The Overseas Private Investment Corp. returns $100 million to the U.S. Treasury each year. The total was reported incorrectly on the Federal Page Tuesday. (Published 2/4/88)

When an obscure government agency becomes emeshed in a major political scandal, it often circles the wagons and shuns the news media.

Not the Overseas Private Investment Corp. (OPIC), a 130-person agency that provides political risk insurance and some financial services for U.S. companies investing in less-developed countries.

OPIC (pronounced O-pick) burst from obscurity over the weekend as the agency that blocked a request from a friend of Attorney General Edwin Meese III, E. Bob Wallach, that OPIC provide insurance on a $1 billion Iraqi pipeline project.

"That reflects how we do business here," said OPIC's president and chief executive officer, Craig A. Nalen, who invited a reporter for an interview an hour after his agency received a query for some information.

"We're not political. We make businesslike decisions. We are a great agency that nobody knows about," Nalen said.

OPIC's obscurity is upsetting to Nalen, who made a name for himself as a marketing man selling soap at Procter & Gamble, cereals at General Mills and gasoline additives at the STP Corp. When he was appointed OPIC chief early in the Reagan administration he found that only 5 percent of U.S. businessmen knew that OPIC existed. Even his mother, confusing OPIC with the better-known OPEC (Organization of Petroleum Exporting Countries), thought he worked for the oil cartel.

To change that, Nalen launched a $2-million-a-year advertising and marketing program to acquaint U.S. business with OPIC's services. But just as it was beginning to bear fruit, the Office of Management and Budget noticed and stopped the program, Nalen said.

While OPIC needs congressional authorization every three years, it operates at a profit and takes no taxpayers' money. Instead, it returns $100,000 a year in profits to the U.S. Treasury. Last year it insured 165 projects accounting for $1.5 billion in U.S. investments.

OPIC traces its history to U.S. efforts immediately after World War II to rebuild the ravaged economies of Western Europe through the Marshall Plan. The Marshall Plan offered U.S. companies insurance in case they were unable to get dollars back from their investments. The program was broadened in the 1950s to cover political risk insurance, including risks of expropriation, war and civil insurrections. In 1961, the Agency for International Development (AID) took over the insurance program and in 1971 OPIC emerged as an independent agency, structured more like a business than a government organization.

It long ago repaid startup costs to the government and maintains a $1 billion reserve to cover payouts. Since inception it has settled more than 220 insurance claims totaling almost $500 million.

OPIC gets its money from insurance and financing premiums, and from other countries on projects it has insured. As a government agency, OPIC often can collect from other countries when a private company cannot. It will only insure and finance projects in countries that have signed investment agreements; as far as OPIC was concerned, one of many problems with the pipeline project was that Iraq had not signed such an agreement.

Under its congressional charter, OPIC cannot insure or finance projects that will cost U.S. jobs, such as shifting production facilities to another country. It claims that projects it financed last year generated $2 billion in U.S. exports, mostly of American-made equipment that might have been purchased elsewhere if a U.S. company has not made the investment.

Still, OPIC faces continued attacks from organized labor, which feels that any overseas investment by U.S. companies takes away jobs.

It has also faced attacks from congressional liberals, headed by the late Sen. Frank Church (D-Idaho), who accused OPIC of subsidizing giant multinational corporations. A General Accounting Office study in 1977 found that 41 percent of OPIC insurance went to 11 multinational companies, with three -- Dow Chemical Co., W.R. Grace & Co. and J.P. Morgan & Co. -- accounting for 29 percent.

Since then OPIC has made a determined effort to find small and medium-sized U.S. companies who want to invest overseas, and last year more than one-third of OPIC-supported projects were done by small business.