The funding authorized for NADbank included in $ 1.275 Billion callable capital (each) and paid-in capital of $ 225 million (as of 3/31/1996) from the Mexican and U.S. Governments. The stated purpose of the Bank was to provide loans and loan guarantees which were to be used for the environmental clean-up projects. These were to be used for partial funding that would be leveraged by additional loan sources such as state and local governments, the Mexican and U.S. governments and the World Bank. The projects to be funded would be identified and approved by NADbank's sister organization, the Border Environmental Cooperation Commission (BECC). The Clinton Administration claimed that the NADbank's funds would be leveraged to a total of $8 Billion. While well short of the $20 billion required for border cleanup, as estimated by the Sierra Club, the promised effort would have represented a substantial improvement.

The performance of these agencies in accomplishing border cleanup has not only been disappointing, until recently it has been non- existent. In September, 1995, the BECC announced that its first two approved projects, a $17.2 million water treatment plant in Brawley , Calif. and a $ 8 million waste water plant for Ensenada, Bay in Mexico. They were also expected to approve water plants in El Paso, Ciudad Juarez and Matamoros. In spite of the impressive publicity, as of November, 1996 not a single project had been funded by NADbank.

Of the many projects, the bank actually approved loans only for plants in El Paso and Brawley. "But El Paso officials decided they could obtain funds more cheaply from other sources, and Brawley politicians are now discussing how much - if any - of the loan they should accept. " [Ref(4)]. The water-treatment plant for the Pacific coast town of Ensenada, was rejected by the bank on the basis that "the plans, including the site for the plant, were inadequate." A water plant for Juarez was rejected because the Bank felt that the city was unwilling to raise water rates high enough to assure repayment. Both El Paso and Brawley rejected the Bank's onerous loan terms. A General Accounting Office investigation concluded that NADbank had set its interest rates so high that most polluted towns might not be able to afford its loans. The Bank has made the safety of its capital and its profitability, not the environmental needs of the border, its paramount priority. This is further confirmed by the BankÕs statement that ŌGenerally, no more than 20 percent of the BankÕs capital and retained earnings shall ever be outstanding in the form of direct loans. [Ref (6)]Ķ With the approach of the Congressional votes on the - performance of NAFTA, the Administration has brought pressure to show progress on these and other promises. Finally, the agencies have recently announced the approval of loans for water projects in Sonora and the border region with Arizona. The plans for these were promoted by studies by a committee working on the joint economic development of these two states.

The only available financial statements of NADbank cover the period from its inception in November ,1994 through 1995 [Ref (5)] . After one year, the Bank had 20 employees and is clearly treating itself to a style in which its clients wish they could be accustomed. The total expenditures were $1,694,000 including $110,000 for the Employee Retirement plan. Major expense categories included: Personnel - $ 781 K General and Administrative - $ 248 K Consultants/Contractors - $437 K Furniture/Equipment -- $ 227 K

The Bank maintained $ 30 Million in short term Treasury Bills.

To gain the final votes necessary in Congress to pass NAFTA, the Administration agreed to require that up to 10% of all funds contributed to the NADbank were "... for projects to help U.S. communities make necessary adjustments to NAFTA's effects". The motive for the "Community Adjustment and Investment" funds was to provide economic aid to U.S. areas losing commerce due to economic dislocations caused by NAFTA. As of the end of 1995 only $76 K had been spent for CA & I. The Bank enjoys special immunities such as exemption from the payment, withholding or exemption of any tax or duty. The Bank is also enjoined from imposing any ".. condition that the proceeds of a loan be spent in the territory of Mexico or the U.S."

When the President was selling NAFTA to Congress in 1993 and buying votes, NADBank was used as collateral to cajole the environmental community into halfhearted support for the agreement. Now, four years later, with the experience of this mechanismÕs lack of action, it is clear the North American Development Bank was only a "red herring".