Glenn Beck smeared President Obama and George Soros with the conspiracy theory that the Gulf drilling moratorium is intended to enrich Soros, and that the American people are "getting screwed." Beck's conspiracy theory rested on falsehoods and absurdities, and included the suggestion that Soros would have Beck killed for advancing the claim.
Beck lays out conspiracy theory riddled with falsehoods and absurdities
Beck: Drilling moratorium intended to help Soros get rich while the American people are "getting screwed." During his Fox News show, Beck questioned whether Soros "knew that the administration would be making a $2 billion preliminary commitment" to Brazilian oil company Petrobras "just days after he strengthened his investment. Isn't that weird?" Beck further said that "in a completely unrelated story, BP has the oil spill," later saying, "Then Obama suspends the deepwater drilling at 1,500 meters. He says 'Hey, hey, that's dangerous! Fifteen hundred meters, that's crazy.' Petrobras is drilling at 2,777 meters. Obama knows it and loans $2 billion to Petrobras. Last stop, Petrobras shareholders get rich," and "You, getting screwed."
From the June 21 edition of Fox News' Glenn Beck:
BECK: I'm not sure if he knew that the administration would be making a $2 billion preliminary commitment for Petrobras, for Petrobras, for exploration, just days after he strengthened his investment. Isn't that weird? You see, he's got some connections here, but I'm sure he had no idea what was coming on the other side of the circle? No. It's probably just another one of those bad luck situations for Obama, because this doesn't seem to pass the smell test at all. No. Billionaire investor dumps money into a state-controlled Brazilian oil company; days later the American administration dumps $2 billion into the exact same company. What are the odds, Gilligan?
Let's go here. George Soros starts the Center for American Progress with John Podesta. John Podesta, Center for American Progress, selects the Obama transition team. Soros buys $900 million in gasoline powered bras. Then, in a completely unrelated story, BP has their oil spill. But wait a minute, who's this guy? John Podesta. John Podesta is the guy who does all the lobbying for BP? Certainly -- I'm sorry, Tony Podesta -- certainly no relation to John Podesta, other than they're brothers. We'll have to come back to that one later in the show. So then Center for American Progress starts to make Obama policy. This one, we'll show you, laid out by Bloomberg and The Wall Street Journal. One of the policies: cap and trade, which goes right to Crime Inc. and all of the Obama friends with the Climate Exchange in Chicago. That's weird.
Then Obama suspends the deepwater drilling at 1,500 meters. He says "Hey, hey, that's dangerous! Fifteen hundred meters, that's crazy." Petrobras is drilling at 2,777 meters. Obama knows it and loans $2 billion to Petrobras. Last stop, Petrobras shareholders get rich. Oh my gosh, we're back at the beginning: shareholder, Petrobras. Getting rich. You getting screwed. You see how this works?
Beck: "I do have a bulletproof car, George. I just want you to know." Introducing his conspiracy theory, Beck said:
BECK: Gasoline Brazil. Now why am I telling you about this? Have you heard of another word? Soros. George Soros. I do have a bulletproof car, George. I just want you to know.
George Soros -- I'm going to show you this tonight. I'm going to spend an hour on this. I want you to DVD, write down, take notes, look into this. We're going to be talking a little bit about this in the next few days. This is -- I like to call it the circle of life, as it is now understood in America. [Glenn Beck, 6/21/10]
Beck's conspiracy theory hinges on false claim that Obama issued loan to Petrobras
Beck: "Petrobras is drilling at 2,777 meters. Obama knows it and loans $2 billion to Petrobras." Beck's entire conspiracy theory relies on the completely discredited falsehood that the Obama administration loaned $2 billion to Petrobras. Beck claimed that "the administration" was "making a $2 billion preliminary commitment for Petrobras, for Petrobras, for exploration," and claimed "Petrobras is drilling at 2,777 meters. Obama knows it and loans $2 billion to Petrobras."
Bush appointees at Export-Import bank unanimously approved loan to Brazil
Loan approved by Bush-appointed bank board. As FactCheck.org noted in September 2009, the "bogus" claim that Obama "loan[ed] $2 billion to Petrobras" can be traced to an email that was circulating at the time. FactCheck called the claim "bogus," noting that the Export-Import Bank of the United States approved a "preliminary commitment" to Brazil to finance "their purchases of U.S. equipment, products and services." At the time, "the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush."
From the FactCheck article:
This claim stems from a "preliminary committment" made back on April 14 by the board of directors of the Export-Import Bank of the United States. The bank intends to loan up to $2 billion to finance exports to the Brazilian oil company Petróleo Brasileiro S.A., known as Petrobras, over the next several years.
The e-mail is false on two counts.
- The message falsely says the decision was due to an "executive order" by the president. No presidential order was required. Furthermore, none of President Obama's appointees had joined the Ex-Im board at the time of the vote, which was unanimous, and bipartisan. The Ex-Im Bank states: "In fact, at the time the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush."
- The message falsely claims that "we have absolutely no gain" from the loan. In fact, the loan is being made specifically to finance purchase by Petrobras of U.S.-made oilfield equipment and services. The mission of the Ex-Im Bank is to encourage exports by making such loans.
The bank's chairman and president, Fred P. Hochberg, underscored the purpose of the loan during a trip to Brazil at the end of July:
Ex-Im Bank President Hochberg, July 29: I chose Brazil as my first international destination for good reason: Brazil is a powerhouse among South American economies and offers tremendous opportunities for U.S. exporters in many sectors. I want Brazilians to know that Ex-Im Bank has the will and the capacity to finance their purchases of U.S. equipment, products and services.
