Export-Import Bank foe criticizes Hollywood film loan guarantees
Hollywood has been dragged into the dispute over the fate of the Export-Import Bank, with a leading foe of the institution criticizing past loan guarantees for Hollywood movies.
The fiscally conservative Club for Growth, which has been pushing lawmakers to oppose the bank’s re-authorization, took aim Thursday at four independent films that received loan guarantees in 2002 for foreign distribution under a program that ended a year later.
The movies included “The United States of Leland,” starring Don Cheadle, Ryan Gosling and Kevin Spacey, about a troubled youth’s experiences in a juvenile detention center, and “High Voltage,” about “a military solar energy project gone awry,” according to a 2002 news release from the bank.
“Who the heck saw ‘The United States of Leland’ or ‘High Voltage’ and why were they financed with loans backed by the American taxpayer?” asked Chris Chocola, the president of the Club for Growth.
“The Export-Import Bank is like a bad horror movie about a creature from another world that can’t stop its gluttonous appetite for government subsidies,” he said. “The United States government should not be in the business of backing Hollywood films.”
The Club for Growth has been leading the charge against the Export-Import Bank, which helps finance the export of U.S. products and services. The bank’s authorization is set to expire in May.
The bank’s Film Production Guarantee Program was announced in 2000. It made only one loan guarantee, for the four films in 2002, before it was ended a year later because the bank’s new chairman did not want to continue it, said Phil Cogan, a spokesman for the bank.The loans were repaid.
The films, which also included “Lost Treasure,” about a reality TV game show, and “Global Effect,” about a lethal virus, were produced with loans of up to $5 million each by the Lewis Horwitz Organization, the bank said.
The Export-Import Bank guaranteed up to 90% of the portion of each loan that was secured by foreign distribution contracts. Independent producers often use foreign distribution contracts as collateral to finance films.
The Obama administration, backed by some major business groups, wants to gradually increase the Export-Import Bank’s lending capacity to $140 billion by 2015 from $100 billion. But some Republicans have been blocking the re-authorization, charging the bank is a form of crony capitalism that leads the government to pick winners and losers in the marketplace.
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