Enron solicited government loans to reach global market

WASHINGTON -- As Enron Corp. reached for markets overseas, power plants it helped build from Guatemala to India received $1.2 billion in government-backed loans from two U.S. agencies.

The Overseas Private Investment Corp. is owed $453 million from the Enron-related projects while the Export-Import Bank is due $512 million. "They're definitely among our top 10 borrowers," OPIC spokesman Larry Spinelli said.

Though Enron is now bankrupt, four of its projects financed by OPIC are making its payments on time. Regarding a fifth project, Enron and two other U.S. corporations are seeking to have OPIC pay off a huge insurance claim.

When it filed for bankruptcy in December, Enron was pursuing OPIC help on two projects in Brazil. Those applications have been abandoned.

Enron's relationship with the government is part of a two-pronged business strategy. Inside the United States, Enron has sought to free energy companies from government regulation. Internationally, Enron has embraced Washington's help in the form of federally backed loans and insurance protection.

The irony is not lost on congressional critics.

OPIC "gave hundreds of millions of dollars in loans and other support to Enron-related projects during the Clinton administration," said Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee who recently obtained records showing Enron-related projects received $544 million in loans from OPIC.

Not in jeopardy

Separately, the Ex-Im Bank made more than $650 million in loans to Enron-related projects overseas.

"These projects obviously were a tremendous benefit to Enron's operation. The disclosure of this sheds light on the government's actions in support of Enron over the years," Grassley added.

Enron's bankruptcy does not place the loans in jeopardy. Separately created corporations handled the overseas projects for Enron and other U.S. companies.

OPIC and Ex-Im loans are backed with the full faith and credit of the U.S. government.

Though it has just 200 employees, OPIC has deep pockets -- a $4 billion reserve that comes from the user fees U.S. businesses pay for its loans and insurance. OPIC operates at no net cost to U.S. taxpayers -- the business fees cover its costs -- and earned $215 million last year.

OPIC's loan and insurance portfolio totals $14 billion; the Ex-Im Bank's portfolio exposure is $62 billion.

A financially troubled Enron plant in India -- financed in part with OPIC loans -- is cited by congressional critics who say the company got too much government help.

OPIC provided $160 million to Enron and two other corporations to help build the $2.9 billion Dabhol plant. It stands idle because prospective customers do not want the power.