[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








                       OVERSIGHT OF EFFORTS TO
                     REFORM THE EXPORT-IMPORT BANK
                          OF THE UNITED STATES

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON MONETARY

                            POLICY AND TRADE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                                AND THE

                 SUBCOMMITTEE ON HEALTH CARE, BENEFITS

                        AND ADMINISTRATIVE RULES

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 15, 2015
                               __________

  Printed for the use of the Committee on Financial Services and the 
              Committee on Oversight and Government Reform

                           Serial No. 114-12
                      Financial Services Committee

                            Serial No. 114-9
               Oversight and Government Reform Committee


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking 
    Vice Chairman                        Member
PETER T. KING, New York              CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
SCOTT GARRETT, New Jersey            GREGORY W. MEEKS, New York
RANDY NEUGEBAUER, Texas              MICHAEL E. CAPUANO, Massachusetts
STEVAN PEARCE, New Mexico            RUBEN HINOJOSA, Texas
BILL POSEY, Florida                  WM. LACY CLAY, Missouri
MICHAEL G. FITZPATRICK,              STEPHEN F. LYNCH, Massachusetts
    Pennsylvania                     DAVID SCOTT, Georgia
LYNN A. WESTMORELAND, Georgia        AL GREEN, Texas
BLAINE LUETKEMEYER, Missouri         EMANUEL CLEAVER, Missouri
BILL HUIZENGA, Michigan              GWEN MOORE, Wisconsin
SEAN P. DUFFY, Wisconsin             KEITH ELLISON, Minnesota
ROBERT HURT, Virginia                ED PERLMUTTER, Colorado
STEVE STIVERS, Ohio                  JAMES A. HIMES, Connecticut
STEPHEN LEE FINCHER, Tennessee       JOHN C. CARNEY, Jr., Delaware
MARLIN A. STUTZMAN, Indiana          TERRI A. SEWELL, Alabama
MICK MULVANEY, South Carolina        BILL FOSTER, Illinois
RANDY HULTGREN, Illinois             DANIEL T. KILDEE, Michigan
DENNIS A. ROSS, Florida              PATRICK MURPHY, Florida
ROBERT PITTENGER, North Carolina     JOHN K. DELANEY, Maryland
ANN WAGNER, Missouri                 KYRSTEN SINEMA, Arizona
ANDY BARR, Kentucky                  JOYCE BEATTY, Ohio
KEITH J. ROTHFUS, Pennsylvania       DENNY HECK, Washington
LUKE MESSER, Indiana                 JUAN VARGAS, California
DAVID SCHWEIKERT, Arizona
ROBERT DOLD, Illinois
FRANK GUINTA, New Hampshire
SCOTT TIPTON, Colorado
ROGER WILLIAMS, Texas
BRUCE POLIQUIN, Maine
MIA LOVE, Utah
FRENCH HILL, Arkansas

                     Shannon McGahn, Staff Director
                    James H. Clinger, Chief Counsel
               Subcommittee on Monetary Policy and Trade

                   BILL HUIZENGA, Michigan, Chairman

MICK MULVANEY, South Carolina, Vice  GWEN MOORE, Wisconsin, Ranking 
    Chairman                             Member
FRANK D. LUCAS, Oklahoma             BILL FOSTER, Illinois
STEVAN PEARCE, New Mexico            ED PERLMUTTER, Colorado
LYNN A. WESTMORELAND, Georgia        JAMES A. HIMES, Connecticut
MARLIN A. STUTZMAN, Indiana          JOHN C. CARNEY, Jr., Delaware
ROBERT PITTENGER, North Carolina     TERRI A. SEWELL, Alabama
LUKE MESSER, Indiana                 PATRICK MURPHY, Florida
DAVID SCHWEIKERT, Arizona            DANIEL T. KILDEE, Michigan
FRANK GUINTA, New Hampshire          DENNY HECK, Washington
MIA LOVE, Utah
              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK, MULVANEY, South Carolina       BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Massachusetts              BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                    Sean McLaughlin, Staff Director
                  Rachel Weaver, Deputy Staff Director
                    Andrew Dockham, General Counsel
                        Laura Rush, Chief Clerk
                 David Rapallo, Minority Staff Director
      Subcommittee on Health Care, Benefits & Administrative Rules

                    JIM JORDAN, Jr., Ohio, Chairman
TIM WALBERG, Michigan,               MATT CARTWRIGHT, Pennsylvania, 
SCOTT DesJARLAIS, Tennessee              Ranking Member
TREY GOWDY, South Carolina           ELEANOR HOLMES NORTON, District of 
CYNTHIA M. LUMMIS, Wyoming               Columbia
MARK MEADOWS, North Carolina         BONNIE WATSON COLEMAN, New Jersey
RON DeSANTIS, Florida                MARK DeSAULNIER, California
MICK MULVANEY, South Carolina Vice   BRENDAN F. BOYLE, Pennsylvania
    Chair                            JIM COOPER, Tennessee
MARK WALKER, North Carolina          MICHELLE LUJAN GRISHAM, New Mexico
JODY B, HICE, Georgia
EARL L. ``BUDDY'' CARTER, Georgia


















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 15, 2015...............................................     1
Appendix:
    April 15, 2015...............................................    67

                               WITNESSES
                       Wednesday, April 15, 2015

Gianopoulos, Kimberly, Director, International Affairs and Trade, 
  U.S. Government Accountability Office..........................    13
Hochberg, Hon. Fred P., President and Chairman, Export-Import 
  Bank of the United States......................................     8
McCarthy, Michael T., Acting Inspector General, Export-Import 
  Bank of the United States, accompanied by Mark S. Thorum, 
  Assistant Inspector General for Inspections and Evaluations, 
  Export-Import Bank of the United States........................    11
Sheets, Hon. Nathan, Under Secretary for International Affairs, 
  U.S. Department of the Treasury................................    10

                                APPENDIX

Prepared statements:
    Cartwright, Hon. Matt........................................    68
    Gianopoulos, Kimberly........................................    70
    Hochberg, Hon. Fred P........................................    89
    McCarthy, Michael T., and Thorum, Mark S.....................   130
    Sheets, Hon. Nathan..........................................   141

              Additional Material Submitted for the Record

Heck, Hon. Denny:
    Written statement of a group of State Governors who support 
      reauthorization of the Ex-Im Bank..........................   145
Huizenga, Hon. Bill:
    Article from The Wall Street Journal entitled, ``Justice 
      Department Charges Former Export-Import Bank Official With 
      Bribery,'' dated April 14, 2015............................   149
    Article from The Wall Street Journal entitled, ``Officials at 
      Ex-Im Bank Face Investigations,'' dated June 23, 2014......   152
Moore, Hon. Gwen:
    Slides pertaining to Ex-Im Bank..............................   155
    Article from the Free Republic entitled, ``Cruz under fire 
      from Texas businesses (Export-Import Bank),'' dated 
      February 27, 2015..........................................   158
    Written statement of the National Association of 
      Manufacturers..............................................   160

 
                        OVERSIGHT OF EFFORTS TO
                     REFORM THE EXPORT-IMPORT BANK
                          OF THE UNITED STATES

                              ----------                              


                       Wednesday, April 15, 2015

             U.S. House of Representatives,
                           Subcommittee on Monetary
                                  Policy and Trade,
                           Committee on Financial Services,
                                     joint with the
                       Subcommittee on Health Care,
                 Benefits and Administrative Rules,
                                 Committee on Oversight and
                                          Government Reform
                                                   Washington, D.C.
    The subcommittees met, pursuant to notice, at 10:01 a.m., 
in room 2154, Rayburn House Office Building, Hon. Jim Jordan 
[chairman of the Health Care, Benefits and Administrative Rules 
Subcommittee] presiding.
    Members present from the Monetary Policy and Trade 
Subcommittee: Representatives Huizenga, Mulvaney, Lucas, 
Pearce, Stutzman, Pittenger, Messer, Schweikert, Guinta, Love; 
Moore, Foster, Carney, Sewell, Murphy, Kildee, and Heck.
    Members present from the Health Care, Benefits and 
Administrative Rules Subcommittee: Representatives Jordan, 
Walberg, DesJarlais, Gowdy, Meadows, DeSantis, Mulvaney, 
Walker, Hice, Carter; Cartwright, and Watson Coleman.
    Ex officio present: Representatives Hensarling, Chaffetz, 
Waters, and Cummings.
    Also present: Representatives Posey, Duffy, Blum, Clay, and 
Green.
    Chairman Jordan. The subcommittees will come to order. We 
have interest from several of the members of the respective 
full committees who would like to participate. So I ask 
unanimous consent that those colleagues be allowed to fully 
participate in today's hearing. Without objection, it is so 
ordered.
    I want to welcome our witnesses today. We will get to your 
introductions in just a minute. But we want to start--and you 
know how this works. Most of you have done this before. We will 
start with opening statements.
    So I recognize the gentleman from Michigan, the chairman of 
the Monetary Policy and Trade Subcommittee, Mr. Huizenga.
    Chairman Huizenga. Thanks, Chairman Jordan. I appreciate 
your willingness to hold this joint hearing on this important 
issue to discuss the Export-Import Bank.
    This hearing will examine the role of the Ex-Im Bank, the 
2012 authorization of the Bank by Congress, and Ex-Im's 
progress on implementing the reforms and recommendations made 
by the GAO and the Ex-Im Bank's Office of Inspector General.
    Many of this, we all know. We are familiar with the 
history. The Bank was established by Executive Order in 1934, 
and became an independent agency in 1945 with the mission to 
support domestic job creation in the United States. The Export-
Import Bank is intended to facilitate the export of U.S. goods 
and services to international markets by providing working 
capital guarantees, export credit insurance, loan guarantees, 
and direct loans.
    Since its creation, Ex-Im's taxpayer subsidy has grown 
exponentially to a whopping $140 billion cap. As the national 
debt continues to climb over $18 trillion, many fear that these 
taxpayer-backed loan guarantees put taxpayer dollars at 
significant risk and raise concern that the Ex-Im is looming 
towards yet another bailout that the American people simply 
cannot afford.
    It has been claimed that while the Export-Import Bank is a 
self-sustaining agency that receives a net appropriation of 
zero from Congress, because these Bank loans are backed by the 
full faith and credit of the U.S. Government, I believe, as do 
many others, that the U.S. taxpayers are at risk if the Bank's 
projects fail.
    It is important to note that the Bank has already received 
a congressional bailout. The Export-Import Bank operated at a 
loss every year from 1982 to 1985. And by 1991, the Bank's 
accumulated deficit hit $7.5 billion.
    In fact, I was an intern here on the Hill in the spring of 
1991. And it was a raging debate, what was happening and what 
to do about it. And many will recall that it was the closing 
days of the George H.W. Bush Administration. Democrats were 
firmly in control of both the House and the Senate and were 
trying to figure out what to do.
    The solution was that from 1992 to 1996, Ex-Im received 
$9.92 billion in direct appropriations from Congress and the 
American taxpayers. In 2012, Congress reauthorized Ex-Im while 
also mandating several modest reform provisions that shared 
broad bipartisan support. These reform provisions required that 
the Ex-Im Bank submit a business plan to Congress, as well as 
respond to a review of Ex-Im's risk management practices 
conducted by GAO.
    Additionally, the reauthorization directed the Treasury 
Secretary to initiate--I think that is a key word--and pursue 
multilateral negotiations to reduce, with the ultimate goal of 
eliminating, all trade-distorting export subsidies, including 
those for aircraft, which has been a central theme in this 
discussion.
    The reauthorization further required that the Ex-Im Bank 
categorize each loan and long-term guarantee, classifying them 
as necessary to either: one, assume risk that the private 
sector would not undertake, in other words, be that lender of 
last resort; two, overcome limits in private finance; or three, 
meet competition from foreign export credit agencies.
    Although these reforms were intended to better protect 
taxpayers and make the Export-Import Bank more accountable, the 
Bank, and I believe Treasury, continue to ignore congressional 
intent and instead operate with too little accountability and 
too little regard for the interests of hardworking American 
taxpayers.
    The most recent authorization of the Ex-Im Bank's charter 
occurred in September of 2014 and expires this June 30th. As 
Congress continues its robust oversight of the Export-Import 
Bank, it is important to note that the Ex-Im Bank cannot engage 
in new business without congressional authorization; however, 
if the authorization does lapse, Ex-Im would be obligated to 
honor all of its existing loans and guarantees. In other words, 
nothing would change. But it would be prohibited from entering 
into new business.
    Today, I look forward to hearing from our chairman of the 
Export-Import Bank; the Treasury Under Secretary for 
International Affairs; both the acting and assistant inspectors 
general; and the GAO in regards to the Bank's progress or, 
frankly, lack thereof on implementing these clearly-defined 
reforms that had come out at the last authorization.
    So thank you, Mr. Chairman. With that, I yield back.
    Chairman Jordan. I thank the chairman for his statement.
    We now recognize the gentlelady from Wisconsin, Ms. Moore, 
ranking member on the Monetary Policy and Trade Subcommittee.
    Ms. Moore. Thank you so much, Mr. Chairman. And what a 
privilege it is to be here with our guests today.
    Before I get into the substance of my comments, I feel 
really compelled to address some of the mischaracterizations of 
the Bank. And I am very disturbed that this debate been 
hijacked by strawmen arguments.
    I struggled to understand how this debate had become so 
dispatched from the reality of how the Bank operates, that is 
until I read the story in the Hill about Senator Cruz's lack of 
support of the Bank, despite strong support of the Bank from 
small businessmen in Texas, and his characterization of this 
being ``low-hanging fruit.'' Low-hanging fruit, of course, 
being proxy language for the Bank being low-hanging fruit in 
pursuit of a larger goal of really dismantling any kind of 
governmental assistance. Really, that is the sort of Tea Party 
argument that government should not help anybody. And really, 
the larger goal of dismantling Social Security, Medicare, and 
the entire social safety net. Okay, tangent is over.
    So in response to the realities of global competition and 
business, and in recognition that the Bank is a U.S. job 
creation engine, reauthorization in the past has been 
bipartisan. And we have very little legislative time before the 
current authorization expires on June 30th. We have a majority 
in the House, not a majority of Democrats, a majority in the 
House supportive of reauthorization. We have legislative 
language with cosponsors demonstrating that.
    And I hope that this hearing will reset the debate and be 
grounded in fact. The Bank is not a government-funded utility 
that offers below-market financing terms. It is not.
    I will yield the rest of my time to the gentlelady from 
California, the ranking member of the full Financial Services 
Committee, Ms. Waters.
    Ms. Waters. Thank you very much, Ms. Moore. And thank you, 
Mr. Chairman.
    I am sure the irony of today's hearing to discuss the 
implementation of the 2012 reauthorization of the Ex-Im Bank is 
not lost on anyone. Today, not one, but two committees are 
holding this hearing on the progress of a 3-year-old law, just 
as we are only 32 legislative days away from the expiration of 
the Bank's charter.
    Despite this imminent threat to our economic recovery and 
to American workers, the Financial Services Committee has yet 
to hold a single legislative hearing to reauthorize the Bank. 
Over the course of its 80-year history, the Bank's charter has 
been renewed 16 times, supporting hundreds of thousands of jobs 
and leveling the playing field for American businesses large 
and small so they can compete for business in the global 
marketplace.
    Earlier this year, my colleagues Gwen Moore, Denny Heck, 
minority whip Steny Hoyer, and I introduced legislation to 
reform and reauthorize the Bank. The proposal has the support 
of 190 House Democrats. Another proposal introduced this year 
to reauthorize the Bank has garnered the support of 61 House 
GOP Members.
    With the majority of House lawmakers officially on record 
in support of the Bank, it is clear that this Congress could 
pass an extension of the Bank's charter today. This begs the 
question, what exactly are we doing here? Unfortunately, the 
answer is evident. We are wasting time while the anti-
government, anti-American-worker wing of the Republican party 
works desperately to let the clock run out on the Ex-Im Bank, 
on U.S. businesses, and on the many American taxpayers whose 
jobs and families count on its support.
    Over the past few years, the Bank has become more 
transparent, more efficient, and more accountable to the 
American public, while at the same time the Republican party by 
every one of these measures has become increasingly less so.
    And what is so surprising is that my colleagues on the 
opposite side of the aisle talk about support of business. 
Yesterday, we were engaged on the Floor where they came up with 
measures supposedly in support of businesses. They didn't want 
banks to go out of business because they feel that they should 
be able to charge as high interest rates as they want on 
manufactured housing, and on and on and on. Business, business, 
business, support for business.
    But what are we doing now? We are literally saying to those 
businesses that are supported by Ex-Im and all of the suppliers 
that go along with that, that this government does not care 
about them and their ability to do business, they don't care 
about job creation, and they don't care that China and other 
countries are cleaning our clock as they support their export 
interests.
    So I yield back the balance of my time. And I guess I will 
continue to waste my time and stay here to see what some are 
talking about. Because I just don't get it. I don't understand 
it. I yield back.
    Chairman Jordan. I thank the gentlelady.
    I now recognize the chairman of the full Oversight and 
Government Reform Committee, the gentleman from Utah, Mr. 
Chaffetz.
    Chairman Chaffetz. Thank you. I appreciate both bodies 
here. I think this is a very worthwhile exercise to hear out 
the issues. Because this is a group, an institution, the 
Export-Import Bank, that has been fraught with problems and 
fraud and lack of oversight.
    The fundamental question is, should Americans continue to 
subsidize the risk that is incurred by this Bank? It has failed 
consistently to meet its congressionally-imposed mandates. The 
Bank continues to attracts controversy. Just last night, I was 
reading articles about the Justice Department charging a former 
Ex-Im Bank official with bribery. That literally happened 
yesterday. On 19 different occasions, it cites in the article. 
And the inspector general stated that there are numerous open 
fraud investigations. It begs a lot of questions in support for 
this hearing. I am glad we are doing this jointly with the 
Financial Services Committee.
    With that, I yield back.
    Chairman Jordan. I now recognize the gentleman from 
Pennsylvania, the ranking member of the Health Care, Benefits 
and Administrative Rules Subcommittee, Mr. Cartwright.
    Mr. Cartwright. Thank you, Mr. Chairman. And welcome to all 
of our witnesses. I do look forward to your testimony today.
    Today's hearing is intended to examine the Ex-Im Bank's 
effort to implement congressionally-mandated reforms, as well 
as the implementation of recommendations provided by GAO and 
the Bank's inspector general.
    The Ex-Im Bank's transactions support billions of dollars 
in exports and hundreds of thousands of American jobs by 
supporting U.S. companies that export to foreign markets. The 
Bank has been a stellar steward of taxpayer funds, maintaining 
a portfolio with a default rate of just 0.175 percent. And the 
Bank generates a surplus to the U.S. Treasury that results in 
deficit reduction.
    Since 2012, the Bank has implemented all of the 
requirements in the 2012 reauthorization. It has addressed 15 
of the 16 GAO recommendations. It has concurred with 140 of 142 
IG recommendations. The Bank continues to work with GAO on the 
one remaining recommendation and the IG on the two unresolved 
recommendations.
    The Ex-Im Bank plays a role in leveling the playing field 
for American businesses competing in the global marketplace. 
There are 60 other countries with foreign-export credit 
agencies that seek to ensure their home country businesses are 
winning at export sales. The Ex-Im Bank makes financing 
available to U.S. businesses to compete with these foreign 
manufacturers on the merits of their goods and services and not 
government-backed cut-rate financing.
    In Fiscal Year 2014, 89 percent of Bank transactions 
benefited small business exporters of U.S.-made goods and 
services. These are deals that could not and would not be done 
by the private sector alone, and are the perfect example of the 
kinds of public-private partnerships we need to continue to do 
in order to grow our economy. In my own district in 
northwestern Pennsylvania, the Bank supports over $63 million 
in exports, benefiting 8 companies and over 400 jobs.
    For most of its 80 years, the Ex-Im Bank has received 
support from both Republicans and Democrats. In fact, Congress 
has consistently reauthorized this Bank 16 times without fail. 
The Bank's reauthorization is supported by a diverse coalition, 
including the U.S. Chamber of Commerce, the National Waste and 
Recycling Association, and Air Products and Chemicals, Inc., 
which has two large plants in my district.
    But this year, a group I referred to in the past as the 
``shutdown crowd'' has decided to the hold the Bank's 
reauthorization hostage. Look, playing such a dangerous game is 
bad for American businesses, American exports, and, most 
importantly, American jobs. Honest congressional oversight is 
an extremely effective tool for achieving government reforms. 
Today's hearing provides an opportunity effectively to examine 
the Bank's efforts to strengthen its policies and procedures, 
while holding the Bank accountable for implementation of 
reforms and assuring the American public that this Bank 
continues to contribute to our economy.
    And with that, Mr. Chairman, I am going to yield 1 minute 
to our colleague, Mr. Heck, of the Financial Services 
Committee.
    Mr. Heck. Thank you, sir. And thank you, Mr. Chairman.
    That sound you hear in the background is the ticking of the 
clock. There are, count them, exactly 32 legislative days until 
the Ex-Im Bank expires. And yet, it has been 1,394 days since 
the committee last held a markup on reauthorization. You don't 
have to be a math savant to figure out that is 3 years and 10 
months for what was a 2-year reauthorization.
    I welcome Chairman Huizenga's albeit belated attention to 
the most urgent legislative deadline before the Financial 
Services Committee. Bar none, no exception. There are two long-
term reauthorization bills in the House. They have 250 sponsors 
between the 2 of them. There is a full majority in this 
committee who wants to pass it out. There is a full majority of 
the House who wants to pass it out. It is way past time to 
schedule a legislative markup on reauthorization of the Export-
Import Bank, period.
    Mr. Cartwright. Thank you, Mr. Heck.
    Mr. Chairman, I hope today's hearing will highlight the 
good work of the Ex-Im Bank, resolve any outstanding questions 
concerning the 2012 reforms, and provide additional support for 
the Bank's continuing reauthorization.
    Thank you, Mr. Chairman. And I yield back.
    Chairman Jordan. I thank the gentleman. And I actually hope 
for a different outcome.
    Today's hearing is exactly what the Oversight Committee is 
supposed to focus on, and frankly, what Congress is supposed to 
focus on: eliminating waste, fraud, and abuse, things that have 
been going on at the Ex-Im Bank for a long, long time.
    The Export-Import Bank is little more than a fund for 
corporate welfare. Those aren't my words. Those are the words 
of Senator Barack Obama in 2006. He was right. The Bank was and 
is corrupt beyond repair. And everyone knows it. But 9 years 
later, the Bank still exists. Why? The answer to that question 
represents the worst of politics.
    Every time the Bank is up for reauthorization, deep pockets 
of special interest and their friends on K Street descend on 
Washington with ``Chicken Little'' fables about how small 
businesses across America will suffer if the Bank's charter is 
allowed to expire.
    The reality is that 99.9 percent of small businesses across 
America get no assistance from the Ex-Im Bank. The Bank's 
beneficiaries are some of the largest companies in America. And 
I don't fault large companies. They are great. We are glad they 
are here. We are glad they do the great things they do in our 
economy. But they don't need middle-class taxpayers' help to 
succeed.
    And, of course, one company has received most of the 
assistance from the Bank, and that is Boeing. Many have called 
Ex-Im the ``Bank of Boeing,'' and for good reason. In the last 
fiscal year, 40 percent of all authorized funds from the Bank 
went to one company: Boeing. That is \1/2\ times more support 
than was received by all of the small businesses combined.
    And the degree to which small business are actually small 
is not entirely clear. In November 2014, a Reuters analysis 
revealed that the Bank listed companies owned by billionaires 
Warren Buffett and Mexico's Carlos Slim as small businesses.
    Besides big corporations who don't need the support, the 
other main beneficiaries are Ex-Im Bank employees themselves. 
Recently, Michael Whalen was hired by the Bank as the vice 
president of structured finance. He comes from Solar Reserve, 
which had a junk bond rating, but still received $737 million 
taxpayer dollars from the Obama Administration program that 
supported Solyndra, and has been a candidate for Ex-Im 
financing.
    There is Tom Kiernan. He joined the Bank's advisory 
committee earlier this year. And he is also chief executive of 
the American Wind Energy Association, represents many companies 
that have received Ex-Im support.
    The revolving door between Boeing and the government is 
especially troubling. Corey Golden is the senior director of 
Boeing. Before that, he was a loan officer at the Export-Import 
Bank, overseeing relationships with foreign airlines. So now 
think about this: He worked for Ex-Im, which gives 40 percent 
of its financing to Boeing, and now he works for Boeing. Such a 
deal.
    There is also Bill Daley, who resigned from Boeing's board 
of directors in January 2011 to become White House Chief of 
Staff. And former Secretary of Commerce, John Bryson, who left 
Boeing's board to join the Obama cabinet.
    In 2006, then-Senator Obama called the Bank out for being a 
fund for corporate welfare. In 2012 the President spoke at a 
Boeing plant and joked that he deserved a gold watch because, 
``I am selling your stuff all the time.''
    Corporate connectedness, corporate cronyism. And there is 
also just flat-out corruption at the Ex-Im Bank. Just 
yesterday, a former employee of the Bank was indicted for 
bribery. Last summer, this committee held a hearing related to 
numerous investigations into fraud at the Bank. Two officials 
were accused of accepting gifts and kickbacks from companies 
seeking export financing. One of these employees, an official 
with significant responsibility over decisions to award 
taxpayer-backed export assistance, is accused of accepting cash 
payments from an applicant company. That is a nice way of 
saying ``bribes.''
    Two more officials were accused of improperly awarding 
contracts to favorite companies. All four employees referred to 
the Ex-Im Bank's Office of Inspector General, and the 
investigation is currently being handled jointly by the IG and 
the Department of Justice.
    Given these issues, many have asked, is the Bank fixable? 
In 2012, Congress engaged in the noble task of attempting to 
reform the dysfunction at the Bank. Mr. Hochberg, our guests, 
and others this morning are likely to say that the Bank has 
implemented the reforms. I respectfully disagree. And I think 
the GAO has some concerns about what they haven't done, as 
well. The heart of the matter, however, is that the Bank's very 
existence is anathema to free enterprise and American values.
    Members of Congress will face many difficult decisions and 
tough votes in the months and years ahead. But reauthorization 
of the Ex-Im Bank is not one of them. This is an easy call. 
This Bank is corrupt and it should be eliminated. It should be 
allowed to wind down in the natural course of events and not be 
reauthorized.
    And with that, I yield back.
    We will now recognize our witnesses. And thank you all 
again for being here.
    We will start with Mr. Hochberg. Mr. Fred Hochberg is the 
chairman and president of the U.S. Export-Import Bank. The 
Honorable Nathan Sheets is the Under Secretary for 
International Affairs at the U.S. Department of the Treasury. 
Mr. Mike McCarthy is the acting inspector general at the U.S. 
Export-Import Bank. We have Mr. Mark Thorum, assistant 
inspector general for inspections and evaluations at the Ex-Im 
Bank. And Ms. Kimberly Gianopoulos is the Director of 
International Affairs and Trade at the U.S. Government 
Accountability Office.
    Again, welcome to all of you. We swear folks in here in 
this committee. So if you will please stand, and raise your 
right hand.
    [Witnesses sworn.]
    Let the record reflect that all witnesses answered in the 
affirmative. Thank you. You may be seated.
    Mr. Hochberg, we will start with you. You have all done 
this before. You get 5 minutes. You have the lighting system 
there, the clock in front of you. Try to keep it as close as 
you can because we have five witnesses, and I think four of you 
are actually going to be making opening statements.
    Mr. Hochberg, you are recognized for your 5 minutes.

