Export-Import Bank of Corporate Welfare
The Export-Import Bank claims it is a champion for small businesses that want to export their products overseas. The bank claims gaining global access for small businesses is its top priority. The bank’s website reads: “Global access for small business is a top priority of Ex-Im Bank. This initiative is dedicated to dramatically increasing the number of small businesses exporting goods and services to maintain and create U.S. jobs.” The Ex-Im Bank is not a champion for small business, it is a taxpayer funded, government entity doling out welfare to multinational corporations.
How many small businesses want to export their products? Is it even a goal of any small business to export its products? The reality is that small businesses do not consider exporting their products a major problem or priority. The CATO Institute reported that the National Federation of Independent Business recently surveyed 3,471 small businesses and asked them to rank 75 potential problems. The category of “Exporting My Goods/Services” ranked last. The category has ranked last in every such survey since 1986. Why the gloom and doom talk about the collapse of small businesses, if the bank’s charter is not renewed?
If not to small businesses, where is the Ex-Im Bank sending your tax dollars? The Boeing Company is the biggest beneficiary of the bank’s export subsidies. A mammoth 65 percent of all Ex-Im loan guarantees and 42 percent of all loans doled out last year financed Boeing’s exports. Why does a $90 billion multinational corporation need your tax dollars to export its products? Boeing could easily finance its exports. Unfortunately, Boeing is not the only corporation receiving welfare. The following is a short list of the major corporations, besides Boeing, that have used corporate welfare to fund their exports to foreign markets:
- General Electric
- Gulfstream Aerospace Corporation
- Westinghouse Electric
- Siemens Corporation
- McDonnell Douglas Corporation
- Deere & Company
- Case Corporation
The aforementioned corporations are financially sound businesses that are fully capable of financing their exports to any market, but they choose corporate welfare because it eliminates their risk. The Ex-Im Bank tries to hide its tax dollar giveaways to these corporations by falsely categorizing them as “small businesses.”
The Ex-Im Bank is just another government entity full of incompetent and/or corrupt federal government employees. The U.S. Government Accountability Office (GAO) has found that the Ex-Im Bank is clueless when it comes to forecasting risk exposure. The GAO released a report on the Ex-Im Bank dated May 30, 2013 that found the forecasting model used by the bank to assess risk is fraught with errors. The GAO recommended the following to correct the errors:
1. The bank should adjust its forecasting model based on previous experience,
2. assess and report the sensitivity of the exposure forecast model to key assumptions and estimates,
3. routinely report the financial performance of sub-portfolios supporting congressional mandates, and
4. provide Congress with additional information on the resources associated with meeting mandated targets.
In essence, the bank is flying blind when it comes to risk. It reminds me of Fannie Mae and Freddie Mac.
The Ex-Im Bank is also riddled with corruption. Last year, four employees of the bank were suspended or removed amid investigations into allegations that they accepted gifts or kickbacks. The investigators handling the case were also tasked with investigating allegations that employees attempted to steer federal contracts to favored companies. Thus far, one employee, Johnny Gutierrez, has pleaded guilty to “accepting $78,000 in bribes in return for recommending the approval of unqualified loan applications to the bank, among other misconduct.” Gutierrez will be sentenced in July.
The corruption in the bank doesn’t stop with its employees. Members of the bank’s “advisory committee” have benefited from sitting on the committee. According to The Daily Caller, “fully half” of the committee members headed corporations “that directly benefited from Ex-Im financing during their term.” There seems to be no end to the allegations of corruption. The bank’s own inspector general is currently investigating 40 potential fraud cases.
The Ex-Im Bank is a dysfunctional, corrupt, poorly managed government entity that uses its charter to deliver your tax dollars to multinational corporations. It is time to end crony capitalism and corporate welfare! I suggest all of you do what a coalition of 50 organizations did and contact your representatives in DC and order them to end the Ex-Im Bank.