The 2016 presidential election swept Donald Trump into office on a wave of popular disgust with Washington – the backroom deals, the two-faced politicians, and the pervasive sense that everyone in Washington is out for themselves.
The president promised he would drain the swamp. That’s good news, because in the case of the Export-Import Bank, the swamp is brimming.
{mosads}The Ex-Im Bank has long drawn the ire of conservatives for its complete embodiment of corporate welfare. Though the bank’s mission is to “facilitate the export of US goods and services,” it does so not for America’s small-town Mom & Pop shops, but for America’s billion-dollar corporations – Boeing, Caterpillar, General Electric, Wells Fargo and others.
Worse still, however, is its dogged insistence on violating the rules Congress has set for it.
For example, the bank’s regulations require it to be open about its transaction history – essentially, to tell anyone who is interested what, exactly, they do with the taxpayer money they receive – $5 billion in fiscal year 2016, to be exact.
However, for weeks, they have stonewalled Heritage research fellow Diane Katz’s request for details on 48 separate transactions from fiscal year 2016, some as high as $500 million.
That there should even be transactions at this dollar amount is itself suspect. The bank does not currently have enough board members to form the quorum necessary to approve bank deals greater than $10 million.
Nevertheless, $500 million went to JP Morgan Chase & Co. andTD Bank. $200 million was doled out to Wells Fargo. Another $15 million here, and $150 million there.
Again, the bank’s charter forbids transactions over $10 million without the presence of a full quorum – which the bank does not have.
So much for rules.
Though Ex-Im has responded to Katz, it’s done so without the details she requested. In answer to her query about why there are transactions well in excess of $10 million, the bank replied that they were “multiyear transactions,” authorized before the quorum lapsed.
Except these transactions don’t show up in prior year approvals.
The bank also replied that staff were authorized to approve short-term transactions in lieu of the board.
The transaction amounts, however, are well in excess of what staff is authorized to do.
The bank’s blatant violation of its transparency requirements and its evasiveness about how, exactly, it is approving deals of more than $10 million without the necessary board quorum are fishy – more so in light of the bank’s history of wrongdoing.
As Katz testified before Congress, research by the Heritage Foundation documented 124 cases of fraud and corruption investigated by Ex-Im’s Office of Inspector General between 2007 and 2014, as well as 792 separate claims involving more than half a billion dollars – not to mention criminal activity and mismanagement of risk in its huge, taxpayer-backed portfolio.
In short, the Ex-Im Bank has never proven itself to be a trustworthy steward of taxpayer money, or its own rules and bylaws – which makes its failure to act transparently that much more concerning.
Of course, all of this hasn’t stopped recipients of the bank’s largess from lobbying the new Trump administration to fill the three vacancies on its board, so that it can again return to doling out billions to America’s largest corporations. But if Ex-Im has proven anything, it is that their bureaucrats do whatever they want, regardless of what Congress says.
President Trump’s mission to drain the swamp begins here. He should leave the board seats vacant, crack down on the bank’s blatant wrongdoing, and support conservative efforts to phase out Ex-Im’s charter.
Oh, and maybe he can make the bank answer Diane Katz’s questions, too.
Rachel Bovard (@Rachel_Bovard) is the director of policy services for The Heritage Foundation (@Heritage), and a former policy director for the Senate Steering Committee.
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