  TESTIMONY OF THE HONORABLE FRED P. HOCHBERG, PRESIDENT AND 
       CHAIRMAN, EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Hochberg. Thank you. Chairmen, Ranking Members, and 
distinguished members of the subcommittees, thank you for 
inviting me to testify about the progress that Ex-Im has made 
over the past several years.
    In May of 2012, Ex-Im was reauthorized with overwhelming 
bipartisan support: 330 Members in the House; and 78 in the 
Senate. Since then, the Bank has continued to support U.S. 
private sector job growth, including 164,000 jobs in the last 
year alone.
    We also generated revenue for the taxpayers, including $675 
million we sent to Treasury for deficit reduction.
    Over the past 3 years, we have implemented each and every 
requirement called for in our 2012 reauthorization. In 2012, 
Congress required Ex-Im to do the following.
    Submit a business plan and a textile report. Both were 
submitted in the fall of 2012. I have all of those reports 
right here.
    Monitor and report default rates. We have issued 12 
quarterly reports.
    Provide Federal Register notices for transactions exceeding 
$100 million. We have posted 88.
    Publish economic impact procedures and methodology. We 
updated and implemented new standards in April of 2013.
    Examine the Bank's support for small business and issue a 
report. We submitted a report in November of 2012. And small 
businesses directly accounted for nearly 90 percent of all 
transactions and about 39 percent of the exports we financed by 
dollar value in 2014.
    Include a textile representative on our advisory committee, 
a position now held by the president of Morrison Textiles of 
Fort Lawn, South Carolina.
    Develop formal due diligence and know-your-customer 
standards for lender partners. Both were completed in May of 
2014.
    Add a non-subordination requirement to our policy handbook. 
This was published in January of 2013.
    Categorize the purpose of loans and guarantees. This is now 
included in the annual report.
    Review and report on our content policy. That was completed 
in May of 2013.
    Update and expand Iran sanction certifications. That was 
completed in September of 2012.
    Update our IT systems. We have updated our computer 
hardware and software, and have hired a new chief information 
officer.
    Provide a report on the implementation of GAO 
recommendations. That was completed in November of 2012.
    Congress required Treasury to negotiate an end to export 
credit financing. They have issued three annual reports to 
Congress on their progress.
    And finally, GAO and the IG were asked to do several 
studies, which they too completed.
    In my written testimony, I have further detailed how we 
have implemented all of these requirements.
    Having run a small business, I know how important it is to 
continually identify and become stronger and sleeker as an 
institution. The oversight provided by Congress, the IG, and 
the GAO has helped us to do just that.
    Since the 2012 reauthorization, GAO has submitted a total 
of 16 recommendations, and we agreed with all of them.
    Another part in our efforts to improve has been the IG. And 
I value the IG's role. I meet with him once a month. And our 
chief risk officer meets with him far more frequently. Since 
2012, the IG has issued 142 recommendations. Ex-Im fully 
concurrs with 140, and we are working together on the last two.
    Additionally, Ex-Im has proactively implemented risk 
management improvements to further ensure we remain faithful 
stewards of taxpayer dollars. I am just going to name two: we 
increased staffing in our asset management division by 33 
percent; and we implemented mandatory ethics training for all 
employees that goes well beyond Federal requirements.
    Let me take a moment to thank our employees, the inspector 
general, and the Department of Justice for the work they have 
done to expose and address an incident of improper activity at 
the Bank, which was made public yesterday. Let me repeat, we 
have zero tolerance for waste, fraud, and abuse at Ex-Im.
    Our focus on risk management is demonstrated by our low 
default rate of 0.174 percent as of December 2014. While our 
transactions rarely default, when they do, claims are made by 
fees and interest paid by Bank customers, not taxpayers.
    So in closing, let me add there are 59 other export credit 
agencies around the world aggressively fighting for jobs in 
their countries. While we consider past and future reforms, I 
trust the committee will keep in mind this global competition.
    And we appreciate the committee's interest. I look forward 
to working with you to continue empowering your constituents to 
export more and hire more American workers. Thank you. And I 
look forward to answering your questions.
    [The prepared statement of Mr. Hochberg can be found on 
page 89 of the appendix.]
    Chairman Jordan. Thank you.
    Mr. Sheets?

 TESTIMONY OF THE HONORABLE NATHAN SHEETS, UNDER SECRETARY FOR 
     INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF THE TREASURY

    Mr. Sheets. Chairman Jordan, Chairman Huizenga, Ranking 
Member Moore, Ranking Member Cartwright, and distinguished 
members of the subcommittees, thank you for the opportunity to 
testify today on efforts of the Treasury and the Administration 
to discipline the use of government export financing.
    Treasury has been and continues to be guided by three core 
principles in this effort. First, there should be a level 
playing field for U.S. exporters, allowing them to compete 
based on the quality and price of their goods and services, 
rather than on the generosity of any government-supported 
financing.
    Second, China and other large emerging market economies, 
which now account for a major share of all official export 
financing, should participate in and abide by an international 
rules-based framework.
    And third, the terms and conditions of official export 
credits should be as market-oriented as possible to limit trade 
distortions and help ensure that this support complements, 
rather than crowds out, market financing.
    As we pursue these efforts, we recognize that curtailing 
U.S. export financing unilaterally could undermine our 
exporters' ability to compete, potentially causing them to lose 
business to foreign competitors whose governments continue to 
provide that support, as well as potentially resulting in the 
loss of American jobs.
    Moreover, unilateral action by the United States without 
similar moves by foreign governments could weaken our ability 
to negotiate more robust disciplines with counterparts abroad.
    Fundamental changes have occurred in the global export 
finance landscape over the past decade. Chief among them has 
been a dramatic increase in official export financing provided 
by China and other large emerging market economies that do not 
participate in the OECD's arrangement on officially-supported 
export credits. Unless these countries operate within the 
international export framework, U.S. exporters could face an 
uneven playing field.
    Bringing all major providers of official export financing, 
including China and the large emerging market economies, into 
an international rules-based framework is an essential step. 
Consistent with this, we are making meaningful progress 
multilaterally through the International Working Group on 
Export Credits and bilaterally with China in our strategic and 
economic dialogue.
    Most recently, during President Obama's November 2014 
visit, China committed to take all steps necessary to advance 
the IWG initiative and to support comprehensive guideline 
coverage.
    With respect to the aircraft sector, the United States has 
worked for years to make the international guidelines on 
official export financing more market-oriented. These efforts 
have led most recently to the 2011 aircraft sector 
understanding, which substantially improved on the previous 
understandings in a number of ways, the most important being 
adoption of a system for pricing borrower risk that adjusts 
quarterly in response to evolving market conditions.
    We believe that the market-oriented nature of the 2011 ASU 
has contributed to a meaningful decline in demand for official 
export financing for aircraft. Even as the overall number of 
aircraft deliveries has increased since the 2011 ASU went fully 
into effect in 2013, we have seen both: one, a sharply falling 
proportion of large aircraft deliveries financed with official 
support globally; and two, a significant decline in Ex-Im Bank 
financing for U.S. exports of large aircraft. Even so, we will 
continue to explore opportunities to make additional progress.
    Now, let me conclude. Since 2012, we have worked to 
discipline the use of government export financing support in a 
way that minimizes trade distortions, helps ensure that 
government export financing complements market financing, and 
contributes to a level playing field for U.S. stakeholders.
    In sum, progress, although sometimes incremental, is indeed 
being made. And achieving further gains is a top priority for 
Treasury and the Administration in the period ahead.
    And I am happy to take your questions.
    [The prepared statement of Under Secretary Sheets can be 
found on page 141 of the appendix.]
    Chairman Jordan. Thank you.
    Mr. McCarthy?

