Huizenga: Many reasons to be wary of the Ex-Im Bank
It's great to see the debate over the future of the Ex-Im Bank reach Michigan news outlets. I firmly believe the potential reauthorization of the Export-Import Bank needs to be discussed not just by people inside the capital beltway, but by taxpayers in Michigan and across the nation. Supporters of reauthorizing the bank would have you believe the Export-Import Bank is the greatest thing since sliced bread, while those who oppose the bank describe it as an example of crony capitalism at its worst. Let's clear the spin and examine what the Export-Import Bank does, how it conducts business, and whether or not this program is worthy of reauthorization.
Originally created as part of FDR's New Deal, the Export-Import Bank is a federal government agency designed to facilitate the export of U.S. goods and services to international markets by providing working capital guarantees, export credit insurance, loan guarantees, and direct loans. As time has passed, the bank's charter has grown from four pages at its foundation to more than 150 today and with that expansion, we have seen the bank expand its portfolio to a staggering $140 billion.
It's also important to note that from 1982-95 the Export Import Bank operated at a loss every year. In 1987, the Ex-Im's chairman was granted a $3 billion bailout from taxpayers by the U.S. Treasury after many years of running significant losses and this is when the bank's portfolio was essentially a third of the size it is today. Additionally, from 1992-1996, the bank received multiple bailouts totaling nearly $10 billion.
With our nation's debt over $18 trillion, do we really want to have the government play banker?
The Ex-Im Bank doesn't just have a tattered record with taxpayers; it also has problems with accountability. In 2012, Congress reauthorized Ex-Im, while also mandating several modest reform provisions that shared broad, bipartisan support. These reform provisions required the Ex-Im Bank to submit a business plan to Congress as well as respond to a review of the Ex-Im Bank's risk management practices conducted by the Government Accountability Office. The reauthorization also required the Ex-Im Bank to become more transparent and accountable by categorizing each loan and long-term guarantee, classifying them as necessary either (1) to assume risk the private sector would not undertake, (2) overcome limits in private finance, or (3) meet competition from foreign export credit agencies. The bank has failed to execute the majority of these reforms to an acceptable level.
Unfortunately, the bank also has an unsavory track involving corruption, bribery, and fraud. Perhaps the most infamous example of illegal behavior is that of former Congressman William Jefferson, a Democrat from Louisiana, who was raided by the FBI, convicted, and sent to prison for bribery, racketeering, and money laundering. You may remember him better as the congressman who stuffed his freezer with $90,000 in cold hard cash. Jefferson was working with a then-Ex-Im employee as well as an Ex-Im board member to broker a deal between two Nigerian companies seeking financial support from the Ex-Im Bank.
Last year, Ex-Im removed four more employees for accepting gifts and kickbacks from companies seeking export financing. One of those former employees was indicted on April 14 for taking bribes numerous times between 2006 and 2013. The problems don't end there. During a congressional hearing on April 15, the acting inspector general of the Export-Import Bank announced that there are at least 31 open investigations, with the potential for even more indictments.
The more that is unearthed about the Export-Import Bank, the more concerned I become. While the goal and objective of the bank might be admirable, the current state of the bank is abhorrent at best. A clean reauthorization of the bank does not provide taxpayers with the accountability that is expected from my constituents in Michigan or the overwhelming majority of citizens around the nation.
The truth is out there about Ex-Im. My question, is does Washington actually want to find it?
Congressman Bill Huizenga, R-Zeeland, represents Michigan's 2nd District.