Sen. William Proxmire (D-Wis.), the ranking minority member on the Senate Banking Committee, has asked the Export-Import Bank to suspend financing of two major aircraft sales contracts until the General Accounting Office completes an investigation into the terms of the sales.
The letter, dated March 23 and addressed to Chairman John L. Moore Jr., cites as reasons for delaying the loans a report that appeared in last Sunday's Washington Post and similar reports to his office concerning formerly undisclosed terms of the sales.
At issue is whether Boeing Co., the manufacturer of the planes, used the federally subsidized loans to extend amount of credit to the airlines purchasing the aircraft that were larger than the cost of the planes, their installed engines and other items enumerated to the bank in the preliminary loan application.
The Ex-Im Bank loans were to help finance the Boeing planes sold to El Al Airlines of Israel and to Ansett Transport Industries, an Australian airline co-owned by financier Rupert Murdoch.
"I believe the public interest requires that upon completion of the GAO report, Ex-Im re-examine the loans to determine whether approval or denial is the appropriate course of action," Proxmire wrote.
Yesterday, Sen. John Heinz (R-Pa.), chairman of the subcommittee on international finance, joined Proxmire in calling for a review of the loan.
Saying the Ex-Im Bank board would be "well advised to honor" Proxmire's request, Heinz added: "I think it would be a good idea for the new chairman to look at the whole Ansett financing arrangement."
President Reagan nominated William H. Draper III to replace Moore as the bank's chairman. Moore, who was appointed by President Carter, negotiated the controversial Ansett loan.
The El Al loan was referred to Congress on March 5; the Ansett loans, on March 12. Both have been approved by the bank. Congress has 25 days from the referral dates to raise any final questions about loans before the bank releases the funds.
As part of a loan package to Ansett, the Ex-Im Bank lent $200 million to the airline at an annual interest rate of 8 percent, repayable over 10 years, to finance the purchase of five Boeing 767 aircraft.
Of that amount, Boeing allegedly has extended credit to Ansett of $16.5 million. General Electric Co., which manufactures the engines for the 767, allegedly credited Ansett with $17.7 million.
The banking committee is questioning whether the bank was unknowingly financing the credit for vaguely described purposes at subsidized rates, when it thought it specifically was financing planes, engines and other items listed in the loan application, including pilot training, extra engines and ground-support equipment.
In the case of El Al, the loan from the Ex-Im Bank to finance the purchase of Boeing planes was $230.1 million. Several sources reported that the credit memo from Boeing to El Al was for $17 million.