Overseas Private Investment Corporation

The Overseas Private Investment Corporation was established by the Foreign Assistance Act of 1969 (Public Law 91-175), signed by President Richard Nixon on December 30, 1969, as an amendment to the Foreign Assistance Act of 1961 and codified at 22 U.S.C. 2191. The statute made it an agency of the United States "under the policy guidance of the Secretary of State," charged "to mobilize and facilitate the participation of United States private capital and skills in the economic and social development of less developed countries." Its first authorization ran to June 30, 1974. It began operating after "the President transferred rights and responsibilities... to OPIC" by Executive Order 11579 of January 19, 1971, taking over investment guaranty and promotion work previously done by the Agency for International Development.¹

Structure

The President and Executive Vice President of the corporation and the presidentially appointed members of its board of directors required Senate confirmation. The statute directed it to operate "on a self-sustaining basis" from its own fees and interest, while Congress set an annual cap on its administrative spending (62.8 million dollars for fiscal 2016). Its accounts followed the Federal Credit Reform Act of 1990.¹

ITT and Chile

The Allende government of Chile took over the Chilean telephone company of the ITT Corporation on September 29, 1971. ITT filed an investment insurance claim with the corporation for 92.5 million dollars. On March 16, 1973, the State Department's Executive Secretary, Theodore Eliot, informed Henry Kissinger that "OPIC's management" intended to recommend rejection of the claim on the ground that ITT's conduct, as disclosed in the papers published by Jack Anderson in March 1972, had been a "breach [of] its contract and prejudiced OPIC's rights." ITT was expected to answer that it had "done nothing improper in Chile" or had acted "at the request of the USG." The board, due to decide on March 19, 1973, deferred the decision.²

In the settlement of 1975 ITT received "$34,706,917 in cash and $59,384,697 in OPIC-guaranteed Chilean Government obligations."²

Antigua

In 1983 the corporation lent two million dollars to finance a melon farm established in Antigua by Maurice Sarfati, an Israeli businessman operating from Miami and Paris. The application was submitted by Roydan (Antigua) Limited. Before lending, the corporation asked for financial references, and Sarfati supplied them from his principal bank, the Miami office of the Bank of Credit and Commerce International, which wrote on June 14, 1983, that Sarfati, "who is one of our valued customers," held a number of major accounts there. The corporation lost its entire investment, concluded that it "had been defrauded by Sarfati," sued him, and sold its remaining interest in the farm, at a loss of 50 cents on the dollar, to Bruce Rappaport and his Swiss American Bank. The Senate Foreign Relations Committee's report described Rappaport as "a confidante of former CIA director William Casey" who was in frequent contact in the same period with Bert Lance, and noted that Alfred Hartmann, a principal BCCI director and chairman of its Swiss affiliate BCP, sat on the board of another Rappaport bank.³

In April 1989 a network of Israeli arms traffickers operating from Miami shipped 500 Israeli machine guns through Antigua, whose foreign minister had ordered them, for the use of members of the Medellin cartel. One was later used in the assassination of the Colombian presidential candidate Luis Carlos Galan, and several others were found in the possession of Jose Gonzalo Rodriguez Gacha after his death. The principals were Yair Klein, Pinchas Shahar and Sarfati. An inquiry for the government of Antigua was conducted by the Washington attorney Lawrence Barcella. The Senate report found that "the Antigua project had been outgrowth of the establishment of a 'melon farm' by Sarfati in Antigua in 1983." When the subcommittee sought BCCI's records on Sarfati in 1990, the bank's lawyers said the accounts were "missing." Most of the accounts of a partner in the venture, Haim Polani, were later located; those of Sarfati and his businesses were not.³