WASHINGTON – Key U.S. senators said they want more oversight of the Overseas Private Investment Corporation, the federal government’s development finance agency that was the subject of an Associated Press investigation earlier this week into a failed $217 million energy project in western Africa marked by insider connections and questionable due diligence.
The AP’s review put renewed attention on oversight of the federal agency. Last year, legislation that would have created the position of an inspector general inside OPIC, part of larger legislation known as the Energize Africa Act, failed to pass Congress. Bill co-author Sen. Bob Corker, R-Tenn., the new chairman of the Senate Foreign Relations Committee, continues to support the measure. A committee aide said the effort carries broad support.
OPIC, which has an annual $3 billion portfolio, itself supports the creation of an independent IG, a spokesman told the AP.
“We hope it passes,” agency spokesman Charles Stadtlander said.
An inspector general office could bring enhanced scrutiny to a federal agency that its own president, Elizabeth Littlefield, has called it government’s “best-kept secret.”
OPIC has an Office of Accountability, but the independent office, created in 2005 to examine complaints, has produced reports on just five cases since its inception. The former accountability director served through September to finish a detailed review of the Liberia project; the position has been vacant since, though OPIC said it intends to fill the slot.
Under law, the inspector general of the U.S. Agency for International Development can conduct reviews of OPIC “as may be necessary.” But the USAID reviews have been limited, usually a one-page annual summary of OPIC’s compliance with a federal information security act.
“Inspectors general are the eyes and ears of taxpayers in our federal agencies and are crucial in our effort to hold agencies accountable and ensure they’re operating efficiently and effectively,” Sen. Claire McCaskill, D-Mo., ranking member of the Permanent Subcommittee on Investigations, said in a statement. She said every agency should be subject to the same standard.
McCaskill held hearings to increase oversight of OPIC and other agencies in December 2013.
OPIC provides loans, loan guarantees and political risk insurance, funding projects that stretch across continents and industries. In recent years, it has sharpened its focus on renewable energy. Sometimes, its projects trigger protests abroad.
One ongoing example: A massive hydroelectric power project the agency is supporting in Chile.
When OPIC sought public comments on potential social and environmental impacts of the 531 megawatt run-of-river hydroelectric power plant near Santiago, no comments came in.
In September 2013, with little fanfare, OPIC approved a $245 million loan to a Chilean subsidiary of the Virginia-based AES Corporation, a key piece of financing for the $2 billion project.
Yet in Santiago, the hydro plant, due to be operational in 2018, has triggered street protests, government sit-ins, even heckling of the president. Critics fear the project could threaten Santiago’s water supply, a concern OPIC and the Fortune 500 company said was unfounded.
Ultimately, the friction reveals a telling truth about OPIC: An agency that receives limited attention at home helps fuel projects with major consequences overseas.
Associated Press staff writer Luis Andres Henao contributed to this report from Santiago, Chile.