Beck's conspiracy theory rests on distorting Soros' investments in Petrobras, timing of loan
Beck falsely claims loan was issued "Just days after [Soros] strengthened his investment." Beck said that Soros Fund Management LLC had "$900 million invested" in Petrobras and that the loan occurred "just days after he strengthened his investment." Beck asked, "Isn't that weird?" Beck also said that the purported connection between Soros, the Obama administration, Petrobras, and the moratorium on some drilling in the Gulf of Mexico "doesn't seem to pass the smell test at all." He summarized the supposed timeline: "Billionaire dumps money in Brazilian oil company; days later the American administration dumps $2 billion in the exact same company. What are the odds, Gilligan?"
Soros decreased his investment in Petrobras before any loan funds were distributed
Soros investment in Petrobras reached $900 million in 2008 -- months prior to Export-Import Bank loan, not "just days." According to a February 17, 2009, Market Watch article, Soros "reported that during the fourth quarter [of 2008] he increased his already considerable stakes in Brazillian state-controlled oil company Petroleo Brasileiro SA [emphasis added]." The article further reported, "Soros, through his Soros Fund Management LLC, reported holding 36.8 million American depositary receipts of the Brazilian oil company known as Petrobras as of Dec. 31  -- a holding valued at about $900 million at the time." The Export-Import Bank issued its preliminary commitment on April 14, 2009.
Soros reportedly sold 5 million shares in the first quarter of 2009, before the loan was announced.* A May 15, 2009, Bloomberg article reported: "Billionaire George Soros cut stakes in his biggest holdings, Petroleo Brasileiro SA and Potash Corp. of Saskatchewan, and bought more shares of retailers in the first quarter [of 2009]. Soros Fund Management LLC, the investor's hedge-fund firm, sold 5 million U.S. shares of Petrobras, as the Brazilian company is known, according to a filing today with the U.S. Securities and Exchange Commission. The New York-based firm's remaining 32 million shares of the state-controlled oil company were valued at $963 million at the end of the quarter."
Soros reportedly sold stock before Ex-Im bank loan was dispensed. The FactCheck article also refuted what it called the "baseless allegation" that the loan was intended to financially benefit Soros. From FactCheck.org:
The message claims that George Soros would "benefit most" from the loan, but that is also a baseless accusation. Soros is a favorite whipping boy of conservatives because of his early financial help to the liberal group MoveOn.org. And he is indeed a major investor in Petrobras, through his New York-based hedge-fund firm, Soros Fund Management LLC. But the hedge fund recently sold 22 million shares of common stock in the company (which carry voting rights) while buying 5.8 million shares of preferred stock (which is non-voting.) As reported by Bloomberg News, Soros reduced his stake in the company before any of the Ex-Im Bank's promised loan has been dispensed.
Beck claims a loan providing "strategic benefits" and jobs to U.S. means American people are "getting screwed"
Beck baselessly claims American people are "getting screwed." Beck also commented: "Then Petrobras shareholders get rich. Back at the beginning. Getting rich. You getting screwed. You see how this works? Don't you feel better inside? The American president is out looking for you."
Loan reportedly will create American jobs and provide "strategic benefits" to U.S. energy security
Ex-Im President: "Loan guarantees to help finance purchases of U.S. goods and services by Petrobras." In an August 21, 2009, letter to the editor printed in The Wall Street Journal, Export-Import Bank chairman and president Fred P. Hochberg discussed the "loan guarantees to help finance purchases of U.S. goods and services by Petrobras." Hochberg wrote, "This increases the likelihood that American -- not foreign -- workers will be employed to satisfy part of the company's planned $175 billion investment during the next five years." Hochberg also asserted: "Ex-Im Bank does not make U.S. policy. In fact, our charter prohibits us from turning down financing for either nonfinancial or noncommercial reasons, except in rare circumstances including failure to meet our environmental standards." He added: "The foreign buyers that use Ex-Im Bank products pay us in full. Over the past 16 years the fees that we collect have netted American taxpayers more than $4.9 billion plus the jobs those exports have created. Thanks to the fees we charge, the bank is self-sustaining and does not receive any appropriated funds from Congress."
Ex-Im spokesman: "This is the government doing what it's supposed to do: Create jobs." An August 19, 2009, blog post by Politico's Ben Smith reported on Export-Import Bank spokesman Phil Cogan's response to similar criticism made by Fox News' Sarah Palin:
A spokesman for the bank, Phil Cogan, noted to POLITICO that the bank does not rely on tax money and that Palin's statement ignores the bank's central function: To lend money to foreign companies for the purchase of American goods and services.
"It has to be produced by U.S. workers," Cogan said. Palin's statement refers to "creat[ing] jobs and health benefits in the U.S."
"That's exactly what a purchase financed by the U.S. government would do," Cogan said.
In this case, Cogan said, the proposed loan would likely finance engineering services, sales of ships to service oil platforms, or drilling equipment.
Even IBD said "the investment has both practical and strategic benefits for our energy security." An August 12, 2009, Investor's Business Daily editorial stated: "We'll admit that, on first blush, spending such money overseas when we've got plenty at home sounds a little questionable. But the investment has both practical and strategic benefits for our energy security." The editorial continued:
First, the U.S. money is a loan, and Brazil has excellent credit with an investment-grade BBB sovereign rating and a record of responsible borrowing. Whatever we loan the Brazilians will be paid back on time and with interest.
Second, the cash will encourage Brazil's state oil company, Petrobras, to contract with American businesses. And we aren't just talking about oil companies, but software, steel, research, environmental impact and engineering concerns, to name a few others.
Correction: Date corrected.