AN EXPORT-ARMS BANK?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP69B00369R000100240004-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 15, 2016
• Document Release Date: April 13, 2004
• Sequence Number: 4
• Publication Date: July 21, 1967
• Content Type: NSPR

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Approved For Release 2004/05/05 : CIA-RDP69B00369R000100240004-5
An Export-,Arms , ank?
Some agencies of the Federal Government, it
would seem, are no longer what they appear to be.
The Export-Import Bank of Washington was
established in 1934 t
to assist in the. financing of
commercial exports. But last January the alert
staff of the Senate Foreign Relations Committee
reported that the Eximbank had "taken an active
interest in the financing of military export sales."
And now, on examination and questioning by the
Housey Banking Committee, it appears that fully
36 per cent of the Eximbank loans in the fiscal
years 1966-67 were for arms.
The nearly $1.6 billion of arms credits extended
by the Eximbank since 1963 fall into two cate-
gories. Medium term loans were made to industrial
countries. Italy and Austria were beneficiaries of
that program in 1963, a time of great tension over
the disputed South Tyrol. Then there are the guar-
anteed "country X" loans, arranged on behalf of the
Defense Department, principally for- the underde-
veloped countries of Latin America.
The single justification for these surreptitious
operations-the argument that loans rather than
grants result in smaller balance-of-payments def-
icits-does not in any way diminish the threat to
democratic institutions. The House.Banking Com-
mittee, which is supposed to supervise the Exim-
bank, was never informed of the military loans.
Indeed, that Committee was placed in a position
similiar to that occupied by the National _SiJWQt
Association in its relationship with the p.".
What is worse, the Eximbank loans were used
to circumvent the $55 million ceiling on annual
arms exports to Latin America imposed by the
Senate. In fact, the Eximbank lent as much as
$50 million to individual South American countries.
. In the ensuing embarrassment, Senator Ellender
recom}nended that the Eximbank be prohibited
from extending "country X" loans in the underde-
veloped parts of the world, but be permitted to'
continue with its developed country programs.
That compromise fails to get to the heart of the
matter and should be roundly rejected. The Exim-
bank, as Representative Henry S. Reuss observes,
has managed within four years to become em-
broiled on both sides of almost every armed con-
flict, actual or potential. Permitted to continue
in that insidious role under the cloak of secrecy, it
would constitute. ta . r sentative
pace. _,
government and
Approved For Release 2004/05/05 : CIA-RDP69B00369R000100240004-5