Witnesses Testify Export-Import Bank Tilts Playing Field Against U.S. Workers
Washington,
June 3, 2015 -
Witnesses appearing before the House Financial Services Committee today at a hearing on the Export-Import Bank are testifying that Ex-Im harms some American jobs, tilts the playing field against some U.S. companies and has problems with corruption.
Excerpts from their submitted testimony are below:
Corruption, Bribes
“We found Ex-Im Bank’s risk assessment for FY 2014 reporting provided limited insight into the actual risk of significant improper payments. As a result, the Bank’s improper payment reporting is incomplete and the true risk of significant improper payments is unknown.”
“On April 22, 2015, Johnny Gutierrez, a former loan officer at Ex-Im Bank, pleaded guilty to one count of bribery of a public official, for accepting more than $78,000 in bribes in return for recommending the approval of unqualified loan applications to the bank, among other misconduct…Gutierrez admitted that on 19 separate occasions between June 2006 and December 2013, he accepted bribes totaling more than $78,000 in return for recommending the approval of unqualified loan applications and improperly expediting other applications. Specifically, Gutierrez admitted that he intentionally ignored the fact that one company had previously defaulted in 10 previous transactions guaranteed by the bank, causing the Ex-Im Bank to lose almost $20 million.”
- Export-Import Bank’s Deputy Inspector General Michael T. McCarthy
Small Business Exporting Without Ex-Im
“When I researched the Ex-Im Bank and especially the sign-up process, it became clear that it is designed for large businesses.”
“We have grown our exports by 50 percent and doubled our workforce without the use of the Ex-Im Bank.”
“It seems that if the government aims to aid small businesses in their exports and thereby grow the domestic economy, it would be much more beneficial to create Free Trade Agreements with more countries and decrease the red-tape barriers to trade.”
- Rachael Cox, Vice President for Business Development, Conway Machine, Inc.
Ex-Im Tilts Playing Field, Harming U.S. Companies and Their Workers
“We still believe that the Bank’s policy of subsidizing our foreign competitors tilts that playing field, harming U.S. companies and their workers. In addition, developments in the last year show even more clearly that Congress must – and only Congress can – put a stop to the continuing subsidies that the Bank continues to provide to foreign airlines by deploying the full faith and credit of the United States to support their aircraft purchases.”
- Delta Air Lines Executive Vice President & Chief Legal Officer Richard B. Hirst
“Through Cliffs’ recent experience opposing the Bank’s $694 million direct loan for the Roy Hill iron ore project in Australia, it is apparent that the Bank is falling short of adherence to its Congressionally authorized Charter…When the Roy Hill transaction was approved, the U.S. iron ore industry was producing at near capacity and at full employment. Today, the situation is quite different, with well over 1,200 workers at domestic iron ore operations who are currently on layoff or have been notified of a coming layoff.”
“Low cost iron ore is facilitating Chinese steel producers to flood the U.S. with cheap steel…The Roy Hill project, which proposes to add more iron ore to the market than the U.S. industry produces in aggregate, will further exacerbate this global oversupply situation when the project begins production at the end of 2015.”
- Cliffs Natural Resources Inc. Executive Vice President Clifford Smith
75% of Ex-Im Assistance Went to Just 10 Big Corporations
“The claim that Ex-Im exists to help small businesses is belied by the fact that most of Ex-Im’s loan portfolio value is concentrated among a handful of large U.S. companies. In 2013 roughly 75 percent of the value of Ex-Im loans, guarantees, and insurance were granted on behalf of 10 large companies, including Boeing, General Electric, Dow Chemical, Bechtel, and Caterpillar.”
“By trying to ‘level the playing field’ with foreign companies backed by their own governments, Ex-Im ‘unlevels’ the playing field for many more U.S. companies competing at home and abroad. This adverse effect has been ignored, downplayed, or mischaracterized, but the collateral damage is substantial and should be a central part of the story. A proper accounting reveals that Ex-Im’s practices impose significant costs on manufacturing firms across every industry and in every U.S. state.”
- Cato Institute’s Daniel J. Ikenson
