ICYMI: The Bank to Nowhere
A campaign against the crony Export-Import bank is picking up steam
Washington,
May 1, 2015 -
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By KIMBERLEY A. STRASSEL
May 1, 2015
LINK TO STORY
In October 2005, earmarks were a Washington fact of life. Then former Oklahoma Sen.Tom Coburn took to the floor to decry pork spending for Alaska’s “Bridge to Nowhere.” The phrase became a national rallying cry against government waste. It required another five years, but in late 2010, Republicans forswore earmarks.
Conservative reformers are rolling out that strategy again, this time to deep-six one of Washington’s oldest dispensers of corporate welfare: the Export-Import Bank. The campaign is already in full swing, with a coalition of free-market Republicans and grass-roots groups dropping a daily barrage about the bank’s corruption, mismanagement and cronyism. Their hope is that by June 30 they will have redefined Ex-Im as the Bank to Nowhere.
That date marks the expiration of Ex-Im’s charter, and it’s why this campaign (in comparison with earmarks) is turbocharged. About half the Republican caucus remains committed to the Ex-Im favor factory and wants Speaker John Boehner to push through a reauthorization. The reformers have but two months to instead embarrass their colleagues into doing what Congress does best: nothing.
Inside the House, Financial Services Chairman Jeb Hensarling and Ohio’s Jim Jordan are leading the charge, with recent assists from Oversight Chairman Jason Chaffetz and Michigan’s Bill Huizenga. The quartet jumped on the Justice Department’s April 13 charges against Johnny Gutierrez, a former Ex-Im loan officer accused of accepting bribes on 19 separate occasions to do bank favors.
In a hearing two days later, the group outlined evidence that fraud and mismanagement is widespread. The bank’s acting inspector general, Michael McCarthy, testified that further indictments were possible in no fewer than 31 open fraud investigations.
In a second joint Financial Services-Oversight hearing Thursday, the focus turned to the bank’s cronyism—particularly its failed green cronyism. Ex-Im guaranteed a $10.3 million loan to finance the overseas sale of products made by the infamous Solyndra. It gave $9.2 million to finance the export of solar panels from Abound Solar, which also went bankrupt. It seems no coincidence that both Solyndra and Abound were politically connected firms that also got huge loan guarantees from the Energy Department.
Australia’s billionaire mining heiress Gina Rinehart snagged a $694 million Ex-Im loan for an iron ore project in Western Australia. Ex-Im has provided near record-breaking loans to subsidize a firm co-owned by Saudi Aramco—the world’s largest oil company. It provided millions to one-time Washington energy darling Enron. There is a reason for these deals, and for why more than 60% of Ex-Im’s money in 2013 benefited just 10 rich companies—it’s called politics.
Outside Congress, the grass roots are rallying constituents. Some 50 conservative groups, organized by Americans for Prosperity, sent a letter to Congress last week demanding the bank die. Their leaders have been calling up pro-Ex-Im Republicans, re-educating them on bank myths, including the whoppers that it helps small businesses and doesn’t cost taxpayers a dime. And they’ve been pointing out the extraordinary political benefit of Republicans’ finally getting on the right side of capitalism, in contrast to such supposed populist crusaders as Elizabeth Warren, who supports the bank.
Heritage Action’s growing list of influential members who oppose reauthorization is proof reformers are making progress. It now includes eight House committee chairman (the likes of Paul Ryan, Tom Price and Fred Upton), as well as Majority Leader Kevin McCarthy and Whip Steve Scalise. The Club for Growth is running ads in GOP districts noting that reauthorization is now opposed by pretty much the entire GOP presidential field: Jeb Bush, Scott Walker, Marco Rubio, Ted Cruz, Rand Paul.
Yet the Chamber of Commerce and other Ex-Im supporters are lobbying hard, particularly Mr. Boehner—and with some apparent success. In a press conference Thursday the speaker said he’d support any plan Mr. Hensarling crafted to “reform” or “wind down” the bank; he worried that there are “thousands of jobs on the line.”
But letting the charter expire by necessity involves an orderly wind down, since it would take years for the bank to close out loans. (Which also means jobs don’t go poof.) The real question is whether Mr. Boehner will take the extraordinary step of undercutting his own committee chairman to put a reauthorization on the floor.
Reformers also need to spread this campaign to the Senate. It’s no good if the House kills Ex-Im, only for crony GOP senators to attach reauthorization to a “must-pass” bill (highway funds?). Utah Sen. Mike Lee had Mr. Hensarling address 35 senators Wednesday at the Senate Republican Steering Committee. That’s a start.
Not so long ago, Republican porksters had all manner of (bogus) arguments for why they could not, should not and would not ever relinquish earmarks. Yet they did, and the world not only didn’t end, it’s a better place. They might remember that, and just say goodbye to the Bank to Nowhere.
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