Ed Royce: “I want to recognize Subcommittee Chairman Sherman for his work on this legislation. He worked this bill thoroughly, and…”

“I want to recognize Subcommittee Chairman Sherman for his work on this legislation. He worked this bill thoroughly, and while we disagree on OPIC's merits, he supported my text to reform its investment funds. OPIC's investment funds, as some may remember, have a troubled history. In the 1990s, then-OPIC president Ruth Harkin said, ``If you're an investor in an OPIC-supported fund, the worst you can do is get your money back at the need of 10 years.'' That's not the free market OPIC professes to support and not surprisingly, these funds were subject to political cronyism. There have been reforms to the funds of late, including competitively selecting fund managers, but we should mandate them. My language does this. Fundamentally though, I remain unconvinced that OPIC is doing something worthwhile that the private sector wouldn't do. The burden of proof should be on OPIC, especially in times of accelerating change in financial markets. Several companies have jumped into the political risk insurance business, for example, offering increasingly sophisticated products, . . . so why are we reauthorizing government-backed OPIC to continue competing against them? We have heard much on the floor trumpeting OPIC's supposed benefits. However, most economists believe that subsidizing investment--which is what OPIC does--merely shifts it around, often to lesser productive locations and uses.”