  TESTIMONY OF MICHAEL T. MCCARTHY, ACTING INSPECTOR GENERAL, 
EXPORT-IMPORT BANK OF THE UNITED STATES, ACCOMPANIED BY MARK S. 
    THORUM, ASSISTANT INSPECTOR GENERAL FOR INSPECTIONS AND 
      EVALUATIONS, EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. McCarthy. Thank you, Mr. Chairman.
    I am pleased to be here to present the work of the Ex-Im 
Bank Office of Inspector General. I am joined by my colleague, 
Mark Thorum, who is the assistant IG for inspections and 
evaluations.
    You have our written testimony, which highlights the work 
that our professional auditors, inspectors, and special agents 
have done to promote efficiency and detect and deter fraud at 
Ex-Im Bank. Let me briefly cover a few highlights.
    Every year, we review our work and identify the top 
management challenges facing the Bank. Last fall, the OIG 
reported that the top challenge was managing risk, 
specifically, managing the Bank's core business activities to 
reduce the risk of loss to the Treasury and, by extension, the 
taxpayer.
    To manage that risk, we have recommended that the Bank 
should design an agency-wide risk management framework so that 
in addition to rating the risk of any individual transaction, 
the Bank is also evaluating and mitigating the risks generated 
by the overall composition of the portfolio and any outsized 
exposures that the Bank has in certain regions, industry 
sectors, or single companies.
    To accomplish this, we have recommended a chief risk 
officer, which the Bank has established. The Bank has also 
conducted stress testing and monitoring of exposure levels. We 
hope the Bank will build on these steps by developing and 
implementing key risk policies, covering both credit and non-
credit risks.
    We have also recommended improvements to due diligence and 
know-your-customer policies. And the Bank has deployed 
improvements in those areas.
    Finally, we have previously found that internal policies 
providing clear guidance to staff have not been prevalent at 
Ex-Im Bank. So we recommended that the Bank rely more on clear 
policies, controls, and documentation, and less on 
institutional knowledge. Many of our recommendations have been 
for specific internal control policies, which the Bank is 
working on implementing.
    Other critical challenges facing Ex-Im Bank are human 
capital management and information technology management. 
Without the ability to recruit and retain employees with the 
knowledge to execute complex financial transactions, and 
without an IT system that produces the data necessary to 
provide timely service, effectively manage and track programs, 
and conduct portfolio risk analysis, the Bank will be held back 
from accomplishing its mission of financing U.S. exports and 
domestic jobs.
    The 2012 reauthorization legislation included several 
provisions to increase reporting and transparency for Ex-Im 
programs. We have summarized our relevant work on those 
provisions in the written testimony. And we are happy to answer 
questions on those topics.
    I know the committees are interested in issues of fraud and 
corruption as they affect Ex-Im Bank. Our investigative unit 
gets results in this area. Since 2009, OIG investigations have 
yielded 80 criminal indictments and informations, 47 
convictions, $288 million in judgments, and 600 referrals of 
investigative intelligence back to the Bank for enhanced due 
diligence.
    The most common fraud schemes that we have encountered 
involve outside parties obtaining loans or guarantees through 
false representations and submission of false documents. 
Generally, our caseload has been external, not internal. But 
last summer, the committee was interested in reports that Ex-Im 
Bank employees had been removed or suspended based on OIG 
investigations. At that time, we could not provide additional 
information, but have since reported back to the committees on 
two closed administrative cases.
    And earlier this week, the Justice Department filed a 
bribery charge against a former Ex-Im loan officer. This is 
part of an ongoing investigation and a pending court preceding. 
So I hope you will understand that I am unable to provide 
details beyond the public court documents on that particular 
case. We expect that more information will be available in the 
near future. And we will share that with Congress as soon as it 
is legal and appropriate to do to.
    Mr. Chairman, this concludes my statement. And we are happy 
to answer questions.
    [The joint prepared statement of Mr. McCarthy and Mr. 
Thorum can be found on page 130 of the appendix.]
    Chairman Jordan. Thank you.
    Do I understand, Mr. Thorum, that you are not going to make 
an opening statement?
    Mr. Thorum. That is correct.
    Chairman Jordan. Okay. Thank you for being here.
    Ms. Gianopoulos, you are recognized for 5 minutes.

