Chairman John L. Moore Jr. of the Export-Import Bank of Feb. 26 tried to convince members of the bank's board to approve of $657 million low-interest loan to an airline controlled by Australian Rupert Murdoch, according to members of the board.
The loan was to enable Murdoch's airline to buy planes manufactured by Boeing Co. rather than competitive airliners built by a European consortium. b
Moore, a former Atlanta attorney appointed to the Ex-Im post by President Carter, made his proposal a week after Murdoch visited the president. Two days after the visit, the Murdoch-controlled New York Post became the first big city newspaper to endorse Carter's re-election.
The Carter administration and other persons familiar with the board's operation have denied any political motivation in Moore's proposal. Moore, who currently is abroad, was unavailable for comment.
The Feb. 26 proposal was rejected by a vote of 2-1, with Moore favoring it and two other members -- Margaret W. Kahliff and Thibaut de Saint Phalle -- opposing.
On Feb. 28, after the Ex-Im staff completed research requested by the two opposing members, a more modest plan was presented to the board. After further modification all four members of the 5-person board that were there that day voted for the loan, which amounted to about $290 million at about 8.2 percent annual rate of interest.
The Ex-Im grew out of the need by Murdoch's airline, a subsidiary of his Ansett Transport Industries, to remain competitive with another domestic Australian carrier, Trans Australia.
In his Feb. 26 proposal, Moore reported that TA had made a firm order for a dozen A-300 planes manufactured by Airbus Industrie, a European combine.
Airline experts say that in Australia, TA and Ansett maintain the same routes, time schedules and like aircraft. Thus, in this unusual set-up, Ansett felt compelled to buy new planes to match TA.
Boeing is manufacturing a new line of aircraft, the 767, to compete with the popular Airbus. Boeing had tried, and failed, to get TA to order the developing 767, instead of the Airbus, which is already being delivered. Rejected by TA, Boeing aggressively sought the Ansett business.
But without favorable financing -- which European governments offer the Airbus manufacturer to spur exports -- Ansett could not afford to buy the Boeing 767s. As a result, Ansett and Boeing sought help from the Ex-Im Bank.
Ex-Im can only offer particularly favorable financing to meet foreign competition for U.S. products. After the initial Feb. 26 proposal was rejected, the Ex-Im staff learned that TA had made a firm order for only four Airbuses -- rather than the 12 that Moore had claimed when he was pushing for the $657 million loan.
The final loan, which was hammered out on Feb. 28, matched the seating capacity in the four airbuses with 5 of the smaller 767s. The loan to finance the four 767s was for about $200 million at an annual interest rate of 8 percent.
According to board member de Saint Phalle, Ex-Im sought to "sweeten" the deal by offering Ansett a package. If the airline agreed to buy the four 767s, Ex-Im offered favorable financing on an additional 4 Boeing 727s and 9 Boeing 737s.
The total Boeing package, for which Ex-Im puts up about $290 million at an average annual rate of about 8.3 percent, was accepted by Murdock on Monday at Ansett's Melbourne headquarters.
Ex-Im is advised on policy matters by the National Advisory Council, made up of representatives from the Treasury and State Departments and the Federal Reserve.
An aide to the council, who was a part of the Ansett negotiations, claimed there was no politics involved in the loan. He said that the fact that Murdock ate lunch with Carter on Feb. 19 -- after meeting with Moore at Ex-Im followed by the N.Y. Post endorsement -- "couldn't have affected us one bit."'
The Ansett loan, because of its size, must get Senate approval before it is granted. Senate Banking Committee Chairman William Proxmire (D-Wisc)., who has been critical of the favorable terms extended by Ex-Im to facilitate aircraft sales, is expected to look closely at the Ansett deal.
Moreover, Ex-Im's budget already is under security by appropriations committees in both houses. In February, a Senate international finance subcommittee rejected Ex-Im's proposed 1981 budget, calling for a more complete accounting of spending plans.So far, a new budget has not been submitted.
One subcommittee aide notes there is considerable frustration on the Hill over the administration of Ex-Im. He added that if politics did, in fact, play a role in the loan to Ansett, it could be a serious blow to the already troubled export bank.
"Nobody in Congress -- including members of Carter's own party -- is going to be happy with any politicalization of Ex-Im," he said.