One of Big Business’ favorite government institutions, the Export-Import Bank of the United States, could be in its last few months of existence and those who’ve made it big courtesy of our government’s largesse will stop at almost nothing to save it from the congressional dustbin.
Last year, as the New Deal-era institution struggled to fend off an earlier congressional effort to shut it down, Boeing alone spent over $4 million on lobbying to keep it afloat. The aircraft manufacturer likely considered this a worthwhile investment, since they received more than $8 billion in loans and guarantees from Ex-Im Bank the previous year.
The bank has also funneled over $2 billion to General Electric, and more than $1 billion each to Caterpillar and Bechtel. With such serious funding at stake, and with the haphazard temporary extension granted for the bank’s charter last year due to expire for good on June 30, these corporations and others will likely deploy the full measure of their Beltway influence-peddling operations in order to keep the cash flowing.
Reuters reports that one pro-Ex-Im event is set to feature representatives from “small- to mid-sized” businesses that have apparently been assisted by the bank. However, the findings of a previous Reuters investigation cast Ex-Im’s qualifications for “small business” in a questionable light. In November, it was reported that more than 200 large companies were “misclassified” by the bank as small. These included firms owned by Warren Buffett and Mexican multi-billionaire Carlos Slim, neither of whom exactly fit the classification for small business owners in need of government assistance.
In total, these “small businesses that weren’t” received some $3 billion in taxpayer-backed Ex-Im funding. One would hope that the Ex-Im Bank and their supporters have learned their lesson and vetted the alleged “small business” participants in this week’s event more carefully.
The Ex-Im Bank is also reportedly taking their charm offensive on the road, led by their embattled Chairman Fred Hochberg, himself a frequent target of scrutiny by congressional investigators. According to The Hill, Hochberg will visit Des Moines, Detroit and finally Ohio, where he will be hosted by a company that stands as a veritable poster child for the “crony capitalism” so many lawmakers and others find distasteful about Ex-Im.
Toledo-based First Solar produces, as the name suggests, solar panels. They also have a long history of receiving government handouts, including millions from Ex-Im along with suspect loans from the Department of Energy that triggered a congressional investigation in 2012. First Solar also likely stands to benefit from having well-connected friends.
In 2011, Diane Farrell, then a member of Ex-Im’s Board of Directors, supported a nearly $16 million deal between First Solar and Azure Power, a solar energy company in India. Earlier this year, Farrell – no longer with Ex-Im – was named to Azure’s own board. Ex-Im is reportedly gearing up to spend another $1 billion on deals with India’s “green energy” industry and First Solar continues to do a significant amount of business there. Chairman Hochberg’s visit to their Ohio facility suggests First Solar may well get a piece of Ex-Im’s business in India. It remains to be seen if their old friends Diane Farrell and Azure Power will be involved as well.
Ex-Im picks “winners” like First Solar – which reflects part of the current administration’s “green” agenda – to receive their handouts, but they pick losers as well. Sometimes, American workers are the ones who lose. U.S.-based airlines, for instance, have lost over 7,000 jobs because Ex-Im gives a boost to their foreign competitors by providing them cut-rate deals on wide-body jets made, of course, by Boeing.
Some on Capitol Hill believe the Ex-Im Bank should be preserved but with significant reforms. Given the institution’s history of seedy, crony-capitalistic activity and putting major corporations ahead of hardworking Americans, the would-be “reformers” have their work cut out for them. Shutting the Bank down once and for all may be the most effective option.