By Eric Boehm | Watchdog.org
MINNEAPOLIS — The Export-Import Bank puts billions of taxpayer dollars at risk to subsidize purchases by overseas companies, and it doesn’t do a good job of making those transactions transparent, either.
The Government Accountability Office whacked the Ex-Im bank in a report released last week for shoddy record-keeping and oversight of three loans in 2012 for more than $1 billion. The loans went to the governments of France, Mexico and Cameroon for the purchase of, respectively, one satellite, three satellites and a bunch of construction equipment.
These loans were made as part an Ex-Im bank program that subsidizes the purchase of goods from American defense contractors, on the condition the countries doing the buying can only use the equipment for non-military purposes.
But since the Ex-Im bank never bothered to file mandatory reports about the purchases, it’s not clear how those satellites and construction equipment are being used, the GAO said.
“Some of the reports were missing or late,” the GAO concluded. “Moreover, we found Ex-Im’s attempts to obtain missing documents were often not timely, and records of these efforts were sometimes lacking.”
Officials at the bank told the GAO they didn’t have reason to believe the missing documents were a problem, but they said it would take steps to improve oversight.
This isn’t the first time the Ex-Im Bank has failed at transparency, said Veronique De Rugy, a senior research fellow at the Mercatus Center at George Mason University. In her own research into the bank’s dealings, she says she’s found “billions and billions of dollars” not properly accounted for.
“They are just disregarding these requests from Congress,” she said. “No one has ever asked them any questions, so I think they think they are immune from any oversight.”
Watchdog.org has reported on the cronyism that rules the Em-Im bank — such as a 2012 deal between the bank and a mining company owned by Australia’s richest person — under the guise of increasing foreign demand for American goods. By subsidizing purchases of specific American products, like Boeing planes, the bank uses taxpayer dollars to making certain companies’ products more attractive to buyers, which hurts competition while only helping those favored firms’ bottom lines.
The bank is up for re-authorization by Congress this fall. When it was last re-authorized in 2012, Congress agreed to begin winding down spending on the bank.
Among those who said the bank should be foreclosed upon was a first term senator from Illinois named Barack Obama. In 2008, Obama called the bank “little more than a fund for corporate welfare.”
But Obama is now advocating for the bank to be re-upped by Congress. He called the bank “vital to America’s success” in an address last week.
But the bank doesn’t do much to help small businesses. Most of the benefits of the bank’s existence flow to Boeing and other major companies, which not surprisingly are the same companies spending lots of money to lobby Congress on the question of re-authorization.
“It is a quintessential example of everything that is wrong in the unhealthy marriage between big business and big government,” De Rugy said.