  TESTIMONY OF KIMBERLY GIANOPOULOS, DIRECTOR, INTERNATIONAL 
    AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Gianopoulos. Thank you, Mr. Chairman.
    Chairmen Jordan and Huizenga, Ranking Members Cartwright 
and Moore, and members of the subcommittees, thank you for the 
opportunity to be here today to discuss our recent work on the 
Export-Import Bank.
    Since the Bank's 2012 reauthorization, GAO has issued 
several reports on the Bank's operations. In my statement 
today, I will cover the following three areas: first, portfolio 
risk management; second, underwriting and fraud prevention 
processes; and third, exposure forecasting and reporting on 
estimates of the Bank's impact on U.S. jobs.
    First, I would like to talk about our work related to the 
Bank's portfolio risk management. In our reports dated March 
2013 and May 2013, we identified a number of weaknesses related 
to loss estimation, vintage analysis, stress testing, sub-
portfolio reporting, workload benchmarks, and resources for 
congressional mandates.
    For example, we found that the short-term forecast the Bank 
used to account for global economic changes could lead to 
underestimation of credit subsidy costs and loss reserves and 
allowances. We recommended that the Bank assess whether it was 
using the best available data for adjusting its loss estimates. 
As a result, in November 2013 it incorporated a longer-term 
forecast of global economic change into its loss estimation 
model.
    Overall, with regard to portfolio risk management, all six 
recommendations we made have been closed as implemented. 
Additionally, while we did not make any recommendations in our 
July 2014 report on wide-body jets, we reported information 
about the Bank's aircraft finance portfolio, as well as the 
financing by other credit agencies of these aircraft.
    As of March 31, 2014, the Bank's financial exposure in 
wide-body jets was $32 billion, representing about 28 percent 
of its overall financial exposure.
    The second area I would like to discuss is the Bank's 
underwriting and fraud prevention processes. In September 2014, 
we found that the Bank implemented many key aspects of its 
underwriting process. However, we identified some weaknesses in 
this process, as well as related documentation issues. For 
example, the Bank did not have procedures to ensure that 
applicants did not have delinquent Federal debt.
    We also noted weaknesses in the Bank's documentation of 
overall procedures related to fraud. Based on the Bank's 
responses, we are taking steps to close four of the six 
recommendations as implemented, and we are reviewing the Bank's 
response to the final two recommendations.
    In our August 2014 annual report on the Bank's monitoring 
of exports with a dual civilian and military use, we found that 
the Bank had financed three dual-use transactions in Fiscal 
Year 2012. However, we noted that the Bank did not have 
complete and timely information about whether the items were 
actually being used in accordance with the terms of the 
agreements and Bank policy. Therefore, we recommended that the 
Bank establish steps for staff to take when borrowers did not 
submit required documentation within required timeframes, and 
to ensure that these efforts are well-documented.
    We are in the midst of this year's review of the Bank's 
dual-use monitoring. And we will assess the Bank's progress in 
our upcoming report.
    Finally, in two reports issued during May 2013, we found 
weaknesses in both the Bank's exposure forecasting and its 
reporting of jobs supported. With regard to exposure 
forecasting, we noted that the Bank had not reassessed its 
forecasting assumptions to reflect changing conditions, nor had 
it conducted sensitivity analyses to assess and report the 
range of potential outcomes.
    In response, the Bank put in place new methodologies and 
created statistical models to validate its forecasts. So we 
consider these recommendations closed.
    We noted that the Bank had not reported the limitations in 
its calculations of the jobs supported by its financing. We 
recommended that the Bank improve reporting on the assumptions 
and limitations in the methodology and data used. The Bank's 
2013 and 2014 annual reports included greater detail on these 
issues. And therefore, we consider this recommendation closed.
    This concludes my opening remarks. Thank you again for the 
opportunity to testify. And I am happy to answer any questions 
the committees may have.
    [The prepared statement of Ms. Gianopoulos can be found on 
page 70 of the appendix.]
    Chairman Jordan. Thank you.
    The gentleman from Michigan is recognized for 5 minutes for 
questions.
    Chairman Huizenga. Thanks, Mr. Chairman.
    And actually, Ms. Gianopoulos, I want to make sure I heard 
you correctly. So, based on a 2014 report, you said that their 
portfolio is weighted to a 28 percent exposure to wide-body 
aircraft, is that correct?
    Ms. Gianopoulos. That is correct.
    Chairman Huizenga. Okay. Do you believe that this Bank 
could pass a Federal Reserve stress test?
    Ms. Gianopoulos. I understand that the Bank is engaged in 
stress testing of its portfolio now. I don't know what the 
current status is or if it could pass those types of judgments. 
We haven't done work in that area.
    Chairman Huizenga. It seems to me that portfolio risk--
which has been identified multiple times--a lack of economic 
forecasting; if you talk to any other bank, they have multiple 
models that are going forward, oftentimes getting castigated 
that they haven't added another or used a particular one--
ability to repay examinations. Have any of those things been 
done, to your knowledge?
    Ms. Gianopoulos. My understanding is that the Bank has 
focused on its estimates for its potential losses. And I know 
there are some updates to the Bank's processes with regard to 
both our recommendations and the IG's recommendations over the 
past few years since the reauthorization.
    Chairman Huizenga. How about reserve funds?
    Ms. Gianopoulos. I am not aware of updates to the processes 
for reserve funds.
    Chairman Huizenga. I guess with a taxpayer guarantee, maybe 
they don't have to worry about reserve funds, which would be 
nice for some of the other banks. I am sure that they would be 
interested in that.
    But Mr. Sheets, a quick question for you, as well. I think 
you aptly laid out in 2011 that there was an ``understanding'' 
for more orderly categorization or dealing with how these wide-
body aircraft deals were moving forward. It strikes me that if 
this is a decline, I would hate to see what an acceleration of 
those would be, if 28 percent of the portfolio is already 
weighted to wide-body aircraft.
    But you didn't mention the 2012 directive in the 
reauthorization, which specifically mentioned a discussion with 
the European Union about this particular situation. Why not? 
Why has that not been pursued?
    Mr. Sheets. Thank you. The discussion has, in fact, been 
carried on with our European counterparts about wide-body 
aircraft.
    Chairman Huizenga. But you didn't talk about that at all; 
is that just an oversight or--
    Mr. Sheets. I do believe it has, but not with the same 
emphasis.
    At the end of last year, our lead negotiator spoke to 
counterparts from Germany, France, and the United Kingdom, 
which are the countries that are our major competitors, about 
the scope--
    Chairman Huizenga. Just so I understand, at the end of 
2014, Treasury finally initiated that discussion?
    Mr. Sheets. I came to Treasury in 2014. But my 
understanding is that this has been an ongoing dialogue that we 
have had. And the major challenge we have, at least so far, is 
that these foreign counterparts are not enthusiastic about 
moving in this direction. But we are vigorously--
    Chairman Huizenga. The interesting thing is I have a fair 
number of contacts in Europe in the legislative branches. They 
are interested in pursuing that, as well. Europe is as, if not 
even more, broken than the United States. And I think that is 
absolutely imperative.
    Mr. Hochberg, in my remaining minute, minute-and-a-half 
here--actually, before we do that--
    The OIG--Mr. Thorum, it seems this might be falling into 
your category. You did a audit in 2012 of reauthorization, 
looking back at 2010 through 2012 prior to the requirement of 
the 2012 authorization. And according to your report, on page 
seven, ``We found that the loan files did not include 
sufficient documentation to substantiate the applicant's 
assertions for their need for Ex-Im Bank financing. At the 
time, Ex-Im Bank loan officers stated that the need for Ex-Im 
Bank financing was done through verbal and email 
communications, and detailed documentation was not required.''
    I believe Mr. McCarthy had laid out that there had been 
some improvements. However, you also say at the top of that 
paragraph--this is the first full paragraph on page seven--the 
OIG has not audited Ex-Im Bank's categorization in reporting of 
the purpose of loans and long-term loan guarantees required by 
the authorization. Why in the world not?
    Mr. McCarthy. So we had the--
    Chairman Huizenga. My question is actually directed to Mr. 
Thorum, unless it is somehow more appropriate--
    Mr. McCarthy. It is actually--it is not his report. It is 
one of our audit reports. And he is responsible for inspection 
reports.
    So we did the direct loan audit. And that was based--it was 
after the 2012 reauthorization, but it was looking back at the 
2010 to 2012 timeframe. So what we had in that report is we 
have had recommendations in order to put more--
    Chairman Huizenga. So why have you not followed through on 
that, as you were directed to in 2012?
    Mr. McCarthy. In the 2012 reauthorization, we are 
continuing to review all of these internal control issues. We 
haven't looked at that--
    Chairman Huizenga. That was nearly--it was 2\1/2\ years 
ago. It would seem to me that if red flags went up from 
auditing what had happened in 2010 through 2012, and you are 
directed to do audits of the categorization, which it appears 
are well off the mark, why are you not having that done now?
    Mr. McCarthy. I don't read that provision as a requirement. 
I know OIG audited that particular area. I believe it is a 
requirement for the Bank reporting. And we are reviewing the 
Bank reporting in that area and adding it to our risk-based 
audit planing.
    Chairman Huizenga. Mr. Chairman, my time has expired.
    Chairman Jordan. I thank the gentleman.
    The gentleman from Pennsylvania is recognized.
    Mr. Cartwright. Thank you, Mr. Chairman.
    Chairman Hochberg, again, thank you for being here today. I 
would like to ask you a few questions about the Ex-Im Bank and 
how it benefits Americans. The Export-Import Bank finances 
exports of U.S. products. Am I correct in that?
    Mr. Hochberg. Yes, sir.
    Mr. Cartwright. And Ex-Im Bank financing helps U.S. 
companies compete in the global marketplace, does it not?
    Mr. Hochberg. Correct. Exactly.
    Mr. Cartwright. Bank financing supports billions of dollars 
in exports by U.S. businesses and hundreds of thousands of 
American jobs. Am I correct in that?
    Mr. Hochberg. Correct; 164,000 last year.
    Mr. Cartwright. This is a Bank that operates at no cost to 
the U.S. taxpayer. And in Fiscal Year 2014, it actually 
generated a surplus to the tune of $674.7 million for U.S. 
taxpayers. Am I correct on that?
    Mr. Hochberg. That is correct, as well.
    Mr. Cartwright. Now, the Bank's default rate, I think you 
said in your testimony, was 0.174 percent. Did you say that?
    Mr. Hochberg. That is correct.
    Mr. Cartwright. You probably heard my opening statement. 
And I said the Bank's default rate was 0.175 percent. So I find 
that I have actually defamed you to the tune of one one-
thousandth of a percent. And to that very extent, I apologize, 
Mr. Hochberg. Is it 0.174 percent?
    Mr. Hochberg. That was the default rate as of December 
2014. And we report that to Congress every 90 days.
    Mr. Cartwright. My own view is this: It is hard to 
understand how reauthorizing this hugely successful part of our 
American Government, something that benefits Americans to the 
extent you have described and the U.S. economy the way it does, 
could possibly be a controversial issue. But here we are. Some 
people choose to ignore these facts and risk creating a 
disadvantage for U.S. businesses, U.S. manufacturing companies, 
and U.S. services seeking to compete in the global marketplace.
    But the efforts of the Bank to reform and to comply with 
the GAO--by the way, the GAO is highly respected here in the 
Oversight and Government Reform Committee.
    Chairman Hochberg, the Ex-Im Bank has implemented how many 
of the requirements in the 2012 reauthorization? I think there 
were 18 requirements. How many were done?
    Mr. Hochberg. I enumerated each and every one of them. We 
have complied with every one of the requirements of the 2012 
reauthorization.
    Mr. Cartwright. And the GAO has issued 5 reports since 2012 
with 16 recommendations, 15 of which have been addressed, and 
the Bank is working to address that one remaining 
recommendation. Am I correct on that?
    Mr. Hochberg. That is correct.
    Mr. Cartwright. The Ex-Im Bank inspector general has made 
142 recommendations. And of 142, how many has the Ex-Im Bank 
concurred with?
    Mr. Hochberg. We have concurred with 140 of the 142. The 
last two are in discussion, ongoing conversations.
    Mr. Cartwright. And I think Mr. McCarthy mentioned that, as 
well, in his testimony.
    Let me ask you this: Has the Bank been cooperative in 
working with GAO and also the IG on addressing concerns in 
unresolved recommendations? And can you explain what they are?
    Mr. Hochberg. We have been working closely with the IG--the 
inspector general. As I mentioned, I meet with the inspector 
general once a month at a formal meeting. And our chief risk 
officer meets with him more frequently.
    We have concurred with 140 recommendations. There are two 
outstanding ones we are still in discussion on to find the 
right common ground so it is workable and also meets the needs 
of exporters and creating jobs.
    And with the Government Accountability Office, we concurred 
with all, and the last one we are still in discussion on. And 
that one was only issued last August. So it is a rather recent 
report from GAO.
    Mr. Cartwright. Thank you, Chairman Hochberg. It is not 
clear what concerns exist with this Bank's efforts to reform. 
But I do hope Members today have learned of this Bank's high 
performance in implementing reforms and have some assurance 
that the Bank will continue to address oversight concerns that 
strengthen the Bank's procedures and minimize the risk of fraud 
or taxpayer losses.
    And with that, Mr. Chairman, I yield back.
    Chairman Jordan. I thank the gentleman.
    I recognize the gentleman from Oklahoma.
    Mr. Lucas. Thank you, Mr. Chairman.
    Chairman Hochberg, Under Secretary Sheets, let's talk for a 
moment again about this set of requirements in the 2012 
reauthorization bill. And specifically, let's focus on the ones 
that have not been implemented yet. Could you expand on what 
you have not done yet to fully implement the 2012 
reauthorization bill?
    Mr. Hochberg. Are you addressing me?
    Mr. Lucas. Both of you, actually, since the requirements 
are placed on both the Bank and on Treasury.
    Mr. Hochberg. We have--I tried to outline each of the 
requirements that were set forth in 2012. And I gave a date on 
each one that we have either complied, sent a report, or 
changed our policies and procedures. And I have copies of these 
reports here: default reports; competitor's reports; reports on 
content; economic impact; Federal Register; and so forth.
    Mr. Lucas. So from your perspective, when will all of the 
requirements be implemented, since you say you are working 
diligently to implement them all?
    Mr. Hochberg. We have implemented the requirements of 
Congress. The work with the Government Accountability Office 
and the inspector general will always be ongoing.
    As I mentioned, one of the most--we got one report from GAO 
as recently as August. The IG, we have a large IG staff, so we 
are constantly getting recommendations, frankly, to make us a 
better bank. To make us operate better.
    Mr. Lucas. So chairman, you have implemented your 
requirements.
    Secretary, what about the requirements for Treasury in the 
2012 reauthorization?
    Mr. Sheets. As I articulated in my statement, we are 
working across a number of dimensions to implement the mandate, 
which we take extremely seriously. We are, as I described, 
working with the International Working Group to bring in the 
emerging market economies. We are working with Ex-Im to 
vigorously implement the ASU, which is reduce the quantity of 
export credits significantly. So we feel that we are on a 
convergent path consistent with the mandate.
    Mr. Lucas. So, Secretary, part of that is, I think, what 
most of the Members would refer to as a Section 11 requirement. 
How much enthusiasm do you truly have from your colleagues 
around the world about doing something in reference to their, 
what, 24 or so of these institutions?
    Mr. Sheets. At this stage, the negotiations in the 
International Working Group--which I really see as being a key 
part of what we are doing here, trying to bring in the emerging 
market economies, which are increasingly important providers of 
export credits--are tough, ongoing negotiations. For many of 
these countries, they have not been in negotiations regarding 
export credits before. And as a result of this, these 
negotiations are slow. But we are making progress.
    Mr. Lucas. So our competitors around the world at this 
point are willing to talk about it, but nobody is taking any 
concrete action in stepping away from these programs?
    Mr. Sheets. To be clear, the advanced economies that are 
members of the OECD are bound by the OECD understanding and are 
operating with similar rules.
    But the objective of the IWG is for the emerging markets, 
to bring them in. And we are negotiating with them through the 
IWG. But this is also a subject of a vigorous bilateral 
negotiation. As I mentioned in the S&ED, when President Obama 
was recently in China. So we are making progress.
    Mr. Lucas. But Mr. Secretary, aren't some of the largest 
economic players in this non-OECD members? Say the Chinese, 
perhaps?
    Mr. Sheets. Exactly--
    Mr. Lucas. --with the sheer amount of resources they can 
throw in the fight the way they play the competitive game?
    Mr. Sheets. Yes. Yes, sir. That is why we are engaged in 
this new process, the IWG, which is intended to expand the 
periphery of countries that are bound by these export credit 
understandings.
    Mr. Lucas. Thank you, Mr. Secretary.
    I would just note to my colleagues in what little remaining 
time I have, that perhaps I have a perspective slightly 
different than a number of my friends on both sides of the 
room.
    But if the biggest economic players refuse to step back 
from this kind of a system, I have a real hesitation about 
giving the field away. I have a real hesitation about that. And 
I would say that at some point this year, this issue will be 
addressed legislatively. I would encourage my colleagues: 
Reform is the key. We have to make reforms.
    But this is an institution we will be voting on before this 
year is out. Let's take advantage of this opportunity. A 
discussion about ending something that none of our competitors 
are willing to do doesn't seem like the rational economic 
choice.
    I yield back the balance of my time, Mr. Chairman.
    Chairman Jordan. I thank the gentleman.
    The gentlelady from Wisconsin is recognized.
    Ms. Moore. Thank you so much, Mr. Chairman.
    And I, once again, want to thank all of the witnesses for 
appearing. It seems to me, based on all the testimony I have 
heard, that the Ex-Im Bank has really worked very diligently 
and effectively at adhering to the 2012 mandates.
    I do have a question, though, for you, Mr. McCarthy. I 
would hope that you would return to Wisconsin at some point to 
engage in your birthplace's stuff. That is not why we are here 
today. But I would hope that you would do that.
    I have been very impressed. I was impressed with your 
testimony with regard to the extent that the IG has looked into 
the operations of the Ex-Im Bank, even to the point that they 
have--that there has now been an indictment of an Ex-Im 
employee. I sure wish that you guys had gotten to the HSBC of 
their money laundering, drug dealers, the London will, and 
stopped the 2008 prices. But at least we got this one Ex-Im 
employee.
    We have heard a lot of testimony that the Ex-Im Bank has 
shown favoritism for projects based on political connections 
and electoral politics. So I was wondering if you discovered 
any of that in your investigations. Crony capitalism?
    Mr. McCarthy. Generally, our investigations have been of 
outside parties perpetrating fraud and money laundering schemes 
against the Bank. We haven't reviewed specific allegations that 
we have received in specific cases where there was some type of 
undue political influence or things of that nature.
    Ms. Moore. You have not found that?
    Mr. McCarthy. We have not found that. Now, we do emphasize 
that the Bank needs to make sure that it has in place the 
appropriate internal controls to make sure that things like 
that can't happen. If you have the proper policies in place, if 
you have separations of duties among employees, if you have 
procedures in place, it lessens the risk for that type of undue 
influence, and also fraud cases.
    Ms. Moore. All right sir, thank you so much.
    Mr. Sheets from Treasury, again, I want to thank you for 
your due diligence. You are currently negotiating with other 
countries to limit or end export credit. Were we not to 
reauthorize the Bank on the 30th of June, as some Members of 
our body would like, do you think that countries like Korea or 
China will voluntarily end their credit support programs? The 
other, what is it, 59 countries? If we were just to disappear 
from this space?
    Mr. Sheets. I think that would be very unlikely. And 
indeed, if we were to unilaterally curtail, I think that there 
is a risk, as I have indicated, that in negotiations going 
forward we will have less leverage because we won't have 
anything to give in those negotiations.
    So I think it is important from a level playing field 
standpoint that we remain engaged on this. But also, if our 
ultimate goal is to further discipline export credits, a 
unilateral curtailment would very likely move in the opposite--
    Ms. Moore. Would it be catastrophic? Those are my words.
    Mr. Sheets. --from a global standpoint.
    Ms. Moore. Would it be catastrophic to our economy?
    Mr. Sheets. I think it would be very negative and adverse. 
How we define catastrophic--
    Ms. Moore. All right. That is my definition. I am from 
Milwaukee. And we are the manufacturers of the world. We have 
Boeing, and all of these companies with which people have 
issues. Boeing doesn't make any screws and bolts and nuts and--
they come from Milwaukee, small businesses.
