Beck dusts off discredited Brazilian loan falsehood to smear Obama, Soros over drilling moratorium

Glenn Beck leveled the outrageous claim that the Obama administration's drilling moratorium is part of a plot to enrich George Soros through increased oil drilling in Brazil. Beck's charge rested on the completely discredited claim that the Obama administration loaned $2 billion to Brazil, which called “bogus” in September.

Beck outrageously charges Obama with conspiring to enrich Soros through drilling moratorium, loan to Brazil

Beck: "[T]he Obama administration is now lending $2 billion to" Brazil for offshore drilling. On his June 17 Fox News show, Beck criticized the moratorium on new offshore drilling, stating: “If your job isn't more secure and your energy isn't cheaper, who wins? Because you're not. Who does? Well, the usual suspects.” Beck mentioned drilling offshore in Brazil and claimed:

Again, George Soros has nothing to gain from this. He's just telling the president what to do through the Center for American Progress. The Soros Fund Management LLC, I guess we should tell you this, holds a stake in Petrobas [sic], that is the oil company of Brazil, in the amount of $900 million as of December 31, 2009. Petrobas, theBrazilian oil company that the Obama administration -- get this -- the Obamaadministration is now lending $2 billion to. You ready? Wait for it. What is the $2 billion going for? To perform offshore drilling in Brazil.

Bush appointees at Export-Import bank unanimously approved loan to Brazil

Loan approved by Bush-appointed bank board. As noted in September 2009, the “bogus” claim can be traced to an email that was circulating at the time. FactCheck called the claim “bogus,” noting that the Export-Import Bank of the United States approved a “preliminary commitment” to Brazil to finance “their purchases of U.S. equipment, products and services.” At the time, “the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush.”

From the FactCheck article:

This claim stems from a “preliminary committment” made back on April 14 by the board of directors of the Export-Import Bank of the United States. The bank intends to loan up to $2 billion to finance exports to the Brazilian oil company Petróleo Brasileiro S.A., known as Petrobras, over the next several years.

The e-mail is false on two counts.

  • The message falsely says the decision was due to an “executive order” by the president. No presidential order was required. Furthermore, none of President Obama's appointees had joined the Ex-Im board at the time of the vote, which was unanimous, and bipartisan. The Ex-Im Bank states: “In fact, at the time the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush.”
  • The message falsely claims that “we have absolutely no gain” from the loan. In fact, the loan is being made specifically to finance purchase by Petrobras of U.S.-made oilfield equipment and services. The mission of the Ex-Im Bank is to encourage exports by making such loans.

The bank's chairman and president, Fred P. Hochberg, underscored the purpose of the loan during a trip to Brazil at the end of July:

Ex-Im Bank President Hochberg, July 29: I chose Brazil as my first international destination for good reason: Brazil is a powerhouse among South American economies and offers tremendous opportunities for U.S. exporters in many sectors. I want Brazilians to know that Ex-Im Bank has the will and the capacity to finance their purchases of U.S. equipment, products and services.

Loan reportedly will create American jobs and provide “strategic benefits” to U.S. energy security

Ex-Im spokesman: “This is the government doing what it's supposed to do: Create jobs.” An August 19, 2009, blog post by Politico's Ben Smith reported on Export-Import Bank spokesman Phil Cogan's response to similar criticism made by Fox News' Sarah Palin:

A spokesman for the bank, Phil Cogan, noted to POLITICO that the bank does not rely on tax money and that Palin's statement ignores the bank's central function: To lend money to foreign companies for the purchase of American goods and services.

“It has to be produced by U.S. workers,” Cogan said. Palin's statement refers to “creat[ing] jobs and health benefits in the U.S.”

“That's exactly what a purchase financed by the U.S. government would do,” Cogan said.

In this case, Cogan said, the proposed loan would likely finance engineering services, sales of ships to service oil platforms, or drilling equipment.

Even IBD said “the investment has both practical and strategic benefits for our energy security.” An August 12, 2009, Investor's Business Daily editorial stated: “We'll admit that, on first blush, spending such money overseas when we've got plenty at home sounds a little questionable. But the investment has both practical and strategic benefits for our energy security.” The editorial continued:

First, the U.S. money is a loan, and Brazil has excellent credit with an investment-grade BBB sovereign rating and a record of responsible borrowing. Whatever we loan the Brazilians will be paid back on time and with interest.

Second, the cash will encourage Brazil's state oil company, Petrobras, to contract with American businesses. And we aren't just talking about oil companies, but software, steel, research, environmental impact and engineering concerns, to name a few others.

Beck's Soros connection also discredited

Soros sold stock before Ex-Im bank loan. The FactCheck article also addressed the claim that the loan was intended to financially benefit Soros. From

The message claims that George Soros would “benefit most” from the loan, but that is also a baseless accusation. Soros is a favorite whipping boy of conservatives because of his early financial help to the liberal group And he is indeed a major investor in Petrobras, through his New York-based hedge-fund firm, Soros Fund Management LLC. But the hedge fund recently sold 22 million shares of common stock in the company (which carry voting rights) while buying 5.8 million shares of preferred stock (which is non-voting.) As reported by Bloomberg News, Soros reduced his stake in the company before any of the Ex-Im Bank's promised loan has been dispensed.