“Enron was a political colossus with a unique range of rent-seeking and subsidy-receiving operations. Ken Lay’s announced visions for the company—to become the world’s first natural-gas major, then the world’s leading energy company, and, finally, the world’s leading company—relied on more than free-market entrepreneurship. They were premised on employing political means to catch up with, and outdistance, far larger and more-established corporations.
– R. Bradley, “Enron: The Perils of Interventionism,” EconLib, September 3, 2012.
A debate is currently playing out over the future of the Import-Export Bank, which comes up for Congressional reauthorization this September. In “End Corporate Welfare? Start With the Ex-Im Bank,” Tim Phillips, president of Americans for Prosperity, a free-market advocacy group, pin-pricked the notion that small business was the beneficiary of taxpayer-guaranteed loans.
Every time Congress debates the Ex-Im Bank’s future, which last happened in 2012, defenders claim that it exists primarily to serve small businesses. The bank itself proudly proclaims this near the top of its annual reports. Yet … the bank doles out the vast majority of its funds to America’s biggest corporations. Last year, 10 companies—including giants like Boeing, General Electric, and Dow Chemical–received roughly three-quarters of the bank’s financial assistance for exports. A similar number of companies accounted for 97% of its loan guarantees by value, along with 97% of the bank’s direct loans by value.
So why do the Big Boys needed the average taxpayer to backstop their voluntary incurred indebtedness? Why should big and small companies be encouraged to invest in risky, non-bankable areas?
Ex-Im exposure today is estimated to be $134 billion, up from $60 billion eight years ago. Crony capitalism, helped along by Republicans and Democrats alike, is in the crosshairs of reformers across the political spectrum.
Enron: Bad Energy Investing via EXIM/OPIC
Enron International, specializing in infrastructure development in high-risk countries in the late 1980s and 1990s, depended on Export-Import Bank loans and Overseas Private Investment Corporation (OPIC) insurance and loans for most of its projects.
Enron’s total would exceed $2.5 billion from Ex-Im and $3 billion from OPIC. Enron also received $232 million in loan guarantees from the lesser known U.S. Maritime Administration. All totaled, nearly $6 billion. And not surprisingly, many of these investments were problematic, and none more so than the Dabhol Power Plant in India.
Summarized one Enron book:
Some of Enron International’s assets were almost comically awful, and others were fields of dreams. A power plant it built in China was never commercially operated. The Dominican Republic plant was padlocked for a time. The plant in Cuiba, Brazil, was hundreds of millions of dollar over budget. In Poland, there were difficulties getting the government to pay Enron for a plant it has built. A planned pipeline in Mozambique never happened, nor did a $500 million plant in Indonesia or a $200 million plan in Croatia. And that doesn’t even include the greatest debacle of them all–Dabhol, the $3 billion project that remains shuttered to this day . 
When the U.S. government threatened to not pony up at one juncture, Enron’s vice president of Global Finance, Linda Powers, warned Congress that Enron would find foreign support. And it did so successfully, gaining financial aid from the governments of the United Kingdom, Japan, Germany, Italy, France, Canada, and Belgium. 
Enron also received financial support of various kinds from other government agencies, including the World Bank’s International Bank for Reconstruction and Development, the International Development Association, the International Finance Corporation, and the Multilateral Investment Guarantee Agency.
So much for the fallacious, enduring belief that Enron was somehow a free-market company and evidence for the excesses of capitalism.
Free Market Time?
The FDR-created agency is “now kept on life support by the U.S. Chamber of Commerce and an in-crowd of current and retired Congressional Republicans and Democrats,” the Wall Street Journal editorial board wrote earlier this month.
There are plenty of good reasons to abolish the program, including the unhealthy incentive to make high-risk investments. Remember the government investments in Fannie Mae, Fisker Automotive, and Solyndra. Remember that the market picks winners to leave losers for government assistance. And remember Enron.
 Jim Vallette and Daphne Wysham, Enron’s Pawns: How Public Institutions Bankrolled Enron’s Globalization Game, Institute for Policy Studies, March 22, 2002, p. 24.
 Bethany McLean and Peter Elkind, The Smartest Guys in the Room (Portfiolio, 2003), pp. 259–260.
 Linda F. Powers, testimony before the Subcommittee on Internal Economic Policy and Trade, Committee on International Relations, U.S. House of Representatives, March 18, 1997. Quoted in Timothy P. Carney, The Big Ripoff (Hoboken, NJ: John Wiley & Sons, Inc., 2006), p. 209.
 Vallette and Wysham, Enron’s Pawns, p. 24.
 Ibid., pp. 18, 24.