    We have heard that 99 percent of the small businesses don't 
use Ex-Im Bank. But isn't it true that 89 percent of the loans 
you guys make are to small businesses, Mr. Hochberg?
    Mr. Hochberg. Yes, they are.
    Ms. Moore. Okay. What do you mean, Mr. Hochberg, when you 
say that the operations at the Bank are ``demand-driven?'' And 
how do you supplement private finance? Can you walk us through 
that?
    Mr. Hochberg. Certainly. Demand-driven is that companies 
come to us. For example, you and I visited Maxim Industries in 
Wisconsin, a company that makes construction equipment. They 
come to us when they are trying to sell overseas and can't get 
financing locally or their competitors overseas have 
government-backed loans, so they want to make sure they are on 
a level playing field.
    So when I say ``demand,'' they come to us, they seek us out 
only when they need us. And we can fill in the gap that the 
private--
    Ms. Moore. Maxim has 30 employees. And they have worked on 
projects like the Panama Canal, with 30 employees in Milwaukee.
    Thank you. And I yield back.
    Chairman Jordan. Before recognizing the gentleman from 
South Carolina, I just want clarification on an answer. The 
gentlelady talked about undue political influence.
    Mr. McCarthy, did you say you have not found that, or you 
have not looked into that?
    Mr. McCarthy. I am saying that we haven't received specific 
allegations that we have substantiated on that. We are always 
happy to look--
    Chairman Jordan. So you have not looked into it? You don't 
know?
    Mr. McCarthy. From time to time, we have looked into 
various allegations.
    Chairman Jordan. Which is it? You have looked into it, or 
you haven't looked it into?
    Mr. McCarthy. We have looked into it from time to time, but 
we have not substantiated it.
    Chairman Jordan. Okay. Thank you.
    The gentleman from South Carolina is recognized.
    Mr. Mulvaney. Mr. Hochberg, for the benefit of my 
colleagues who have not had the pleasure before of sitting in 
on our discussions, I thought I would review and summarize some 
of the previous testimony you and I have gone over when you 
have been here, as quickly as I can.
    Mr. Cartwright mentioned the low default rate at the 
Export-Import Bank. The Bank still has $36 million worth of 
pre-Castro Cuban debt on the books, don't you, as a performing 
loan? The answer to that is yes, you still have it. And my 
guess is we probably didn't address it when we changed--
normalized relations. But it is still on the books as a good 
loan.
    You talk about the 164,000 jobs that the Bank supposedly 
supports. It is always an interesting use of language. It 
doesn't create; it supports. You still don't have any clue as 
to how many of those are actually in the United States, do you?
    Mr. Hochberg. All of those jobs are in the United States, 
sir.
    Mr. Mulvaney. The GAO has said on several occasions that 
the method by which you count jobs does not adequately account 
for the jobs of the foreign components of American exports.
    Mr. Hochberg. We actually only look at the U.S. content. 
And as a result of that, adjust our jobs numbers, which we 
receive--we use data from the Bureau of Labor--
    Mr. Mulvaney. You have no idea how many of those jobs would 
cease to exist if the Bank is not reauthorized, do you?
    Mr. Hochberg. No. I would differ with you on that. 
Companies come to us, like Maxim Industries I just mentioned, 
when they can't--
    Mr. Mulvaney. How many would cease to exist?
    Mr. Hochberg. Every application makes a statement in the 
application--
    Mr. Mulvaney. How many of the 164,000 jobs that you say you 
support would cease to exist if the Bank is not reauthorized? 
You don't know the answer--
    Mr. Hochberg. I would say all of them. Because the 
application requires you to state that you have come to us as 
the lender of last resort.
    Mr. Mulvaney. I will accept ``all of them'' as an answer. 
But I will disagree with it.
    You don't know how many jobs you destroyed, do you? You 
were here previously and heard testimony from Delta Airlines 
that you destroyed 7,500 jobs at Delta. You don't count that in 
your 164,000, do you?
    Mr. Hochberg. We actually look at--we do an economic impact 
study, sir, that is required by law.
    Mr. Mulvaney. You have done one of those on an airplane 
sale in the last 20 years. How can you say you--
    Mr. Hochberg. We review every single transaction for 
economic impact. And when warranted, we do an in-depth study.
    Mr. Mulvaney. Once in the last 20 years.
    The GAO report said that one of the shortcomings they found 
at the Bank a few years ago was that when a third-party lender 
gets involved on an Export-Import Bank-guaranteed loan, they 
don't do adequate credit checks. They stop doing the credit 
checks. If Boeing is going to sell an airline to Ethiopia, the 
Bank doesn't look at the credit of Ethiopia, because they 
simply rely on the government guarantee. You were supposed to 
fix that a couple of years ago. That is one of the things you 
haven't fixed yet, have you?
    Mr. Hochberg. We do a full underwriting--using the example 
of Ethiopian Airways--which, by the way, supports thousands and 
thousands of U.S. jobs, including many small businesses in the 
Boeing supply chain. But when we--
    Mr. Mulvaney. A checklist--
    Mr. Hochberg. --we do a full and complete financial review 
and underwriting of every--we do not rely on any outside 
source. We do it ourselves.
    Mr. Mulvaney. The checklist that the IG or the GAO has 
required or requested you to do is one of the things that 
remains unfinished at the Bank, isn't?
    Mr. Hochberg. I mentioned to you we--
    Mr. Mulvaney. The answer to that question is also ``yes.''
    The IG report in June of last year said that you can't 
account--this is a new one for me--for $500 million worth of 
costs on a PNG liquified natural gas project?
    Mr. Hochberg. If you would like me to answer the question, 
I would be happy to answer the question--
    Chairman Jordan. Can you account for the--
    Mr. Hochberg. What we do--as an example, we make an export, 
we finance an export. Some of those exports require local cost. 
In this case, Exxon Mobile was the exporter. The project 
certified that there was $500 million local cost, which was 
authorized and approved. And so there is full certification 
from the project sponsor that the money was indeed incurred and 
spent for this project.
    Mr. Mulvaney. So the IG is just wrong on that one?
    Mr. Hochberg. The IG doesn't like some of the documentation 
we have--
    Mr. Mulvaney. And speaking of documentation--this is the 
last one on my list, Mr. Hochberg, and then I am finished with 
you. And I know you are excited about that.
    Mr. Hochberg. I always like talking to you.
    Mr. Mulvaney. I know. And we always enjoy this, but one of 
the places you fall short on documentation--I found this one to 
be interesting. One of the places they cited you was that you 
don't do a very good job of documenting why companies ask for 
Export-Import Bank participation. Why is that?
    Mr. Hochberg. Companies come to us--like I gave an example 
of Maxim Industries, or I gave a number of examples here--
    Mr. Mulvaney. But the IG says you don't document that. Why 
don't you document that?
    Mr. Hochberg. No. Companies have to certify on their 
application that they need us and why do they need us. Because 
they can't get that loan.
    Mr. Mulvaney. So Mr. McCarthy, why did you cite them for 
that particular shortcoming?
    Mr. McCarthy. In the previous direct loan program audit 
that we did in 2012, we did find that there was not 
documentation in the files supporting the reason for the 
company needing Ex-Im financing. And so we made 
recommendations, and the Bank has modified its procedures.
    Mr. Mulvaney. Mr. Sheets, you are the lucky one here. 
Because I was hoping to handle Mr. Hochberg in 2 minutes and 
give my other 3 minutes to you, sir, and go over some of the 
discussions with our competitors overseas on wide-body aircraft 
financing. But I am out of time.
    So I thank the chairman. And I yield back.
    Chairman Jordan. I thank the gentleman.
    The gentlelady from New Jersey is recognized.
    Mrs. Watson Coleman. Thank you very much, Mr. Chairman.
    I would like to read something to you, Mr. Hochberg. And I 
would like you to tell me whether or not this is a true 
statement.
    ``Although the reliance on Ex-Im Bank has diminished 
slightly over the last year amid a growing economy and 
improvements in the availability of private sector financing, 
the Bank still plays a vital role for thousands of U.S. 
businesses and their workers. In Fiscal Year 2014 alone, the 
Bank authorized $20.5 million of financing in support of $27.5 
billion worth of U.S. exporters and more than 164,000 U.S. 
jobs. Of the Bank's 3,700 authorizations in 2014, more than 
3,300--nearly 90 percent--directly served small U.S. 
businesses.
    ``Furthermore, roughly one in five authorizations completed 
last year directly served women- or minority-owned businesses. 
As noted above, the Bank operates on a self-sustaining basis to 
cover the cost of its operations. Ex-Im Bank charges users a 
fee which, over the past few decades, has generated a surplus--
a surplus--resulting in payments of $6.9 billion to the U.S. 
Treasury. Last year alone, the Bank generated a surplus of 
$674.7 million for U.S. taxpayers. This directly results in 
U.S. deficit reduction.''
    In other words, the failure to reauthorize the Bank would 
actually cost the government money. Yes or no?
    Mr. Hochberg. That would be yes.
    Mrs. Watson Coleman. To the Treasury Department, to the IG, 
and to the GAO. While I recognize that there were many findings 
that the Bank had deficiencies in operations and accountability 
and those kinds of things, it seemed to me from your testimony 
that you have been working with the Bank in a very cooperative 
manner and that it is, in fact, addressing, redressing, and 
moving forward with those recommendations primarily that have 
been found and made. Yes or no?
    Mr. McCarthy. In terms of the IG recommendations, we have 
broken out the more recent recommendations, versus the ones 
that have been outstanding for 6 months or longer, so prior to 
October 2014. And the number on the older recommendations that 
we have--and there is maybe a discrepancy of one or two between 
what Mr. Hochberg is reporting on just on--because it changes 
by the day.
    At that point, we were reporting that there were still 29 
open and 2 unresolved recommendations, as opposed to 78 that 
have been closed out of the older ones.
    Mrs. Watson Coleman. Okay.
    Mr. McCarthy. The newer ones, there are more that are still 
open, because some of those reports have just been issued 
within the last several weeks.
    Mrs. Watson Coleman. Okay. Thank you.
    Ms. Gianopoulos. And with regard to the GAO 
recommendations--
    Mrs. Watson Coleman. Right.
    Ms. Gianopoulos. --13 of those 16 recommendations have been 
closed as implemented officially. For two of the 
recommendations, we have gotten responses from the Bank. And we 
are on the road to closing those imminently. And then the final 
recommendation is from our report of last August, and we are 
working with the Bank on addressing that.
    Mrs. Watson Coleman. I have sat in on a lot of hearings 
where we have had the inspector general and the GAO speak to 
issues regarding departments. And this actually is the first 
time where I have seen so much, what seems to be supportive 
language, that the entity that is under discussion is moving in 
the right direction.
    This is to Mr. Sheets from the Department of the Treasury. 
If the Bank isn't authorized, how will it disadvantage U.S. 
businesses' ability to compete in the global market? And what 
are some of the potential consequences of a unilateral action 
to end U.S. export financing?
    Mr. Sheets. My strong sense is that unilateral curtailment 
of export credits would play very adversely for the U.S. 
economy, for U.S. jobs, for U.S. workers. Because essentially 
what we would be doing is competing in a world where other 
countries are providing these credits. And even if our goods 
and services were of comparable quality or even better, it may 
be economically advantageous for buyers in our export markets 
to buy foreign products. So I think it would be very adverse 
for the U.S. economy and--
    Mrs. Watson Coleman. Thank you. I would just like to note 
that from my very small but important district of the 12th 
District in New Jersey, there is a total export value of $765 
million. That sounds like a lot of money to me and--in my 
district. And I think that we can look at things--you know that 
old adage, half full or half empty? I believe that if we look 
at this in a very realistic way, we will see that there is a 
half-full opportunity here to support the economic growth in 
the State of New Jersey and jobs, and that we all should be 
held to the same standards, whether we are asking questions or 
answering questions or making statements: that we tell the 
truth, the whole truth, and nothing but the truth.
    Thank you very much. Thank you, Mr. Chairman.
    Chairman Jordan. I thank the gentlelady.
    Mr. McCarthy, who is Johnny Gutierrez?
    Mr. McCarthy. Johnny Gutierrez is a former Ex-Im Bank loan 
officer.
    Chairman Jordan. And Mr. Gutierrez was under investigation 
by the inspector general's Office and the Department of 
Justice?
    Mr. McCarthy. I can report what has been filed in the 
public court documents, which you referenced. On Monday, the 
Justice Department filed a one-count information alleging that 
Mr. Gutierrez accepted bribes--
    Chairman Jordan. And the Justice Department indicted Mr. 
Gutierrez this week?
    Mr. McCarthy. They filed an information, which is the 
equivalent of an indictment.
    Chairman Jordan. According to the court filing, Mr. 
Gutierrez on ``19 separate occasions personally and corruptly 
sought and accepted things of personal value, i.e. money, from 
another person, and entity, in return for being influenced in 
the performance of his official acts.'' And this occurred 
between 2006 and 2013. Is that accurate?
    Mr. McCarthy. That is what the information alleges.
    Chairman Jordan. So this started in 2006. And he was 
indicted when?
    Mr. McCarthy. On Monday.
    Chairman Jordan. On Monday, in 2015?
    Mr. McCarthy. That is correct.
    Chairman Jordan. And is there any coincidence to the fact 
that he was indicted 2 days before this hearing, or did that 
just happen?
    Mr. McCarthy. Mr. Chairman, that did just happen. That is a 
coincidence. This was in process prior to the hearing--
    Chairman Jordan. Starts stealing and taking bribes in 2006. 
Gets indicted 2 days before a big hearing?
    Mr. McCarthy. The process was in place--
    Chairman Jordan. Nine years later?
    Mr. McCarthy. --announced--being announced. DOJ makes these 
decisions. They will tell you that they are charging--
    Chairman Jordan. Okay. That is fine.
    Mr. Hochberg, back in 2006, when Mr. Gutierrez was first 
starting to take bribes as an employee at your Bank, President 
Obama, who was then Senator Obama, said the Export-Import Bank 
is little more than a fund for corporate welfare. Was he wrong?
    Mr. Hochberg. Yes. That was--people say things in 
campaigns, and they say different things when they are in 
office. So I am not going to comment what was motivating then-
Senator Barack Obama--
    Chairman Jordan. That is the understatement of the year 
there for this Administration. Thank you.
    Mr. Hochberg, who is Diane Farrell?
    Mr. Hochberg. Diane Farrell was a former director of the 
Bank who was nominated by the President and confirmed by the 
U.S. Senate.
    Chairman Jordan. Director of the Bank means she was on your 
board?
    Mr. Hochberg. Correct. She was--we have a--
    Chairman Jordan. How long was she on your board?
    Mr. Hochberg. Her time precedes mine. So I can't tell you 
precisely--
    Chairman Jordan. How long have you been there?
    Mr. Hochberg. I have been there--this May will be 6 years.
    Chairman Jordan. My understanding is that she was on the 
board for 8 years between 2007 and 2015. That doesn't seem like 
it precedes you.
    Mr. Hochberg. No. She was not--no. Her term was up, I 
believe, in 2011.
    Chairman Jordan. When you have been there 6 years? If I do 
the math, that means you--there was some overlap?
    Mr. Hochberg. Of course, yes. I thought you were asking--
I'm sorry. I misunderstood the question.
    Chairman Jordan. No. You said she was there before you 
were.
    Mr. Hochberg. She was there before I was.
    Chairman Jordan. Yes.
    Mr. Hochberg. I arrived in 2009, she arrived sometime--
    Chairman Jordan. You served together, is what I am getting 
at.
    Mr. Hochberg. Oh, yes. Of course.
    Chairman Jordan. Your answer seemed to say that you didn't.
    Mr. Hochberg. Oh, no. I'm sorry. I misunderstood you.
    Chairman Jordan. Where is she currently employed?
    Mr. Hochberg. She is--my recollection is that she is at the 
U.S. Indian American Chamber.
    Chairman Jordan. Do you know if she is on the board of 
Azure Power?
    Mr. Hochberg. I have no recollection.
    Chairman Jordan. My understanding is that she is. And do 
you know, does Azure Power benefit from any financing from the 
Export-Import Bank?
    Mr. Hochberg. Azure Power is a solar development company in 
India that has been a purchaser of U.S. goods. And we have 
financed some of their projects.
    Chairman Jordan. You have financed some of their projects? 
So a lady who was on your board is now working for a company 
for which you financed projects?
    Mr. Hochberg. It was long after she left the Export-Import 
Bank.
    Chairman Jordan. She just recently left the Export-Import 
Bank, correct?
    Mr. Hochberg. She left the Export-Import Bank, as I 
mentioned, sometime in 2011.
    Chairman Jordan. Okay. And so did Ms. Farrell work on any 
loans that are now benefiting the employer she is with, and 
that association?
    Mr. Hochberg. I--I have--I would not be able to--
    Chairman Jordan. Could you get us that answer? That is 
important.
    Mr. Hochberg. I would--we can get you that answer. I don't 
know off the top of my head what transactions she voted on 
during her time as a board member.
    Chairman Jordan. Okay. And do you know where Ms. Farrell's 
husband is employed? Do you happen to know?
    Mr. Hochberg. No, I don't know.
    Chairman Jordan. He is employed at Boeing. Does that cause 
any concern?
    Mr. Hochberg. Actually, now that you--when Ms. Farrell was 
on the board and her husband was at Boeing, she was recused 
from all transactions--
    Chairman Jordan. That is nice. And we would expect that. I 
am just making the point that she was working for the Export-
Import Bank giving loans and financing to the company she now 
works for. And also, while she was on the board at the Export-
Import Bank, her husband worked for Boeing, which gets 40 
percent of the financing from the Export-Import Bank. Now, how 
do you think the normal taxpayer looks at that arrangement?
    Mr. Hochberg. I will have to leave that to you, sir. But--
    Chairman Jordan. I can tell you, they talk to me about 
things. But this is the part of government that just drives 
them crazy. This kind of coziness, this kind of closeness, this 
kind of connectedness drives them crazy.
    You have--she is on the board. Her husband is working at 
Boeing. And you say oh, she recuses herself from those 
decisions. But 40 percent of all the financing goes to one 
company that her husband works for. And oh, by the way, she 
goes to work for a company that got $15 million of export-
import financing after the board approved the $15 million in 
financing to Azure Power. You don't find that a little strange?
    Mr. Hochberg. First of all, Congressman, none of the 
financing we do goes to Boeing. It goes to overseas customers 
who buy U.S. products. We don't lend money to the Boeing 
corporation.
    Chairman Jordan. Okay. All right. So I was mistaken. All 
those people who come talk to me from Boeing, lobbyists who 
represent Boeing, they don't really care that much about the 
Export-Import Bank, then? You say it is not important?
    Mr. Hochberg. We are talking about customers, overseas 
customers who have a choice, Congressman, between buying a 
Boeing airplane and an Airbus airplane. If we are looking--
    Chairman Jordan. So all the lobbying Boeing is doing is 
just out of the goodness of their heart to help those overseas 
customers, right?
    Mr. Hochberg. We are talking about jobs in America, jobs in 
Toulouse, France, or Hamburg, Germany.
    Chairman Jordan. All right. My time has expired.
    I now recognize the gentlelady from California.
    Ms. Waters. Thank you very much. I really don't have a lot 
of questions. I have worked very closely with the U.S. Chamber 
of Commerce, the Business Round Table, the National Foreign 
Trade Council, the National Association of Manufacturers. I 
have met with some of the businesses that are beneficiaries of 
the Ex-Im Bank. I have met with Mr. Hochberg. I have met with 
my local chambers. I have tremendous support from the 
California Chamber of Commerce.
    And I know the Export-Import Bank pretty well. I have spent 
a lot of time learning about what they do and how they do it. 
And I am convinced of the high performance, the excellent 
default rate, the support for both large and small businesses 
and their suppliers. And I have a real appreciation for the job 
creation that they are doing. So I don't have any questions.
    There have been representations over and over again from 
both sides of the aisle from various times about this Bank and 
the importance of this Bank. But I think I should use this time 
to get a little mean and to talk about the way that this Bank 
has been unfairly attacked.
    First of all, yes, this article, ``Justice Department 
Charges Former Export-Import Bank Official with Bribery.'' We 
don't support the people committing crimes or doing bad things. 
But do we want to shut down the Export-Import Bank because we 
have a person or a few persons who have acted improperly? I 
don't think so.
    Because if we did that, I would have to say this: 
Republicans have said that individual acts of fraud or 
corruption at Ex-Im Bank proves that there is systemic fraud 
and corruption throughout the Bank and for this reason, among 
others, the Bank should be closed.
    Let me give you some examples of fraud, corruption, and 
abuse of the public trust at an institution very close and dear 
to most people here today. I am talking about the Congress of 
the United States of America. From 1981-1989, under the Reagan 
Administration, 10 Members were convicted of bribery and 
conspiracy, and one Member was convicted of perjury.
    From 1989-1993, under Bush, one Member was convicted of 
accepting illegal gifts, and one Member was convicted of 
bribery. Under Clinton, one Member was convicted of bribery, 
one Member was convicted of tax evasion and extortion, and two 
Members were convicted of embezzlement. Under George Bush W. 
Bush--2001-2009, two Members were convicted of bribery, one 
Member was convicted of money laundering, and one Member was 
convicted of financial corruption. Under the Obama 
