The relationship between Russia and the United States could be concisely defined as adversarial. For decades the two nations have been at odds, but Russia’s invasion of the Ukraine and other recent events have escalated tensions to a height unseen since the Cold War. The United States foreign policy has been clear in its attempt to thwart Russia’s unilateral power grab with President Obama sanctioning the country for its annexation of Crimea.
Yet, the taxpayer-backed Export-Import Bank of the United States (Ex-Im Bank) seems to be undermining those very actions with its consistent support for Russian oligarchs and their corporate corruption, openly standing in defiance of our country’s larger foreign policy objectives.
The bank’s defining purpose is to augment the number of foreign companies purchasing American goods. The objective is to improve the standing of America’s companies abroad, but most importantly to create jobs in the United States. To accomplish this, the bank provides below market-rate loans and guarantees with favorable terms to foreign companies, so that it is more affordable for them to purchase American products. Oftentimes, these loans clash with American interests, actually costing domestic employers jobs, while conflicting with our broader democratic ideals.
Last fiscal year, the bank authorized $629,854,155 to Russia-related transactions, according to its own reports. Such loans come at a time when America’s foreign policy apparatus is reprimanding Russia with targeted sanctions for its unilateral actions violating Ukraine’s sovereignty. The president announced the sanctions by declaring that we must make it “clear that there are consequences for their actions.” But the bank’s pledge to support up to one billion dollars in U.S. exports to buyers in Russia and a “process of joint cooperation between Ex-Im and Sberbank,” which happens to be Russia’s largest financial institution, muddles the administration’s stance and undermines the president’s executive authority.
Russia’s provocative agenda has resulted in President Obama threatening additional sanctions that would reportedly target the nation’s entire energy industry. But such a policy – once again – would be inconsistent with Ex-Im’s past support of the former communist nation’s energy sector. Just last year, the Ex-Im generously approved a loan worth more than $32 million to help a company build a petroleum refinery in Russia. This loan does more than create commerce in the country; it also helps Russia gain even greater control over the region where it currently holds various client states hostage with its energy dominance. Foreign policy experts often assert this very fact and Ex-Im’s loans are providing Russia with more resources to do so.
Foreign policy conflicts aside, the most egregious examples of Ex-Im’s malfeasance have been its loans to Russians embedded with unsavory individuals, even mobsters. The ease with which questionable companies are able to secure Ex-Im loans is frightening, which is perhaps why one of Putin’s own henchman, Gennady Timchenko, sought to take advantage of them to purchase American luxury jets.
Russia and its corrupt oligarchs don’t deserve a nickel from American agencies, let alone one billion dollars in the form of financial loan guarantees. The Ex-Im Bank’s advancement of Russian interests is only the tip of the iceberg in the long list of reasons why the United States should not be in this business.
Congress must send the Kremlin a message that we won’t underwrite the agenda of Vladimir Putin with taxpayer-guaranteed financing. One easy way to achieve that is to put the Ex-Im Bank out of its misery and end its charter so it ceases to bolster America’s opponents abroad, while at the same time hurting domestic employers within our own borders.
David Williams is the president of the Taxpayers Protection Alliance