The Crony Connections Of The Ex-Im Bank’s Advisory Board
In politics, as in life, you are often judged by the company you keep. This extends not only to individuals but to organizations: the character of an institution is often a function of the individuals connected to it.
As Congress decides whether or not to renew the charter of the Export-Import (Ex-IM) Bank of the United States, currently slated to expire this summer, lawmakers would do well to look closely into some of the individuals associated with this controversial federal agency. Even among the recent list of appointees to the Bank’s advisory committee, announced earlier this month, some questionable connections emerge. At the very least, they will hardly diminish the well-deserved reputation for crony capitalism surrounding the agency.
Rep. Jeb Hensarling (R-Texas), Chairman of the House Committee on Financial Services, has pointed out that just ten corporations reaped more than 60 percent of Ex-Im’s 2013 financing. One of those ten corporations, Ex-Im’s number-one beneficiary, once again has a friendly face at the very top of the Bank’s advisory committee. Christine Gregoire, the former Democratic governor of Washington state, is returning for another term as the committee’s chairman. Washington State, of course, is the birthplace of – and a manufacturing center for – the Boeing Corporation, which received $8 billion in Ex-Im financing according to a study by the Mercatus Center at George Mason University.
Mercatus also found that more than 43 percent of Ex-Im funding from 2007 to 2014 went to Washington State alone – no doubt driven by the Bank’s cozy relationship with Boeing. Gregoire served as governor for much of that period. The Daily Caller notes Gregoire’s “history of supporting the interests of Boeing” – including working to tip the scales in their favor in environmental disputes and defense contract negotiations. It remains a safe assumption that she has not forgotten her state’s favorite mega-corporation while serving as Ex-Im advisory committee chair and is unlikely to do so in the future.
A number of the new committee members serving under Gregoire arrive with baggage of their own, including histories of extensive Ex-Im deals and exchanges of mutual praise with the institution.
One new member, Tom Kiernan, is CEO of the American Wind Energy Association, whose members, according to the Washington Free Beacon, regularly receive Ex-Im financing for their projects. Also benefitting from Ex-Im’s backing was Combustion Associates, Inc., whose president Kusum Kavia was just named to the advisory committee as well. The Bank supported a multimillion-dollar Combustion Associates power generation project in West Africa, which resulted in Kavia’s company being named Ex-Im’s 2009 “Small Business Exporter of the Year” for sub-Saharan Africa.
In fact, for a number of individuals, being named to the 2015 advisory committee is not the first accolade they’ve received from the Bank. New member Mary Howe’s flake-ice machine factory was honored with a visit from Ex-Im Chairman Fred Hochberg last year. Gabriel Ojeda’s Fritz-Pak Corp. was featured as a “success story” in the Bank’s 2014 annual report and Ojeda finds himself with a seat on the board this year.
Indeed, both Howe and Ojeda have been vocal supporters of Ex-Im as well. The report quoted Ojeda as saying there was “no doubt” his business owed “no small part” of its success to the Bank. Mary Howe has previously defended the agency against charges of cronyism, telling a Chicago business publication, “It’s definitely not cronyism.”
It would appear that major qualifications for a seat on Ex-Im’s advisory committee involve taking the Bank’s taxpayer-backed funding, and singing its praises loud and clear. This is not what taxpayers should expect from a body meant to ensure the Bank remains an unbiased, independent steward of American tax dollars.
Between now and June 30, when their charter expires, Congress should keep a close eye on the Bank’s activities and those of the members of their advisory committee. It might be time we realized this is one government institution the republic can do without.
David Williams is president of the Taxpayers Protection Alliance