American employers face more competition today than at any time in our nation’s history. As companies in China, Russia, India and elsewhere work tirelessly to surpass us, our job creators are being held back by vestiges of a previous era, the most egregious of which is the Export Import Bank of the United States (Ex-Im). Now, as Congress reconsiders the reauthorization of the bank – set to expire on June 30 – members of both parties have the opportunity to do away with this outdated government bureaucracy.
Why is Our Government Propping up Big Biz at Expense of the Taxpayer?
Born out of New Deal era government intervention, Ex-Im is the very embodiment of crony capitalism. While the bank claims to support small businesses trying to engage in commerce, it has instead become a fund for Big Business to receive taxpayer-backed loans to fund foreign transactions. According to research by the U.S. House Financial Services Committee, 60 percent of the bank’s financing in 2013 went to just 10 “mega corporations.”
Knowing that this fact was not in line with its stated mission, Ex-Im was caught lying about the number of small businesses receiving funds. According to a November 2014 report by Reuters, “The U.S. Export-Import Bank has mischaracterized potentially hundreds of large companies and units of multinational conglomerates as small businesses.” Reuters calculated that over an eight-year period approximately $3 billion – or eight percent of Ex-Im’s total small business support – was misclassified. These companies were owned by such billionaires as Warren Buffett and Carlos Slim, who do not exactly need assistance from the government.
Unfortunately, Ex-Im’s financing, which favors large corporations, went beyond sneaky handouts and extended to allowing these companies to help write the policies that directly affected them. In 2012, according to The Wall Street Journal, the bank worked hand-in-hand with Boeing to “write rules that would satisfy critics in Congress and the domestic commercial airline industry – while leaving most sales of Boeing’s airplanes to foreign carriers unscathed.”
This cozy relationship is suspect under any circumstances, but considering that Boeing was the top recipient of Ex-Im funding in 2013, it far beyond the pale. Not only did Ex-Im help fund foreign government-owned airlines to facilitate their purchase of Boeing aircraft, they also helped draft the regulations that specifically benefited Boeing. The bank’s financing favoring Boeing directly hurts the domestic airline industry. According to the Airline Pilots Association, Ex-Im’s assistance to foreign controlled airlines such as Emirates Airline and Air India has led to a two percent decrease in U.S. airline jobs affecting thousands of workers.
If all of this wasn’t enough cause for concern, recent news reports have also uncovered criminal behavior by Ex-Im employees. On April 13, former loan officer Johnny Gutierrez was charged with 19 counts of bribery that took place between 2006 and 2013. According to the Journal, Gutierrez allegedly accepted cash payments from a company that was attempting to gain financing from the Ex-Im Bank. Three other employees are also under investigation for improper behavior.
Congress has a critical opportunity to shut down the Ex-Im Bank on June 30. For the sake of American taxpayers, it is an opportunity we can’t afford to pass up. It is time to put an end to Ex-Im’s crony capitalism, which is costing us jobs and putting American taxpayers at risk.