Bipartisanship Lives! Elites United To Save Ex-Im Bank
Last week, the U.S. House of Representatives attached reauthorization of the corrupt, free market-distorting U.S. Export Import (Ex-Im) Bank to “must pass” highway legislation – likely resurrecting the crony capitalist institution from the dead. Fiscally conservative members of Congress unsuccessfully offered amendments to bring a small amount of accountability to the Bank. They all failed, even an amendment by Rep. Ed Royce (R-Calif.) that would have prohibited the Export-Import Bank from providing assistance to state-sponsors of terrorism.
It’s incredibly disappointing that Republicans in Congress have once again acquiesced to K Street lobbyists, to the detriment of the U.S. taxpayer. Since the Senate has already passed their own version of the highway bill, the two bills’ differences will be ironed out in conference committee. Unfortunately, the bank’s authorization is expected to squeak through.
How the Ex-Im Bank is related to funding our nation’s roads and bridges is anyone’s guess, but this political maneuver all but ensures that the bank will reopen for business as usual. No reforms will have been made to ensure that Ex-Im follows the intent of its charter and provides loan guarantees only to those small businesses who would struggle to find financing elsewhere, or to bring greater transparency to the bank’s decision-making process. No efforts to clamp down on the rampant corruption will have been made. In fact, 74 corruption cases have been brought by the Office of Inspector General since 2009, many of which are still ongoing.
Last year alone, according to The Wall Street Journal, four employees were “suspended or removed” due to allegations of “gifts and kickbacks, as well as attempts to steer federal contracts to favored companies.” And, in a 2013 government survey, only 42 percent of bank employees agreed with the statement, “My organization’s leaders maintain high standards of honesty and integrity.” The Ex-Im Bank has been allowed for years to foster a culture of dishonesty and corruption. After successfully letting Ex-Im’s charter expire in June, Congress has decided to return it to the status quo.
This five-month battle has seen astronomical lobbying expenditures from the bank’s largest beneficiaries. Lobbying was intense in the two months leading up to the expiration of Ex-Im’s charter. The National Association of Manufacturers, Boeing, and General Electric spent tens of millions of dollars combined to lobby in favor of the Ex-Im Bank.
Despite the exaggerated headlines and massive lobby campaigns over the past several months, it’s important to put the bank’s influence in perspective. Ex-Im was born out of the New Deal era as an agency to promote American goods abroad by providing taxpayer-backed loans to foreign companies. Today, with the many sources of exporting credit, Ex-Im subsidizes less than 2 percent of America’s total exports. It serves instead as a piggy bank for America’s largest corporations – with 60 percent of the bank’s loans benefitting just 10 companies. Forty percent of Ex-Im’s total authorizations go to Boeing alone, who between 2007 and 2013 received $66.7 billion in loans. General Electric, Bechtel Corporations and Caterpillar are the second and third and fourth largest recipients of funding.
All of these massive corporations are more than able to find alternative sources of export financing or to self-finance large international deals. No doubt, however, that taxpayer subsidies are much better for their bottom lines.
When true bipartisanship in Washington is a rarity, it’s disappointing that the only thing Washington elites can come together on is corporate welfare for Fortune 50 companies on the taxpayers’ dime. What a sad state of affairs.
David Williams is President of the Taxpayers Protection Alliance.