding decision. But campaign reform advocates were understandably dubious.


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