Congress Must Take a Stand Against Crony Capitalism by Ending the Ex-Im Bank
Members of Congress love to tout their support for the free market and their opposition to crony capitalism. So when the Export-Import bank expires on June 30, Congress has the opportunity to prove it really means what it says by putting an end to this poster child of corporate welfare.
Ex-Im provides loans and financing to assist US companies to export their goods and services. It does so by financing the foreign companies purchasing of US products. In theory, this helps companies compete overseas when they would otherwise be unable to. In reality, the bank finances commerce between wealthy well-connected foreign and US companies to the tune of billions of dollars.
By far the biggest beneficiary of Ex-Im largesse is Boeing, which benefits from 40 percent of all loans the bank has given out. There is no reason Boeing needs this assistance. Just last year the company reported record high revenues.
A report from the Wall Street Journal found that Boeing has worked closely with Congress whenever the bank has come up for reauthorization, and helped craft terms for loans that it directly benefits from. The Aerospace giant has become so involved in this process that there was “an extraordinary level of coordination between public officials and corporate executives.” It is no wonder that Ex-Im is sometimes referred to as “Boeing’s Bank.”
In fact, the Sunlight Foundation found that 19 of the top 20 recipients of Ex-Im largesse lobbied congress to extend the bank. In the process, these companies have shaped the bank to provide highly favorable loans. Not only do US firms not need this welfare, foreign recipients are completely undeserving of these handouts. Foreign firms that have received Ex-Im loans include Russian oligarchs that supply arms to Syria and Iran, State owned airlines, and a Mexican energy conglomerate.
Supporters of Ex-Im claim that the bank helps small businesses. But in reality, small businesses do not have the resources and connections to compete for Ex-Im subsidies and so less than 1 percent of 1 percent of small business benefit from subsidies distributed by the bank.
If that were not bad enough, the bank has come under scrutiny
because of for numerous cases of fraud and corruption that have been uncovered by the Inspector General and Government Accountability Office (GAO). In the past six years alone, there have been 85 criminal indictments, 48 criminal judgments, and a quarter billion in fines, restitution, and forfeiture from investigations into Ex-Im. The Heritage Foundation has noted that job numbers touted by bank officials as part of Ex-Im’s necessity have been subject to unabashed criticism from the GAO.
Not only are Ex-Im’s loans unnecessary, they are also costly. According to the Congressional Budget Office, reauthorizing the bank will cost taxpayers $2 billion over the next decade. Taxpayers can no longer afford to finance this crony capitalism, especially in today’s environment of tight budgets.
Urge your Congressman to oppose reauthorization of the Export-Import Bank by calling 202-224-3121