September 26, 2002
Contact Jim Vallette: 646-522-1605

World Bank's Corporate Fossil Fuel Welfare Kings Revealed in New IPS Study

(Washington, D.C.) A new study by the Institute for Policy Studies shows that many energy corporations facing government investigation here and abroad have leveraged billions of dollars in World Bank Group financing over the past decade. Out of the top 15 corporations involved in the World Bank energy and power sector over the past 10 years, most are being investigated here and abroad for alleged accounting irregularities, energy market manipulation, fraud, bribery, human rights abuses, or other practices.

Over three-fourths of the World Bank Group's energy sector lending is targeted at oil, gas and coal extraction, combustion, and related infrastructure. Fossil fuel corporations benefitted from over $24 billion in World Bank financing between 1992 and August 2002. The Banks' fossil fuel portfolio, IPS estimates, will generate roughly twice as much carbon dioxide (a potent greenhouse gas) as human industry produced worldwide in the year 2000.

The World Bank's fossil fuel kingdom is replete with names from this year's corporate scandal rap-sheet. Among the notables:

1. Halliburton (#2 beneficiary of WBG fossil fuel financing at $1.97 billion) most benefited from World Bank largesse and U.S. government financing while Vice President Dick Cheney was CEO. Halliburton's accounting practices are under investigation by the U.S. Securities and Exchange Commission.
2. Enron (#11, $967 million) cultivated and demanded close relationships with the World Bank Group. Its continues to seek public financing for Enron Global projects, despite Chapter 11 Bankruptcy proceedings for Enron Energy Services in the US.
   
3. El Paso Corporation (#5, $1.5 billion), the largest pipeline company in America, has been found by FERC to have illegally manipulated the energy markets in California, profiting immensely at taxpayer expense. California is seeking $3.7 billion in damages.
4. Accounting practices and executive excesses have placed General Electric (#9, $1.1 billion) on the corporate hot seat.

Other recently-scrutinized corporate beneficiaries of World Bank fossil fuel financing include Harken Energy (President Bush's old company), CMS Energy (in the news this week for its "wash trades" with Dynegy), AES (the California energy scandal has sent its value tumbling), and Unocal (which a federal court this month ruled could be liable for human rights abuses associated with its Burma gas venture). Big oil corporations, including Shell, ChevronTexaco, ExxonMobil, and BP-Amoco are other big winners of World Bank backing.

A global energy privatization strategy hatched in the Reagan Administration came to fruition at the World Bank in the 1990s, and oil, power plant, and coal companies -- particularly those based in the United States -- flourished in new markets, claimed the study's author. Of the top 20 corporations that benefited from World Bank energy and power projects, 14 are headquartered in the USA.

"Ten years after the Rio Earth Summit, the World Bank is still changing the earth's climate for business. It is the tallest tree from which these rotten corporate apples fall," said Jim Vallette, author of the newly-relased study, and research director of IPS's Sustainable Energy and Economy Network (SEEN).

Vallette said a select number of companies leveraged World Bank and IMF's efforts to open African, Asian, and Latin American fossil fuel sectors into massive revenues. "If we connect the dots, between Enron, El Paso, Halliburton and others, the picture reveals these companies experienced explosive growth as they entered regions where the World Bank demanded deregulation and privatization," he charged. "The Bank's fossil fuel portfolio has nothing to do with poverty-alleviation, and everything to do with corporate welfare in the name of development and globalization," said Vallette.

For a complete list of corporate recipients of World Bank fossil fuel lending, click here.

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