Administration, two Members were convicted of wire fraud, 
extorting or money laundering, and one Member was convicted of 
tax evasion.
    Does anyone believe that these individual instances of 
corruption by bad actors point to systemic corruption 
throughout the Congress? And I also wonder if any Republican 
Members support shutting the House down. I don't think so.
    Let us take a look at what has not been done. We bailed out 
the biggest banks in this country. I have 15 pages of fines 
that have been leveled on the banks, many of whom we bailed 
out, from everything from market manipulation to money 
laundering to lending consumer practices, mortgage-backed 
securities fraud, on and on and on and on. We have not had one 
hearing. Not one hearing on any of this.
    But yet, we come here today and we have Mr. Mulvaney 
talking about how you didn't properly do credit checks. Mr. 
Mulvaney, have you ever heard of no-documentation loans, no 
credit checks that were done by the biggest banks in America 
who brought us down in a subprime--
    Mr. Mulvaney. Would the gentlelady yield?
    Ms. Waters. No, I won't yield.
    Mr. Mulvaney. Well, you mentioned my name, so I thought I 
would ask--
    Ms. Waters. And so let me just say that this business of 
talking about this very important institution to be closed down 
for all of these phony reasons really is something that I 
cannot take seriously and the American public cannot take 
seriously.
    And I think it was you who also said something about how 
our citizens, perhaps, should be very, very disappointed with 
us. Oh, no. Here is what you said: How does the average 
taxpayer look at us? You are right. How do they look at us? How 
do they look at us, who would attack a bank that not only is 
helping us to deal with building up and expanding our ability 
to support exports and businesses and create jobs, and then 
have Members sit here who have not said one word about what has 
happened in America with banks which are accused of and have 
been fined for all of these crimes?
    And you ask, how should our citizens think about us? I 
would think they think we have no credibility and this must be 
political. This must be about someone who is attempting to 
create something that they can accuse Democrats of and make it 
look as if they are taking care of the taxpayers in some 
extraordinary way. And it doesn't wash.
    I yield back the balance of any time.
    Chairman Jordan. I would just remind the gentlelady that 
many of us didn't vote to bail out the Banks. The Constitution 
requires a House of Representatives. It doesn't require an 
Export-Import Bank. And the most well-known case of a 
Congressperson getting in trouble was the cash in the freezer 
of Mr. Jefferson, which was related to the Export-Import Bank.
    Ms. Waters. It doesn't measure up to the acts that have 
been committed--
    Chairman Jordan. With that, I recognize the chairman of the 
full Oversight and Government Reform Committee, Mr. Chaffetz.
    Chairman Chaffetz. I thank the chairman.
    Mr. Hochberg, how many employees are there at the Bank?
    Mr. Hochberg. About 450.
    Chairman Chaffetz. And how many of those would be loan 
officers?
    Mr. Hochberg. I would have to say in the range of maybe 75.
    Chairman Chaffetz. Will you provide this committee a 
listing of--when you say 450, an organizational chart, as well 
as how many you have in each of those slots?
    Mr. Hochberg. I would be happy to do so.
    Chairman Chaffetz. Thank you. I would appreciate it.
    You are aware of the Washington Examiner story that alleges 
that the Bank may have tipped off Boeing about a Freedom of 
Information Act request that was put forward by Delta Airlines. 
Delta Airlines had made a FOIA request, but they did not 
publicize it. And yet, it was revealed that Boeing knew to ask 
for pretty much the exact same information 2 months before that 
information became public. How could that be?
    Mr. Hochberg. I am not sure I can answer that question. I 
don't have an answer to that--
    Chairman Chaffetz. Are you familiar with the article on 
March 19th?
    Mr. Hochberg. I am vaguely aware of the article. Yes, I am.
    Chairman Chaffetz. So there is an article saying who at the 
Export-Import Bank warned Boeing about a Delta FOIA, and you 
are just vaguely familiar with that?
    Mr. Hochberg. What I can say, sir, is that no employee 
reveals the source--
    Chairman Chaffetz. How do you know that?
    Mr. Hochberg. We have an--we run an ethical organization, 
and that is what--
    Chairman Chaffetz. You do have more than 31 open 
investigations into fraud and abuse in your organization. You 
did have somebody who was just indicted yesterday. So what is 
the case to say that you run an ethical organization?
    Mr. Hochberg. The 31, sir, are outside companies that have 
tried to defraud the Export-Import Bank.
    Chairman Chaffetz. Mr. McCarthy, do you have any open 
investigations?
    Mr. McCarthy. We have about 31 open investigations right 
now. Most of them are for external fraud. Some of them are 
proactive intelligence-based investigations, and some of them 
are internal to the Bank.
    Chairman Chaffetz. Some of them are internal. So I would 
take exception to the idea that you run the most ethical 
organization. As Mr. Mulvaney cited, we have had problems with 
this Bank in the past, and we did just have an indictment 
yesterday, in this week.
    How much did you charge Delta Airlines for their FOIA 
request?
    Mr. Hochberg. I don't know the precise fees we charge. But 
I can say this, Congressman--
    Chairman Chaffetz. Have you fulfilled that FOIA request?
    Mr. Hochberg. Yes, we have fulfilled that one. And let me 
just--if I could add--
    Chairman Chaffetz. There was more than one. How much have 
you charged Delta Airlines to gather information that 
rightfully they should be able to see?
    Mr. Hochberg. I will have to get back to you. I don't know 
the--
    Chairman Chaffetz. Would it be $90,000?
    Mr. Hochberg. I don't know the charge. I can get--
    Chairman Chaffetz. Is that a wrong number? Is it more than 
$90,000?
    Mr. Hochberg. I don't know the number, sir. I don't want to 
mislead--
    Chairman Chaffetz. When will you give us the number?
    Mr. Hochberg. I can check and I will get back to you on 
that. I can--
    Chairman Chaffetz. When will you get back to us?
    Mr. Hochberg. I will have to ask my council how readily do 
we have that information.
    I can get that to you tomorrow.
    Chairman Chaffetz. Fair enough. Thank you.
    Mr. Hochberg. And I can add--
    Chairman Chaffetz. Of the FOIA requests that were issued by 
Delta, how much of that have you fulfilled? Have you given them 
100 percent? Because part of the concern is that you have 
charged them and taken their $90,000-plus dollars, but you 
haven't fulfilled the FOIA request.
    Mr. Hochberg. Congressman, I don't want to mislead you, I 
don't want to mislead the committee. I don't have the precise 
facts on that particular FOIA request.
    I can add, however, that when we--the law requires that 
when we have a FOIA request, we need to inform the company 
whose information we are revealing. So that is why Boeing was 
aware of that FOIA request, because it was their information 
that was being submitted to Delta.
    Chairman Chaffetz. You are going to provide this committee 
the details of that specific instance?
    Mr. Hochberg. You asked about this--
    Chairman Chaffetz. There are a couple of different FOI's. 
But I want to see the information about how Boeing knew in 
advance, when it wasn't public, that they knew 2 months in 
advance to submit their own FOI's for the same material?
    Mr. Hochberg. When I tried to explain this--it is my 
understanding of the law--I am not a lawyer--that we must 
inform the company about whose information we are providing in 
a FOIA request.
    Chairman Chaffetz. And part of the question was, did you 
fulfill that FOIA request? Because I want additional details. I 
have 30 seconds.
    Mr. Hochberg. We have fulfilled that FOIA request--
    Chairman Chaffetz. It is my understanding that there was 
more than one FOIA request.
    The Wall Street Journal reported that in the drafting of 
regulations related to this, they would have an ``extraordinary 
level of coordination.'' How do you quantify the level of 
coordination with Boeing in relationship to the drafting of the 
regulations?
    Mr. Hochberg. Congressman, we work with every company who--
when we are doing regulation requirements that concern a 
particular company. So in the case of Boeing, we happen to have 
one aircraft company, so we talk to the one aircraft company. 
When we are doing banking regulations, is how we--
    Chairman Chaffetz. When was the last time you spoke with 
Boeing?
    Mr. Hochberg. The last time I spoke with Boeing?
    Chairman Chaffetz. Yes.
    Mr. Hochberg. They are in the room today.
    Chairman Chaffetz. So did you speak with them today?
    Mr. Hochberg. I said hello--I said good morning.
    Chairman Chaffetz. When was the last time you had a 
substantive conversation with them?
    Mr. Hochberg. I was in Panama with President Obama and we 
signed--U.S. Boeing signed an agreement with Copa Airlines.
    Chairman Chaffetz. And what was the value of that?
    Mr. Hochberg. A list value of about $6.6 billion.
    Chairman Chaffetz. I have gone past my time. Thank you, Mr. 
Chairman. I yield back.
    Chairman Jordan. I thank the gentleman.
    I now recognize Mr. Heck, the gentleman from Washington.
    Mr. Heck. Thank you, Mr. Chairman.
    Mr. Hochberg, could you quickly restate for the record what 
your default rate is?
    Mr. Hochberg. Yes. Our default rate is 0.174 percent. And 
it is something we send to Congress every 90 days make sure 
that Congress is apprised of the state of our portfolio.
    Mr. Heck. To the best of your ability, could you compare 
that default rate to the rest of the commercial lending sector 
that operates in the same space?
    Mr. Hochberg. It is hard to get a precise benchmark. But it 
is, from my understanding, 2 to 3 times lower than general 
commercial loans.
    Mr. Heck. To the best of your recollection, could you state 
for the record what your collection rate is on bad debt?
    Mr. Hochberg. It is partly reflected in our default rate, 
again, of 0.174 percent. And when something has gone in 
arrears, we have generally been collecting about 50 cents on 
the dollar.
    Mr. Heck. And can you compare that to the rest of the 
commercial lending?
    Mr. Hochberg. I don't have a precise benchmark for that. 
But my understanding is it is very much on the high side.
    Mr. Heck. Do you recall off the top of your head the last 
year--are you aware of the last year in which there was an 
actual transfer of taxpayer money to the Export-Import Bank in 
the form of a subsidy?
    Mr. Hochberg. There has been none. We have transferred to 
Treasury $6.9 billion in the last 2 decades. And most recently, 
in October of this past year, $675 million.
    Mr. Heck. I was asking for the reverse transfer. When is 
the last time you received a subsidy? And are you aware that 
there have been any subsidies since the enactment of the 1990 
Credit Reform Act?
    Mr. Hochberg. There have been none.
    Mr. Heck. Mr. Hochberg, you know that I have expended no 
small amount of time on this effort. I am just one of many. As 
has my friend Congressman Fincher from Tennessee and others. We 
have met with you multiple times. We have met with the majority 
whip's office, the chair's office, the chair--the ranking 
member of the subcommittees--and I meant the ranking member, 
not the chair--in an effort to develop legislation.
    Have you or any members of your office met with Chairman 
Huizenga of the subcommittee to develop or respond to or react 
to proposed changes and/or reforms for reauthorization 
purposes?
    Mr. Hochberg. No, I have not.
    Mr. Heck. Mr. Hochberg, a difficult question, a permutation 
on some of the line of questioning of Ranking Member Waters.
    Sir, do you believe that Congressman Aaron Schock's 
resignation in shame from this institution is a reflection on 
the entire House Republican conference?
    Mr. Hochberg. No, I have--no, I would say not.
    Mr. Heck. I don't either.
    Mr. Hochberg, are you aware that China is developing a 
wide-body aircraft for sale into the commercial market in 
competition with both Boeing and Airbus?
    Mr. Hochberg. I have met, actually, with Comac, which is 
the Chinese aircraft manufacturer. They already have 400 orders 
for a narrow body. And there have been reports they are working 
with the Russian aerospace industry to develop a wide-body, 
also to compete with Boeing and Airbus.
    Mr. Heck. There have been reports to that effect. Do you 
believe it to be the case?
    Mr. Hochberg. Oh, I have no reason not to believe it. As I 
said, I personally met with the CEO of the Chinese aircraft 
company. So I would have a firsthand impression of their 
activities.
    Mr. Heck. So lastly, Mr. Hochberg, would you give us a 
little bit of information about how much larger the export 
credit authority is in China? As a matter of fact, I think they 
have multiple entities. But educate us. How many export credit 
authorities do they have? And aggregating them, how do they 
compare in size to the Export-Import Bank?
    Mr. Hochberg. For one, China, as we know, is not the most 
transparent country in terms of its banking and financial 
dealings. They have four entities that provide export support. 
First, SINOSURE, which essentially provides credit insurance. 
That alone has been about $670 billion in the last 2 years.
    They also have the China Ex-Im Bank. Informally, in 
speaking with their chairman, they operate between $90 billion 
and $100 billion a year. There is the China Development Bank, 
and then there is the Chinese Agriculture Bank. So there are 
four entities that do that.
    Mr. Heck. I lied. I have two more quick questions.
    First of all, yes or no if you can, are we already losing 
business as a consequence of the cloud hanging over 
reauthorization of the Export-Import Bank?
    Mr. Hochberg. Without question.
    Mr. Heck. Mr. Chairman, at this time I would like to 
request unanimous consent to place in the record a letter from 
multiple governors from both political parties throughout this 
country, in support of reauthorization of the Export-Import 
Bank.
    Chairman Jordan. Without objection, it is so ordered.
    Mr. Heck. Thank you, sir.
    Chairman Jordan. I thank the gentleman.
    I now recognize the chairman of the full Financial Services 
Committee, the gentleman from Texas, Mr. Hensarling.
    Chairman Hensarling. I thank the gentleman.
    I must start off by saying that I have been somewhat amused 
by my friends on the other side of the aisle who decry the lack 
of hearings on Ex-Im and then simultaneously say they are a 
waste of time.
    But just for the record, Mr. Chairman, is this a hearing?
    Chairman Jordan. It most certainly is.
    Chairman Hensarling. Okay. We are in the midst of a 
hearing.
    Mr. Hochberg, according to Ex-Im records, of the 50 largest 
loans or guarantees provided by Ex-Im--I believe this was on 
your watch--through the end of Fiscal Year 2014, roughly half 
have gone to state-owned companies or joint ventures that 
include state-owned companies, including Saudi Arabia, Russia, 
China, Pakistan, India, Colombia, Mexico, Ethiopia, South 
Africa, and Poland. Do you agree with that analysis?
    Mr. Hochberg. I haven't seen the data you are looking at. 
But those names sound familiar.
    Chairman Hensarling. Okay. Again, these are state-owned 
companies or joint ventures that include state-owned companies.
    There has been discussion of losing jobs to China. On your 
watch in 2011, the Ex-Im Bank records show that a $75.8 million 
loan was approved to a Chinese company, ICBC Financial Leasing. 
Its parent company is the state-owned Industrial Commercial 
Bank of China, the largest bank in the world, with reported 
assets of $3 trillion. Are your records correct? Did that 
transaction take place?
    Mr. Hochberg. Congressman, my recollection is we approved 
that authorization, but there was never a disbursement. They 
changed their mind on that transaction.
    Chairman Hensarling. Okay. Let's talk about Russia. It is 
my understanding--again, from perusing Ex-Im records--that on 
your watch, taxpayer-backed financing to Russia has increased 
roughly tenfold from roughly $60 million to $600 million. Is 
that accurate?
    Mr. Hochberg. I am not looking at the precise data. But we 
no longer do any business in Russia.
    Chairman Hensarling. I know you don't. Because I sent you a 
letter after Russia had invaded the Ukraine. And if memory 
serves me correctly, that was February 27th of 2014. And it 
took you until July 29th, many months later, before you and the 
Ex-Im Bank suspended all deals with Russia.
    Is July 29th, according to press reports, the date that you 
suspended all deals with Russia? And is it not true that Russia 
invaded the Ukraine on February 27th?
    Mr. Hochberg. I would have to get back to you on the 
precise date we stopped. We put a hold on--
    Chairman Hensarling. I will let you know, Mr. Hochberg, 
that there are numerous press reports that show that it took 
you months, months, in order to do that.
    In February of this year, there were press reports that 
indicated that a $2 million direct Export-Import Bank loan to 
Ghana that was designed to bring electricity to 1,200 rural 
communities was instead diverted to buy luxury automobiles, 
including Lexus SUVs, by various foreign government 
bureaucrats. Are you familiar with this press report? And if 
so, is it accurate?
    Mr. Hochberg. I am familiar with a company that has done a 
lot of electrical work in Ghana, Weldy Lamont. In fact, they 
have done such a good job that they have expanded their 
contract there. I am not familiar with--
    Chairman Hensarling. So you are not familiar with this?
    Mr. Hochberg. No, I am not, sir.
    Chairman Hensarling. Okay. In September of 2013, the Ex-Im 
Bank approved a $33.6 million loan for a Spanish green energy 
company, Abengoa International at the time. Former New Mexico 
Governor Bill Richardson sat on the advisory board for both Ex-
Im and this particular company. Are the records correct that 
Ex-Im approved this loan?
    Mr. Hochberg. That is--again, I can confirm that. That 
sounds familiar to me, sir.
    Chairman Hensarling. Okay. Mr. Hochberg, approximately how 
many days a month do you travel away from the Export-Import 
Bank?
    Mr. Hochberg. I am probably on the road, if I had to guess, 
about 7 or 8 days a month.
    Chairman Hensarling. Eight days a month. And do you know 
over the last year how many appearances that you have made in 
congressional districts with Members of Congress?
    Mr. Hochberg. I have traveled around the country meeting 
with small business exporters. I mentioned when I was with Gwen 
Moore and the Maxim company, I was most recently--
    Chairman Hensarling. Are you meeting with them? Or are you 
lobbying for your reauthorization?
    Mr. Hochberg. No. I am meeting with companies and finding 
better ways that we can support them to support more American 
jobs. And meeting--since 90 percent of our customers are small 
businesses--
    Chairman Hensarling. Mr. Hochberg, while you are going 
around meeting with various individuals and posing for photos, 
we get articles like this, ``Justice Department Charges Former 
Export-Import Bank Official with Bribery.'' And as I understand 
it, this individual engaged in these activities on your watch, 
sir. And so perhaps maybe a little bit more time managing the 
store, and a little less time posing for photo ops and lobbying 
for your reauthorization may lead to fewer indictments.
    I thank the chairman. I yield back the balance of the time 
I no longer have.
    Chairman Jordan. Thank you, Chairman Hensarling.
    I now recognize the gentleman from Texas, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I thank the ranking 
member, as well.
    And would like to explain that when I say, ``Export-Import 
Bank,'' I am really talking about 1,630 exporters in the State 
of Texas. I am really talking about Texas being one of the top 
exporters in the country. It is more than a building that is 
located someplace with people in it. We are talking about, in 
my 9th Congressional District, 94 exporters. We are talking 
about 46 small businesses. We are talking about 14 minority-
owned businesses. And we are talking about 5 women-owned 
businesses.
    So it is more than brick and mortar. More than people who 
happened to have engaged in some conduct that I don't approve 
of. Quite frankly, a lot of businesses engage in conduct that I 
don't approve of. Those who police us engage in conduct that I 
don't approve of. But I never advocated eliminating one police 
department.
    Someone mentioned corporate welfare. This is a wonderful 
device, this iPad. It gives you access to the world 
immediately. The Huffington Post has reported in 2014 with 
reference to corporate welfare that direct Federal subsidies to 
corporations--and now they mention the Cato institute. The Cato 
Institute estimates that Federal subsidies to corporations cost 
taxpayers $100 billion every year.
    Let's really look into corporate welfare. Let's do 
something about corporate welfare. If this is the genesis, 
let's go move on to revelations. I have some revelations. 
Federal tax breaks to corporations. The Tax Code gives 
corporations special tax breaks that have reduced what is 
supposed to be a 35 percent tax rate to an actual tax rate of 
13 percent, saving these corporations an additional $200 
billion annually.
    Let's talk about Federal tax breaks to the wealthy. Federal 
tax breaks for wealthy hedge fund managers, special tax breaks 
for hedge fund managers, allow them to pay only 15 percent. A 
15 percent tax rate, while people that they earned the money 
for usually pay a 35 percent tax rate.
    You want to talk about corporate welfare? What about 
subsidies for the fast food industry? Research by the 
University of Illinois and UC Berkeley documents that taxpayers 
pay about $243 billion each year in direct subsidies to the 
fast food industry because they pay wages that are so low that 
taxpayers must put up $243 billion to pay for public benefits 
the workers receive. My God. This is not a crime. But I think 
an argument can be made that it is sinful.
    So now we want to eliminate the Ex-Im Bank because of 
corporate welfare and criminality. My dear friends, if we 
didn't have the Ex-Im Bank, we would be trying to find a way to 
create it, so that we could compete in the global marketplace.
    I agree with Mr. Lucas. And I thank you for your 
commentary, sir. I hope this doesn't hope you back hope, my 
agreeing with you. I want you to know I think that reform may 
be necessary, but that we should not throw out this baby with 
the bath water.
    Mr. Chairman, I thank you for allowing an interloper to 
have a moment. God bless you. And God bless the United States 
of America. I yield back.
    Chairman Huizenga [presiding]. The gentleman yields back.
    With that, the Chair recognizes Mr. Walberg of Michigan for 
5 minutes.
    Mr. Walberg. Thank you, Mr. Chairman.
