The Export Import Bank, criticized for its ties to fraud, waste and abuse, has left taxpayers on the hook for $150 million dollars thanks to another reckless loan.
In 2012 Ex-Im provided $280 million to NewSat, an Australian satellite company, to purchase a satellite from U.S. based Lockheed Martin. Just months after receiving the loan, NewSat declared bankruptcy.
This disgraceful loan has led to House Oversight and Government Reform Committee investigating Ex-Im’s financing of the satellite company. Acting Inspector General of Ex-Im, Mike McCarthy, admitted that since NewSat declared bankruptcy the deal has led to the loss of at least $150 million in taxpayer funds.
Ex-Im President Fred Hochberg defending the NewSat deal describing it as “a project that’s in labor” and arguing that these careless loans are “what capitalism is about.” Aside from the absurdity of these statements and Hochberg’s sad attempt to tone down yet another loan failure, had Ex-Im done their homework, this million dollar disaster could have been avoided.
A report released by NewSat shows the company’s financial problems and irresponsible spending patterns, at one point spending $1.2 million on travel alone in a three year span. Taxpayers should be outraged at the millions of taxpayer dollars Ex-Im wastes loaning mismanaged foreign companies.
Perhaps most concerningly, it appears that former CEO of NewSat and Chairman Fred Hochberg had established a business relationship long before Ex-Im handed out the multi-million dollar loan. This cozy relationship yet again raises questions about Ex-Im working with companies based purely on political connections.
The outdated Ex-Im Bank is set to expire at the end of the month and supporters of the bank are frantically searching for a way they can to hold on to this instrument of crony capitalism. Congress should put an end to the culture of corporate welfare and political favoritism and end the Ex-Im Bank.