AGO 1993-030.

Case DateOctober 29, 1993
CourtOhio
Ohio Attorney General Opinions 1993. AGO 1993-030. October 29, 1993OPINION NO. 1993-030The Honorable Mary Ellen Withrow Treasurer of State State of Ohio 30 East Broad Street Columbus, Ohio 43266-0421 Dear Treasurer Withrow: You have requested a formal opinion regarding whether the program described below is a permissible investment by the Treasurer of State under Ohio law. You have indicated that a program has been proposed to the Treasurer, which involves the investment of a portion of the state funds held by the Treasurer in certain payment guarantees issued by the Commodity Credit Corporation ("CCC") and/or the Export-Import Bank of the United States ("Eximbank"). The materials submitted in connection with your request indicate that the CCC and the Eximbank provide payment guarantees with respect to loans made by lending institutions to various business entities, and that such payment guarantees of the CCC and Eximbank by their terms bear the full faith and credit of the United States Government. Under the proposed program, the investment of state funds by the Treasurer would be only in the respective guarantees of the CCC and the Eximbank, and there would be no direct recourse to any underlying collateral or other security. Thus, the State's ownership interest in the investments would be limited to an interest in the CCC's and Eximbank's payment guarantees. I. The CCC and Eximbank Guarantee Programs A. Commodity Credit Corporation As noted in the materials submitted in connection with your request, 15 U.S.C. § 714 (1988), provides that: "there is created a body corporate to be known as Commodity Credit Corporation ..., which shall be an agency and instrumentality of the United States, within the Department of Agriculture, subject to the general supervision and direction of the Secretary of Agriculture...." (Emphasis added.) Thus, pursuant to the express statutory language creating the CCC, it is clear that the CCC constitutes an agency of the federal government. The statutory purposes of the CCC include "stabilizing, supporting and protecting farm income and prices, ... assisting in maintenance of balanced and adequate supplies of agricultural commodities, products thereof, foods, feeds, and fibers ..., and ... facilitating the orderly distribution of agricultural commodities." Id. In furtherance of these purposes, the CCC has developed a number of programs, including the Export Credit Guarantee Program (GSM-102), to expand U.S. agricultural exports by making available export credit guarantees to encourage U.S. private sector financing of foreign purchases of U.S. agricultural commodities on credit terms where financing would not otherwise be available. See 7 C.F.R. Part 1493 (1993). The materials provided in connection with your request include an opinion of the General Counsel of the U.S. Department of Agriculture, concluding that guarantees issued by the CCC under the GSM-102 Program are "general obligations of the United States government backed by the full faith and credit of the United States." See Letter from A. James Barnes, General Counsel, U.S. Department of Agriculture, to Seeley G. Lodwick...

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