    Last year, Delta CEO Richard Anderson testified before the 
Financial Services Committee, Mr. Sheets, that your predecessor 
informed him that Treasury was not going to negotiate with 
Europeans over Ex-Im subsidies. Could you elaborate on that for 
us?
    Mr. Sheets. Thank you. As you indicated, the meeting that 
you are referring to occurred before I was at the Treasury.
    What I can say is that we take the mandate that we have 
been given very seriously. And we have, in fact, negotiated 
with our European counterparts on aircraft. And we are pressing 
them and ready to go as quickly as they are prepared to go and 
broadly engaging on export credit financing with an eye toward 
further disciplining it.
    Mr. Walberg. How many meetings with other countries have 
you attended to discuss lowering export credit assistance?
    Mr. Sheets. The meetings of the OECD and IWG negotiations 
are done by members of my team. But what I can tell you is that 
in international discussions with the Indians, with the 
Chinese, with the Brazilians, in a number of meetings, more 
than I can count, we have discussed issues related to export 
credit and efforts to further widen the scope.
    When we engage, particularly with our Chinese counterparts, 
this is one of the very, very first issues, perhaps after the 
exchange rate.
    Mr. Walberg. But let me go at it from another direction. 
How many countries receiving export subsidies has the 
Department of the Treasury not engaged in its negotiations?
    Mr. Sheets. I don't have a number for you. What I can say 
is that we get all the OECD members through that understanding. 
And my recollection is that we have 18 countries involved in 
the IWG. Now, some of those are also in the OECD. But I think 
that expands the number of countries by another half dozen or 
so.
    Mr. Walberg. If we could get a list of those that you have 
not engaged with, I would appreciate that.
    In your testimony, you note that you will work on possible 
ways to limit official financial support for wide-body 
aircraft, particularly for airlines with access to alternative 
sources of financing.
    Applying this principle more broadly, can you identify 
which aircraft makers, regardless of make of aircraft, would be 
unable to obtain financing without Ex-Im Bank involvement?
    Mr. Sheets. I don't have the analytics with me today to be 
able to answer that question. But we would be happy to take a 
look and respond to you on that.
    Mr. Walberg. There is not a set answer that you could give 
of particular aircraft companies--
    Mr. Sheets. I don't know the list.
    Mr. Walberg. Okay. Mr. Hochberg, reports have shown that 
the Bank mischaracterized--and that is a strong word--large 
businesses owned by billionaires and multinational 
conglomerates as small businesses, and that these errors have 
contributed to as much as $3 billion in authorizations that 
should have gone to small businesses, the small businesses that 
we talked about that supply for the larger corporations, 
including Boeing. How does the Bank justify these errors?
    Mr. Hochberg. Congressman, we take data accuracy as a 
central core mission of the Bank. In fact, last fall we 
identified four key strategies for the Bank. And data quality 
is one of them.
    In fact, just today we applied to OMB and got emergency 
approval. We have updated our application form to make sure 
that we collect more accurate data from the actual exporter 
themselves. We relied on some outside databases, and now we 
have a little bit more of a belt and suspenders--
    Mr. Walberg. So the $3 billion of authorizations that 
should have gone to small businesses are a thing of the past 
now?
    Mr. Hochberg. Well, no. It is not a question of should. It 
is a question of--when the Reuters story came out, 97 percent 
of the transactions were accurate. And we looked at the other 
200 to see how they were categorized.
    One of the difficulties, Congressman, is there are times 
you have a small business that grows large and therefore is no 
longer small, or a small business is sold. So this is a very 
dynamic database that changes, and we continually update it.
    Mr. Walberg. Mr. Chairman, my time has expired.
    Can you give me any latitude for one more question?
    Chairman Huizenga. Had you not called my attention to it, 
it would have made it much easier.
    Mr. Walberg. Everybody else has. But I am trying to live by 
the rules.
    Mr. Hochberg, one final question: Acknowledging these 
reporting errors, the Bank responded and it hired a new 
information officer, as you have said, and said it would 
conduct an overhaul of databases and review of paper documents. 
What is the status of these activities and results, and is it 
your testimony today that no large firms are classified as 
small in Ex-Im's current small business portfolio?
    Mr. Hochberg. We report our small business to Congress. We 
report our small business results. We make the utmost effort to 
make those completely accurate. But as I tried to say earlier, 
sometimes--it is a very dynamic database. Companies get larger 
and are no longer small. They may be sold. They may be sold off 
from a large company. So we have to look at it from a moment in 
time.
    And what I have said is today we enacted an improvement in 
our data system so we can get more accurate data. And it is one 
of the four things we have focused on this year.
    Mr. Walberg. Thank you. And thank you very much--
    Chairman Huizenga. Now your time has expired, Mr. Walberg. 
And I appreciate you being maybe the only person in Washington 
who would rather ask for permission than forgiveness before 
they went ahead with something, but--
    Mr. Walberg. Remember, I am a minister.
    Chairman Huizenga. With that, the Chair recognizes Mr. 
Carney of Delaware for 5 minutes.
    Mr. Carney. Thank you, Mr. Chairman.
    I would like to thank all the panelists for coming in today 
and for addressing the questions that we have asked. And I 
would like to go back to the closing comments that the 
gentleman from Oklahoma made, Mr. Lucas, about the fact that 
the reauthorization of Ex-Im is going to come before us 
sometime in the near future.
    I suspect progress going forward is going to depend in some 
measure on efforts to reform operations and the like. And I 
thought he kind of hit the nail on the head, and I would like 
to associate myself with him as someone willing to look at 
those things to find a path forward.
    And with that, I would like to give the rest of my time to 
the gentleman from the State of Washington, Mr. Heck.
    Mr. Heck. I thank the gentleman.
    I would like to register for the record umbrage I have 
taken at a couple of attacks here today, the first of which is 
the imputing of the motives and integrity and character of Mr. 
Hochberg. We can have our philosophical differences, our policy 
disagreements. But frankly, I think those suggestions do not at 
all match Mr. Hochberg's career of intermittent outstanding 
public service. And I apologize on behalf of this institution. 
I think it is beneath our dignity.
    I also take umbrage at the suggestion that there is some 
kind of--something untoward in the fact that the Export-Import 
Bank loans money to the foreign purchasers of American-made 
airplanes. When people ask me back home, and they often do, why 
is it that there is quite a bit of activity in the aerospace 
industry? My shorthand response--and Mr. Hochberg, I am going 
to ask you for yours--is who exactly is it in the commercial 
lending industry that you think would be willing to lend $200 
million to $300 million for Somalia to buy an airplane, as to 
why the Export-Import Bank is needed.
    But Mr. Hochberg, why is it that there is such significant 
activity at Ex-Im on behalf of America's aerospace industry? 
Let me say that again: America's aerospace industry.
    Mr. Hochberg. Thank you, Congressman. We in the United 
States are in a head-to-head competition with the Airbus on 
large aircraft. We try--we are continually competing with them 
to make those sales. We also make guarantees. We don't make 
direct loans. So we are always engaged in the Bank as a 
guaranteed loan.
    And the chairman asked me about Boeing. When I was with 
Copa Airlines, as an example, they placed an order that will be 
delivered over anywhere between a 9- to 12-year period. And 
part and parcel of that order, giving the order to the United 
States and supporting 12,000 jobs here, versus 12,000 jobs in 
Toulouse and Hamburg, was the fact that we would be a backstop. 
They don't need us for the entire order, but they do need us 
from time to time.
    And they predict over a 12-year period there will be 
financial stress. And in order to make that order and to give 
the confidence that they can make delivery, they needed us as a 
backstop. We may--we could wind up doing zero. But they have to 
know that we are there as a reserve, should the financial 
conditions warrant that we need to step in.
    And let me just add right here. We talk about Boeing. There 
is a lot of discussion of big companies. I visited one of 
Boeing's suppliers in Missouri, LMI. The company started out as 
Leonard's Metal Industries. It is now called LMI. There is a 
company in--Eaton Aerospace in Jackson, Mississippi.
    Boeing is a conglomeration. Just like the Ford Motor 
Company is an assembly plant, the Boeing Company is an assembly 
plant. It is assembling components for more than 15,000 
businesses, about 6,000 of which are small businesses. So we 
are not talking about a large company. We are talking about a 
very deep supply chain that would be impacted if there is any 
untoward action here.
    Mr. Heck. Much has been made over the last few years about 
the importance of America's future, of revitalizing its 
manufacturing base. I realize this is calling for a subjective 
evaluation. But how important to America's manufacturing base 
do you think the thousands and thousands and thousands of 
engineers working across all platforms of technology are to 
America's manufacturing base and our future?
    Mr. Hochberg. If we want to compete--if the United States 
wants to compete in capital goods, if we want to compete with 
the likes of China, Japan, Korea, Germany, and others on 
capital goods, we need to have a backstop to provide the kind 
of long-term 12-year money that is required. And that goes 
above and beyond, as you mentioned, all the engineers, all the 
designers, all the patents and everything else that is 
developed that creates those products we can sell on the global 
marketplace.
    Mr. Carney. I yield back.
    Chairman Huizenga. The gentleman from Delaware yields back.
    With that, the Chair recognizes Mr. Gowdy of South Carolina 
for 5 minutes.
    Mr. Gowdy. Thank you, Mr. Chairman. I actually supported, 
Mr. Chairman, the 2012 reauthorization. And there will be 
another day, in my judgment, to debate the merits and demerits 
of the Bank and the reauthorization. And there will be 
reasonable minds on both sides of that. And there will be 
colleagues that I respect on both sides of that.
    Mr. Chairman, what is not open for debate is whether or not 
the Bank and the Department of the Treasury have a 
responsibility to cooperate with oversight. This committee has 
a responsibility to provide oversight. And you have a 
corresponding obligation to assist with that.
    So Mr. Sheets, can you tell me with a specificity the name 
of the person negotiating the end of the need for Ex-Im Banks?
    Mr. Sheets. I would say consistent with the mandate that 
there are a number of people--
    Mr. Gowdy. Okay. Then, give me all of the names.
    Mr. Sheets. I would say consistent with the mandate, the 
responsibility rests with the Secretary, with me--
    Mr. Gowdy. Okay. Are you going to make yourself available 
for a transcribed interview with the Financial Services 
Committee so they can ask you about the status of those 
negotiations to end the need for the Bank?
    Mr. Sheets. In my remarks today, I outlined in some detail 
the things that we are doing. And we are vigorously engaged--
    Mr. Gowdy. Actually, Mr. Sheets, that was not my question. 
My question is, are you are willing to make yourself available 
for a transcribed interview so my colleagues on the Financial 
Services Committee can ask you with specificity what steps you 
are taking, as the 2012 reauthorization required, to end the 
need for such banks?
    Mr. Sheets. We, as a regular and routine matter, make 
ourselves available to Congress.
    Mr. Gowdy. And you have updated Chairman Hensarling on all 
the progress that has been made, with specificity?
    Mr. Sheets. We, consistent with the mandate--
    Mr. Gowdy. You don't have to say ``consistent with the 
mandate.'' You and I both know what we are talking about.
    Mr. Sheets. Consistent with the mandate, we are required to 
submit an annual report. And--
    Mr. Gowdy. That is not my question, Mr. Sheets. My question 
is very particular. Are you willing to submit to a transcribed 
interview with the Financial Services Committee so they can ask 
you about all the progress you have been making about ending 
the need for Ex-Im Banks? You can start with a yes or a no, and 
then you can explain it.
    Mr. Sheets. And as I said, as a routine matter--
    Mr. Gowdy. No, you haven't said.
    Mr. Sheets. --we are--
    Mr. Gowdy. That is my point, Mr. Sheets, that you haven't 
said--and it took forever for you to respond to a request from 
Chairman Hensarling. I am going to tell you this, Mr. Sheets, 
right now the single best argument against reauthorization is 
you.
    Chairman Hochberg, you referred to transcribed interviews 
as ``inherently adversarial.'' Tell me why you said that.
    Mr. Hochberg. We have made ourselves available, 
Congressman, for briefings repeatedly on the Hill and--
    Mr. Gowdy. Mr. Chairman, I have limited time, and I am 
going to need you to go straight to the answer.
    You described transcribed interviews as inherently 
adversarial. Why did you say that? What is inherently 
adversarial about taking testimony under oath, which I hasten 
to add, is exactly what we are doing today.
    Mr. Hochberg. And I think this is an excellent forum for 
that, sir.
    Mr. Gowdy. Do you think Congress should be able to provide 
a little input into what they think an excellent forum is? Or 
are you the sole arbiter of that?
    Mr. Hochberg. No. Without question, sir. I am saying we 
have made ourselves available for briefings, and we make 
ourselves available for hearings--
    Mr. Gowdy. Will you make yourself and your employees under 
the purview of the Oversight Committee available for a 
transcribed interview, just like everyone else has to submit to 
when they are requested by Congress?
    Mr. Hochberg. We would prefer to have a briefing to 
understand what the transcribed interview would be about before 
we would commit to that. We would like to know what the subject 
is, sir.
    Mr. Gowdy. I am just going to tell you this. For those of 
us who live in States that benefit from the Bank, and for those 
of us who have supported the reauthorization and would like to 
support future reauthorizations, I would encourage you to 
revisit your answer to that question. When the chairman of the 
Financial Services Committee asks to take transcribed 
interviews--which is nothing more than an interview under oath 
behind closed doors--I fail to see how that is appreciably 
different from what you and I are doing right now. You are 
under oath right now.
    Mr. Hochberg. Correct, sir.
    Mr. Gowdy. It is being transcribed. That is what the lady 
beside you is doing. So what is the difference?
    Mr. Hochberg. It is in public, sir--
    Mr. Gowdy. So you prefer for these employees to be brought 
out in public?
    Mr. Hochberg. I would prefer it to be in a hearing setting 
where we have full disclosure, both sides of the aisle can 
hear, and both sides of the aisle can ask questions.
    Mr. Gowdy. Have you ever been to a transcribed interview? 
Because both sides are represented there too, Mr. Chairman.
    Mr. Hochberg. No, I have not.
    Mr. Gowdy. Okay. Then, when you are subject to a 
transcribed interview, which may be soon, you will see that 
both sides get to participate in that.
    Now, I want to ask you one follow-up question because I am 
out of time. You--
    Ms. Moore. Mr. Chairman, I object--
    Chairman Huizenga. It is at the Chair's discretion. 
However, as it has been pointed out, the Chair will now make 
sure that everyone adheres to the 5-minute rule, which includes 
both sides, apparently.
    So with that, sorry, Mr. Gowdy, your time has expired.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Chairman Huizenga. And with that, Mr. Clay of Missouri will 
have his 5 minutes. Exactly 5 minutes.
    Mr. Clay. Thank you, Mr. Chairman. And I will try to 
observe the 5 minutes.
    I want to take a moment to thank Chairman Hochberg for his 
leadership and the Ex-Im Bank's role in supporting so many 
small businesses that are seeking to compete successfully in 
the global market.
    Ex-Im directly supports 17 small and medium-sized 
businesses in the first congressional district of Missouri by 
providing millions of dollars in credit support to businesses 
that sustain many of the families and communities in my 
district.
    Despite the vital role that the Bank plays in supporting 
small businesses, the Bank's reauthorization has been held 
hostage to partisan extremism. I want to reiterate my support 
for H.R. 1031, the Promoting U.S. Jobs Through Exports Act of 
2015, a comprehensive proposal that expands the Bank's support 
for small businesses, enhances its transparency, and reduces 
the Bank's risk to taxpayers.
    With nearly 250 Members of this body lending their support 
to a renewal of the Bank, I remain hopeful that partisan 
extremism will eventually yield to the overwhelming support for 
the Bank's reauthorization.
    And just one question for Mr. Hochberg, if Congress fails 
to reauthorize the Ex-Im Bank, which business sectors would 
begin to feel the pain first?
    Mr. Hochberg. I believe first and foremost would be our 
small businesses in our country; 90 percent of our customers 
are small businesses, and they frequently--in all cases--when 
they come to us, don't have another option. A number of banks 
have already said they have begun to curtail their extension of 
credit to small businesses due to the potential of not being 
reauthorized in July.
    Another company--I would say there are also a lot of 
companies in the supply chain. In the State of Missouri itself, 
I visited a company called LMI in Saint Charles. They are a 
supplier to Gulf Stream, Cessna, and many, many companies. They 
would feel an immediate impact because sales would begin to 
shift towards airplanes made in Canada, Brazil, Europe, Russia, 
China, and places like that.
    Mr. Clay. So Congress' inaction is having a negative impact 
on our economy and will do serious damage if we continue down 
this path?
    Mr. Hochberg. We have already gotten some reports from 
different sectors about that.
    Mr. Clay. Thank you for your response.
    And Mr. Chairman, at this time I would like to yield the 
remainder of my time to the ranking member of the full 
Financial Services Committee, Ms. Waters.
    Chairman Huizenga. Without objection, it is so ordered.
    Ms. Waters. Thank you very much.
    First, let me just commend our witnesses here today on the 
way that you have conducted yourself, despite the attacks that 
have been thrown at you. You have done a wonderful job.
    And let me also say, Mr. Hochberg, Mr. Sheets, you have the 
right to decline transcribed interviews. We are not happy with 
the way that they handle transcribed interviews. They refuse to 
give us memorandums of understanding. So having said that, let 
me go to something that I think we need to expand on.
    Mr. Hochberg, how much have China's export credit agencies 
financed in the past 2 years versus the U.S. Export-Import 
Bank?
    Mr. Hochberg. In the last 2 years, SINOSURE alone has done 
close to $670 billion. The China Ex-Im Bank is not as 
transparent. It is between about $80 million and $90 million. 
On top of that, you have two other Chinese banks that do that 
same kind of work. In that same period last year and the year 
before, we would have done $47 billion.
    Ms. Waters. I'm sorry. Would you give us those numbers 
again?
    Mr. Hochberg. Sure. China--SINOSURE, which is their short-
term credit insurance, the kind of things we do for our small 
businesses, has done $670 billion in the last 2 years alone. 
There is also the China Ex-Im Bank that does generally speaking 
in the $80 million to $90 million range a year. That is 
directly from the chairman of that bank. Plus there are two 
other--there is the China Development Bank and the China 
Agriculture Bank.
    Ms. Waters. Thank you. And thank you for talking about the 
nature and mission of other countries' export credit agencies 
that allows them to support their industries' exports far 
beyond--
    Chairman Huizenga. With that, the gentleman's time has 
expired, per the gentlelady's request.
    And with that, the Chair recognizes the gentleman from 
Arizona, Mr. Schweikert, for 5 minutes.
    Mr. Schweikert. Thank you, Mr. Chairman. Now we all get to 
do the lightning round because we all have to talk a lot 
faster.
    Mr. McCarthy, you might be the arbiter of a little bit of 
fairness here. Total U.S. exports last year: $1 trillion, $640 
billion. Yet, somewhere in here I was hearing that the book of 
business from Ex-Im actually went down a little bit last year.
    Mr. McCarthy. That is correct. There was a decline in the 
book of business. The outstanding exposure went from $113 
billion to $112 billion.
    Mr. Schweikert. Okay. So if you do the simple math, Ex-Im 
represents less than 1 percent of U.S. exports, at least from a 
total book of business. Simple math.
    Mr. McCarthy. I am not an economist, but--
    Mr. Schweikert. But that is correct? That is called--
    Mr. McCarthy. That sounds correct.
    Mr. Schweikert. That is called--
    Mr. McCarthy. The math sounds correct.
    Mr. Schweikert. As a CPA, I am sure you do that in the back 
of your head.
    How did Ex-Im Bank's book of business go down, yet our 
exports went up? Where in heaven are these organizations 
finding surety enhancement credit? What is happening out there 
in the marketplace that is also providing some of this type of 
liquidity? What are your--
    Mr. McCarthy. Let me give you a very high-level answer, 
because this isn't my area of expertise. But my understanding 
is that the Ex-Im Bank loan portfolio increased after the 
financial crisis because liquidity was less available in the 
private market--
    Mr. Schweikert. My focus is the 14-year--
    Mr. McCarthy. --and now there is just more--
    Mr. Schweikert. --just because I have a nice block year 
where I can run the numbers.
    Mr. McCarthy. Okay. I would defer to Chairman Hochberg on 
those, the larger Bank operational issues.
    Mr. Schweikert. Okay. Mr. Thorum, you had a grin on your 
face during that. Walk me through what you understand as to 
where these other organizations are getting import/export 
credit?
    Mr. Thorum. I don't recall having a grin. Sorry.
