Just days after the incoming House Majority Leader Kevin McCarthy announced his intentions to shutter the Export-Import Bank, an ongoing criminal probe has cast the agency in a new, harsh light.
Four Ex-Im officials have been removed or suspended over the past few months for suspected kickbacks, gifts, and improper use of leverage to secure favorable contracts for businesses, according to the Wall Street Journal, which reported the news on Tuesday.
According to the story:
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.
Two other employees are reportedly being investigated for allegedly awarding improper contracts, while a third is under investigation for allegedly accepting gifts from a company seeking financing.
The Export-Import Bank supports loans to exporting small businesses and protects the credit commitments of buyers overseas. It is a self-funding agency, owned by taxpayers, that helps large businesses as well as small ones. Its charter expires in September.
Conservatives--including Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee--say the agency wastes taxpayer money and is an example of corporate welfare and government waste. Defenders, which include the White House and the traditionally right-of-center U.S. Chamber of Commerce, say it creates jobs and helps small businesses conduct business in foreign markets. Closing the bank will harm U.S. exports, they say, particularly as the economy struggles to regain its footing.
Shutting the bank down, many fear, will do extensive damage to the trade competitiveness of all U.S. companies, which compete globally against companies that rely on similar supports. The Export-Import Bank of China, for example, is one of three government-chartered banks in China with similar trade objectives, which collectively support 11 times as much trade financing as the U.S.
In addition to its work with small business exporters, the Ex-Im Bank also works with large companies such as Boeing, Caterpillar, and General Electric.