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ICYMI - Officials at Ex-Im Bank Face Investigations
Posted by Staff on June 24, 2014
 
By Damian Paletta
 
The U.S. Export-Import Bank has suspended or removed four officials in recent months amid investigations into allegations of gifts and kickbacks, as well as attempts to steer federal contracts to favored companies, several people familiar with the matter said.

One employee, Johnny Gutierrez, an official in the short-term trade finance division, allegedly accepted cash payments in exchange for trying to help a Florida company obtain U.S. government financing to export construction equipment to Latin America, according to a person familiar with the inquiry. Mr. Gutierrez was escorted from the Ex-Im Bank building in April, said two people familiar with the matter.

Mr. Gutierrez's lawyer, Douglas McNabb, confirmed his client had been placed on leave after an investigation by the agency's inspector general, but he wouldn't comment on details of the investigation. Mr. Gutierrez couldn't be reached for comment.

Of the four employees, Mr. Gutierrez's responsibilities were most central to the agency's core mission of financing exports. Two of the others are being investigated over allegations of improperly awarding contracts to help run the agency; the third is being investigated over allegations of accepting gifts on behalf of a company seeking financing, according to people familiar with the matter. The identities of the three couldn't be fully corroborated.

The Ex-Im Bank hasn't disclosed information about the investigations, and declined to comment on Mr. Gutierrez's status, citing privacy laws. Matt Bevens, a spokesman for the agency, said that "the Export-Import Bank takes extremely seriously its commitment to taxpayers and its mission to support U.S. jobs."

Michael McCarthy, the agency's deputy inspector general, said his office couldn't comment on the existence of any investigations.

The internal investigations come at a pivotal time for the agency. Congress is considering whether to reauthorize the 80-year-old federal trade-finance agency, and two of the top three House Republican leaders now say they won't agree to authorize the agency's charter after it expires in September. The allegations of misconduct could complicate an already difficult political environment for those who support the agency's reauthorization.

The agency's chairman, Fred Hochberg, and its inspector general are scheduled to testify before a congressional panel Wednesday about the agency's mandate and operations.

The agency and its 400 employees help finance export deals for a number of large and small U.S. companies, including Boeing Co., General Electric Co. and Caterpillar Inc. Boeing is one of the largest beneficiaries of the federal agency's financing, but hundreds of smaller companies also win approval.

Mr. Hochberg has recently been traveling around the country talking up his agency's benefits to the U.S. economy. The U.S. Chamber of Commerce, the National Association of Manufacturers and several large companies are lobbying lawmakers aggressively to allow the agency to continue backing loans.

The Chamber and NAM released a letter Monday signed by 865 U.S. companies and industry groups supporting the agency's reauthorization.

The IG is investigating whether Mr. Gutierrez accepted improper gifts from Gerardo "Jerry" Diaz, who runs a Florida company called Impex Associates, a person familiar with the matter said.

Multiple efforts to reach Mr. Diaz and Impex were unsuccessful. A lawyer who represented Mr. Diaz in a federal court case in 2006 said he no longer worked for Mr. Diaz and hadn't represented him in years.

Impex ramped up its operations a decade ago, selling U.S. construction equipment and supplies to developers, mainly in Latin America, according to Ex-Im Bank records and the 2006 lawsuit filed against Mr. Diaz by a former business associate, Rama Vyasulu.

The agency has guaranteed numerous Impex deals, stretching back to at least 2002, according to agency records. For example, at one meeting in June 2007, the agency's credit committee agreed to guarantee financing for an Impex project worth between $1 million and $5 million in Mexico, and a similarly sized equipment sale to the Dominican Republic.

The agency has guaranteed numerous Impex deals, stretching back to at least 2002, according to agency records. For example, at one meeting in June 2007, the agency's credit committee agreed to guarantee financing for an Impex project worth between $1 million and $5 million in Mexico, and a similarly sized equipment sale to the Dominican Republic.

The agency has also backed Impex deals in Jamaica and the Turks and Caicos, but not all projects were in Latin America. The agency in 2005 talked up its decision to guarantee a $30 million Impex construction project to build a housing community for oil and gas workers in Doha, Qatar.

The Export-Import Bank changed how it disclosed financing deals in 2010 and no longer discloses all the small business loans it originates. An agency spokesman wouldn't comment on the agency's recent involvement with Impex, though it has backed Impex deals through at least 2011.

The agency operates on borrowed money from the Treasury Department, which it pays interest on. It uses that money for direct loans or loan guarantees. In fiscal 2013, the agency authorized $27 billion to support an estimated $37.4 billion in U.S. export sales. It also sent $1.06 billion to the U.S. Treasury, money it earned from interest and fees.

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