Stand up for the facts!
Our only agenda is to publish the truth so you can be an informed participant in democracy.
We need your help.
I would like to contribute
Saturday night, Congress approved a $1.1 trillion spending bill to fund the government through September. It passed with bipartisan support, but not without criticism from both Democrats and Republicans.
On Fox News Sunday Dec. 14, Michael Needham, CEO of conservative activist group Heritage Action, said he was disappointed that Congress approved such a massive spending bill, with what he sees as irresponsible provisions.
"They put forth one of the worst pieces of legislation," Needham said. "A $1.1 trillion spending bill that has a carve out for Blue Cross Blue Shield, has a carve out for Wall Street. Reauthorizes something called the Overseas Private Investment Corporation, which provides taxpayer-backed loans so that the Four Seasons Hotel can build a resort in Turkey."
We were curious about the last part of Needham’s claim -- that the Overseas Private Investment Corporation (OPIC), a government institution, financed a Four Seasons hotel in Turkey.
When we reached out to Needham, his communications team told us that he misspoke -- he meant to say Ritz-Carlton, not the Four Seasons. We consider that to be a minor error that doesn’t distort Needham’s point because both are luxury hotels.
That flub aside, we found that Needham’s claim is on target. It is, however, a narrow portrayal of what OPIC does.
The hotel in Istanbul (not Constantinople)
What’s OPIC? It’s a finance institution run by the federal government. Like a bank, it finances loans with interest and offers political risk insurance.
What separates OPIC from other finance institutions, though, is that it helps American businesses break into developing economies -- places where a business might struggle to find private investment locally. For example, OPIC likely wouldn’t back a project in a wealthy country like Austria, where there is plenty of capital available. They would be much more likely to back a project in sub-Saharan Africa.
In 2013, OPIC lent $3.75 billion, according to a press release. For 37 consecutive years, the agency has generated a net income for the United States Treasury by collecting interest off its loans and insurance premiums.
Supporters say OPIC fosters economic growth in developing nations and benefits American businesses. Opponents, such as Needham, see OPIC as corporate welfare and misuse of tax dollars.
(The Four Seasons, we should note, does have a luxury hotel in Istanbul, but OPIC did not finance it.)
According to annual reports, OPIC regularly finances hotels and tourism -- in addition to an array of other industries such as manufacturing, renewable energy and agriculture. In 2013, OPIC financed construction of a hotel in South Sudan, as well as hotel expansions in Armenia and the nation of Georgia. Since 2000, the organization has also financed hotels in Iraq, Afghanistan, Uzbekistan, Liberia, Guatemala, South Africa and more.
OPIC spokesman Charles Stadtlander told PolitiFact that the Ritz-Carlton in Turkey is "well on its way to paying its loan back with interest."
Stadtlander said, though, that Needham mischaracterized the hotel by calling it a "resort." He said it is a business-oriented hotel that was built with the idea in mind of bringing CEOs, foreign ministers and investors to Turkey, keeping with OPIC’s economic development mission.
The hotel is an "essential piece of business infrastructure," Stadtlander said.
Needham said OPIC "provides taxpayer-backed loans so that the Four Seasons hotel can build a resort in Turkey."
The Ritz-Carlton, not the Four Seasons, received a $50 million OPIC loan to build a hotel in Istanbul in 2000. While Needham got the name of the hotel chain wrong, we think most people would forgive mixing up two high-end hoteliers.
That said, talking about building hotels overseas doesn’t give the full picture of what OPIC does.
We rate his claim Mostly True.
Fox News Sunday, Dec. 14, 2014
OPIC, annual reports, 2000-2013
OPIC, 2000 annual report, accessed Dec. 14, 2014
Washington Examiner, "Republicans try to sneak corporate welfare agency OPIC through the House," May 6, 2014
Heritage Action, "NO on the Electrify Africa Act of 2014," May 7, 2014
Phone interview, OPIC spokesman Charles Stadtlander, Dec. 14, 2014
Email interview, Heritage Action spokesman Dan Holler, Dec. 14, 2014
Email interview, Robert Kudrle, international economics professor at the University of Minnesota, Dec. 14, 2014
Email interview, Michael Klein, international economics professor at Tufts University, Dec. 14, 2014
Read About Our Process
In a world of wild talk and fake news, help us stand up for the facts.