    Mr. Schweikert. Oh, okay. I'm sorry.
    Mr. Thorum. I am listening intently.
    Mr. Schweikert. Okay. We will go to Mr. Hochberg. Share 
with me what is happening out there in the alternative or 
private marketplace on the loan enhancement side that it was 
able to grow last year in 2014?
    Mr. Hochberg. The private sector has done a spectacular job 
in the last 2 years, and it has far less need for us today than 
there was 2 years ago. As you commented, Congressman, our 
portfolio has and our loan volume has gone down. And that is a 
good thing. We really--we step in when the private sector isn't 
available or cannot do so.
    Mr. Schweikert. So if I came to you right now and said one 
of my ultimate goals here is--because I believe the pricing of 
risk is best in the crowd in the marketplace--how do I continue 
to grow that private guarantee? Because so far, the 
conversation around here has been a bit absurd. If you are 1 
percent of the exports and part of your book of business went 
away, and there were no alternatives, the world comes to an 
end. The math doesn't add up.
    So what would you do to continue to grow the real world, 
instead of the taxpayer-insured world?
    Mr. Hochberg. Actually, I think we do that every day. What 
we are trying to do is encourage more banks to do so. What 
happens is frequently banks and insurance companies will work 
with us and then over time, either they say, we can do this on 
our own now; we are going to take the training wheels off and 
we can now do this. That is our goal, to get--
    Mr. Schweikert. But do you believe that would expand more 
the syndication of risk silos and those mechanics if you 
weren't the easy default?
    Mr. Hochberg. It is sort of an--I only will tell you what 
our customers tell us. I was recently in Alabama, a company 
called--that makes printing.
    Mr. Schweikert. I am less after anecdotes. I am more just 
after the sort of the--
    Mr. Hochberg. They come to me and say, I need to come to 
you because I don't have an alternative. That is why people 
come.
    Mr. Schweikert. Okay. And my basic economics would say they 
don't have an alternative because if you are in the market, why 
should the private sector compete with you?
    Also, in digging through some of the mechanics, do you 
believe you define default and failure to meet reps and 
warrants--don't look through your tabs--the same as Chase Bank 
or any other SIFI out there because you have a wonderful 
default rate, impairment rate. Do you define impairment the 
same as the rest of the major money-centered banking industry?
    Mr. Hochberg. We define faults as charge-offs as where we--
    Mr. Schweikert. Okay. It is full charge-offs. So it is not 
even a violation. But if I am Chase, I have to define an 
impairment, even when there is a failure in my reps and 
warrants.
    Mr. Hochberg. We define--we put in our--we--
    Mr. Schweikert. But what you are telling me right now is 
that is not ceteris paribus, I think was the old word we had in 
college, of you are not doing equal-to-equal--
    Chairman Huizenga. The gentleman's time has expired.
    Mr. Schweikert. --definition of what impairment--
    Thank you, Mr. Chairman. I yield back.
    Chairman Huizenga. With that, the Chair recognizes the 
gentlelady from Wisconsin for a unanimous consent request.
    Ms. Moore. Thank you, so much, Mr. Chairman.
    I ask unanimous consent to place two documents in the 
record: first, as I referenced, ``Cruz Under Fire,'' from the 
Texas businessmen; and second, a statement of support for the 
Ex-Im Bank from the National Association of Manufacturers.
    Chairman Huizenga. Without objection, it is so ordered.
    With that, seeing no other witnesses at this time on the 
Democrat side of the aisle, we will continue on the Republican 
side of the aisle with Mr. Meadows, of North Carolina, who is 
recognized for 5 minutes.
    Mr. Meadows. Thank you, Mr. Chairman. And I thank each of 
you for being here. I really don't have any other questions 
that would help further this debate.
    But I will say, Chairman Hochberg, it is troubling when you 
answer the way that you do when you have somebody like myself 
who is trying to make a decision on reauthorization. And the 
lack of transparency, the lack of willingness to come before 
the Oversight Committee is troubling to me, and quite frankly, 
more troubling to the American people on Main Street who don't 
understand why you would not submit to transcribed interviews 
under oath and why you would want to do it in a public forum.
    And so I would just ask you to reconsider your position, as 
Mr. Gowdy had covered earlier.
    And with that, I have no questions, Mr. Chairman, so I 
yield back. Actually, I yield to Mr. Gowdy for follow up.
    Mr. Gowdy. And I thank my friend from North Carolina.
    So Mr. Chairman, you have heard from an undecided Member of 
Congress who is less than overwhelmed with your answers with 
respect to oversight, and you have heard from a Member of 
Congress who very much wants to support reauthorization. I 
think you said you are not an attorney. I once was.
    Ms. Waters did give you some legal advice, that you have 
the right to decline a transcribed interview. I would also 
remind you that Members of Congress have a right to factor that 
in as they determine whether or not to reauthorize this Bank.
    And before I yield to my friend from South Carolina, I want 
to ask you about something else. In a letter that you wrote to 
Chairman Hensarling, you said that you have made redactions to 
protect the candid exchanges of views by the Bank's board 
members. And I am curious what legal privilege entitles you to 
make that redaction?
    Mr. Hochberg. We submitted our board minutes, board 
transcribes, to the committee. We try and leave out 
deliberative matters and business confidential information so--
    Mr. Gowdy. I get that. But you also said you were going to 
protect candid exchanges of views by the Bank's board members. 
If you were providing oversight, wouldn't you want candid 
exchanges as opposed to, say, stale boilerplate discussions? If 
your responsibility was to provide oversight, wouldn't you want 
candid exchanges?
    Mr. Hochberg. We have a candid exchange at our board 
meetings. But at the end of the day, what is most critical is 
how board members vote, whether they vote for or against the--
    Mr. Gowdy. And I will tell you that the results in life 
matter, but the process may matter even more. And I would 
encourage you to revisit that position with Chairman 
Hensarling, as well.
    And with that, I yield to my friend from South Carolina.
    Mr. Mulvaney. I thank the gentleman.
    Mr. Sheets, very briefly--
    Ms. Moore. Parliamentary inquiry. Whose time is it, sir?
    Mr. Gowdy. I will reclaim my time--
    Chairman Huizenga. It is the gentleman from North 
Carolina's time.
    Mr. Gowdy. I will reclaim my time.
    I yield to the gentleman from South Carolina, Mr. Mulvaney.
    Chairman Huizenga. Without objection, it is so ordered.
    Mr. Mulvaney. Thank you. One of the reasons that we focus 
so closely on these supposed discussions with the folks 
overseas about getting out of the aircraft financing business 
is the data that has been provided to us by Ms. Gianopoulos.
    I read your reports. I have your reports. I have read your 
testimony, which is pretty much a cut and paste of your last 
report. And yet, we have data, real data, that says--if we can 
get it up on the screen--that the Bank's exposure to the 
aircraft market has gone up, not down. It is the dark blue at 
the bottom. It is not going down. You are measuring it in such 
a way where I think you can fill out a piece of paper that says 
you are doing what you are supposed to do. But the real data 
indicates that the exact opposite is happening. That is what is 
causing us the difficulty, sir.
    Other things cause us difficulties about this. Secretary 
Lew was in front of the Financial Services Committee just a 
couple of weeks ago, and I had a chance to ask him the same 
question, a very similar question to what Mr. Gowdy asked you. 
I asked him, ``Can you tell us who is in charge of these 
negotiations?'' And he said he was going to have to get back to 
me on that.
    You identified him just a little while ago, in response to 
Mr. Gowdy's questions, as somebody who was involved. Do you 
think he would be able to recall if he was involved in those 
discussions?
    Mr. Sheets. Thank you. The mandate, as I understand it--
    Mr. Mulvaney. I am not asking about the mandate. You said 
that he was involved. Has Secretary Lew been directly involved 
in the discussions that are mandated by the statute?
    Mr. Sheets. Yes.
    Mr. Mulvaney. Okay. We have asked him to provide us with 
information. I am told by staff that you are the one 
responsible for pulling those together. Are you, sir?
    Mr. Sheets. I have not seen a request--
    Mr. Mulvaney. You have not talked to Mr. Lew about this 
since March 17th, when he appeared before the Financial 
Services Committee?
    Mr. Sheets. I have not seen a request. But as soon as we 
see it, we will--
    Mr. Mulvaney. And I am sorry to cut you off, but I have 8 
seconds.
    The last time this committee asked for information from 
Treasury about this, it took 9 months to get the response. When 
did we get it? Yesterday. Do you understand maybe, sir, why we 
have this type of adversarial relationship?
    Ms. Moore. Mr. Chairman?
    Chairman Huizenga. The gentleman from North Carolina's time 
has expired.
    Does the gentlelady from Wisconsin have an inquiry?
    Mr. Sheets. We do.
    Ms. Moore. No. I just would question--the ranking member 
did--
    Chairman Huizenga. We will--
    Mr. Mulvaney. --the ranking member went a minute-and-a-half 
over.
    Chairman Huizenga. The ranking member was not cut off. It 
was--it was not the gentleman--
    Mr. Mulvaney. Point of parliamentary inquiry?
    Chairman Huizenga. The gentleman from Missouri was the one 
whose time had expired.
    Yes, gentleman from South Carolina? He withdraws. Okay.
    Again, still seeing no Members on the Democrat side who are 
eligible to be recognized in this first round, we will move on 
to the gentleman from Georgia, Mr. Hice, for his 5 minutes.
    Mr. Hice. Thank you, Mr. Chairman.
    Mr. Hochberg, what information does the Bank publicly post 
about either the Bank's transactions, suppliers, buyers or 
other type information?
    Mr. Hochberg. I am not exactly sure I understand the nature 
of the question.
    Mr. Hice. Well, data.gov, for instance. You post this type 
of information for the public regarding transactions and buyers 
and all that type of thing.
    Mr. Hochberg. Right. We post data on data.gov for all 
transactions.
    Mr. Hice. Okay. Why did the Bank remove so much of the 
dataset from the Federal Government's public site in the fall 
of 2014?
    Mr. Hochberg. We moved some of that data because we had 
some complaints from customers, that they felt business 
confidential information, names of their customers, pricing, 
and so forth was included. So in an effort not to in any way 
hurt any U.S. exporters, we took the data down, reviewed it, 
and then put it back up within a few weeks.
    Mr. Hice. When you put it back up, it came right after a 
watchdog group, eximuncensored.com, posted some information. 
And when you reposted, there was a lot of information that was 
missing. Why was that missing?
    Mr. Hochberg. We removed information at the request of 
actual exporters because the last thing we want to do is 
jeopardize their business. So we took out information that they 
felt was business confidential, like who their customers are, 
what their pricing is, but left the rest of the information in.
    Mr. Hice. Without that information being posted, quite 
frankly, how do we know whether or not applicants are being 
treated fairly?
    Mr. Hochberg. First of all, if applicants aren't being 
treated fairly, they complain. So we would get complaints if 
they are not--we took the data down in response to complaints 
that they felt their business was being jeopardized. And we 
took a look at it and we said we don't really need to post the 
names and addresses of their exact customers.
    Our customers--we all keep our customer list somewhat 
confidential. When I was in business, we didn't share customer 
lists with competitors. It is the same in this particular case. 
And that is why data was removed and then promptly put back up.
    Mr. Hice. Why did the Bank decide to remove information 
regarding things like primary supplier of the Ex-Im 
authorizations? Why was it necessary to remove that type of 
information?
    Mr. Hochberg. Again, we responded in response to customers, 
exporters, small businesses that were concerned about trade 
secrets and confidential information being revealed. So in 
order to balance transparency and also protect businessess, we 
tried to strike that balance.
    Mr. Hice. Can you provide this committee with the request 
for these companies' further information for us?
    Mr. Hochberg. As long as I understand precisely what you 
are asking for, we can provide it.
    Mr. Hice. Yes. As to the information that was removed, 
precisely what was removed?
    Mr. Hochberg. What fields? I would be happy to do that. I 
review that personally myself to say, why did you remove these 
fields, do we need to? And we put many of them back up.
    Mr. Hice. All right. Over half of the 27,000-plus 
authorizations that were in the new dataset had ``NA'' listed 
as their primary lender. I find that a bit odd. How do you 
explain not having any information regarding the primary lender 
for over half of the authorizations?
    Mr. Hochberg. I would have to take a look at that data 
and--
    Mr. Hice. You have no idea why NA was placed on 27,000-plus 
in place of a primary lender?
    Mr. Hochberg. I can make conjecture. I don't want to do 
that, sir. I would rather get you the exact facts.
    Mr. Hice. If the Bank has this information, why is it no 
longer available to the public?
    Mr. Hochberg. I would have to look at the data, sir. And I 
would be happy to get it to you. I just--I am not fully--
    Mr. Hice. So you don't have a reason why it would not be 
available? You may not know why it was left out but--
    Mr. Hochberg. If we have the data, we would make it 
available.
    Mr. Hice. All right. The new dataset also lists NA as a 
primary exporter for nearly 1,200 transactions. Do you have any 
idea why that would be the case?
    Mr. Hochberg. I would have to look--I will give you a full 
report. I don't have it at my fingertips, what is the 
percentage--
    Mr. Hice. Doesn't it seem like this would be something that 
would be at your fingertips?
    Mr. Hochberg. Sir, I try and keep as much as I can at my 
fingertips and in my head, but we all have our limits.
    Mr. Hice. Why does the Bank have ``various'' and 
``insurance'' listed as the country, the primary source of 
repayment, and so forth, for 60 percent of these 27,000-plus 
authorizations?
    It is totally in the wrong place, the wrong things. It is 
up here. We can get this information for you so you can look at 
it. I know it is small. But you have various insurance listed 
as the country, the primary source of repayment, and so forth.
    Mr. Hochberg. We offer what are called ``multi-buyer 
insurance policies.'' We have small businesses that sell to 
dozens of companies. So frequently, that--we do not always list 
every single customer they are selling to. Because it is a 
blanket policy that covers many credits.
    Chairman Huizenga. Sorry. The gentleman's time has expired.
    Mr. Hice. Thank you, sir.
    Chairman Huizenga. And again, seeing no Members on the 
Democrat side who are eligible for this first round, we go to 
Mr. Stutzman of Indiana for his 5 minutes.
    Mr. Stutzman. Thank you, Mr. Chairman. And I appreciate the 
panel for being here this morning.
    I want to ask a question here. I will just first of all say 
this to you all. I have been trying to keep an open mind about 
this. And I understand the role that folks try to argue for the 
reauthorization of Ex-Im. I did vote against the last 
reauthorization. And I am inclined to do so again at this 
point, considering the role that the Ex-Im Bank has played and 
also the lack of transparency in the issues that we discussed 
today.
    Mr. Hochberg, could you answer the question that the 
gentleman from Arizona was talking about earlier? What is the 
number of U.S. exports in 2014?
    Mr. Hochberg. Excuse me. The number of exporters that we 
worked with?
    Mr. Stutzman. Dollar amount in exports for 2014 from the 
United States.
    Mr. Hochberg. About $2.35 trillion.
    Mr. Stutzman. About $2.35 trillion?
    Mr. Hochberg. Correct.
    Mr. Stutzman. And the business that you do in that is about 
$112 billion?
    Mr. Hochberg. No. We did--actually, we financed $27.5 
billion worth of exports last year.
    Mr. Stutzman. $27.5 billion?
    Mr. Hochberg. Correct.
    Mr. Stutzman. Out of $2.35 trillion?
    Mr. Hochberg. That is correct.
    Mr. Stutzman. Okay. So it was said earlier by the gentleman 
from Pennsylvania that Ex-Im Bank is hugely successful. Would 
you agree with that?
    Mr. Hochberg. We act as a backstop. I would say we are 
successful.
    Mr. Stutzman. Okay. So out of $2.35 trillion, $27.5 
billion, hugely successful. The question I am asking myself is, 
why can't the private sector handle that small amount? It is 
not that much in the grand scheme of things.
    I want to go to--according to your competitiveness report, 
both France and Germany provided more new medium- and long-term 
export credit than the United States did in 2007; 5 years 
later, we were providing more export credit than both countries 
combined. China provides more than what we do. And in addition, 
based on Treasury's own reports, it does not look like 
congressionally-mandated negotiations to end export credit 
subsidies are being taken seriously by the Department.
    I worry that what might happen to Indiana's exporters as 
these trends continue, especially with China's new role, it 
could disrespect trade rules.
    Let me ask you this. Suppose the world supply of exports 
multiplies 3 or 4 times over the the next few years. Should Ex-
Im grow at that same rate?
    Mr. Hochberg. Congressman, mostly what I have learned in my 
6 years on the job is that we really stand to fill in the gap. 
So when we have a small business--or in your own State, 
Cummings Engine, they don't use us most of the time. But they 
need us in a few select circumstances.
    Mr. Stutzman. Should we just continue to grow at a certain 
pace?
    Mr. Hochberg. We only respond as filling in a gap. If a 
company like Cummings or a small business that I visited, I 
mentioned earlier, is a company called Zante needs us, we step 
in. When they don't need us, we step away.
    Mr. Stutzman. So again, $27.5 billion out of $2.35 trillion 
can't be handled by the private sector, is what you are saying.
    I want to ask you another question. I think most of us 
would agree that in a perfect world, we wouldn't have export 
credit agencies. Would you agree with that?
    Mr. Hochberg. We just don't live in that perfect world.
    Mr. Stutzman. Okay. So considering today's developing 
economies, we have countries all around the world that are 
growing. Have any of them approached you--or I would ask Mr. 
Sheets at the Treasury--have any of them approached you about 
how to develop an export-import model in those developing 
countries?
    Mr. Hochberg. From time to time, we have countries come 
visit us and spend maybe a few days or a week with our staff to 
learn what they can do to support their exports in their 
countries.
    Mr. Stutzman. Mr. Sheets?
    Mr. Sheets. I haven't been involved in any of those 
conversations, and I don't know of any regarding me or my 
staff.
    Mr. Stutzman. But would anybody on staff--if somebody came 
to you all, would you help them develop a model so they 
understand how an export-import model would work?
    Mr. Sheets. Absolutely. Thinking through best practices and 
how to frame an export-import bank would be something that we 
could carry on a conversation with international counterparts 
on quite productively.
    Mr. Stutzman. But wouldn't that then directly contradict 
the congressional mandate to eliminate global export subsidies?
    Mr. Sheets. My focus is on the U.S. side of that equation. 
But--
    Mr. Stutzman. But if we are talking to any foreign entities 
and they are wondering, how does an export-import model work, 
wouldn't that violate the mandate?
    Chairman Huizenga. The gentleman's time has expired. But I 
will allow the answer, if that is all right.
    Mr. Sheets. My answer to your question is it wouldn't, in 
that the issue is gaps in market financing. And these countries 
that don't have ex-im banks don't have well-developed financial 
sectors.
    Mr. Stutzman. Okay. Thank you, Mr. Chairman. It just seems 
like we are contradicting ourselves on trying to eliminate the 
competition.
    Chairman Huizenga. And with that, we have reached the end 
of our first round. We would like to entertain a brief second 
round if that is okay with the panel, as well.
    Chairman Jordan, the chairman of the Health Care, Benefits 
and Administrative Rules Subcommittee, had been kind enough to 
recognize me to speak first in that first round. And it is my 
failure not to recognize him.
    Chairman Jordan. I thank the gentleman.
    Mr. McCarthy, you said you have 31 investigations, open 
investigations related to fraud. Can you tell me--or more 
importantly, can you assure this committee and the Congress 
that none of those 31 are going to turn out like Mr. Gutierrez?
    Mr. McCarthy. So the answer that I gave to this question 
last summer is that we have--including the Mr. Gutierrez 
investigation, we have some allegations of serious misconduct 
and ineffective management.
    Outside of that small number of investigations, we have not 
developed evidence that there is widespread employee 
involvement.
    Chairman Jordan. You said earlier that most of these fraud 
investigations involve a company seeking financing doing 
something fraudulent to get the financing. So it comes from 
outside?
    Mr. McCarthy. That is correct.
    Chairman Jordan. But that is exactly how Mr. Gutierrez's 
situation played out, as well. Wasn't Impex the company, 
basically a shell company trying to get financing? Mr. 
Gutierrez complied with that and worked with that. And so that 
fraud case that resulted in the indictment of Mr. Gutierrez 
earlier this week started with a company doing exactly what you 
allege most of these 31 open fraud investigations are about?
    Mr. McCarthy. Without getting into the details--
    Chairman Jordan. I am asking, is that accurate?
    Mr. McCarthy. Without getting into the details of that 
specific case, I can--
    Chairman Jordan. I will give you the details. A 69-page 
complaint filed in the U.S. District Court, southern district 
of Florida, laid out how Impex Associates was little more than 
an artifice to defraud the Bank. So it started off with an 
outside organization entity trying to defraud the Bank. But 
there was someone on the inside actually taking bribes and 
committing fraud, and now he has been indicted.
    Mr. McCarthy. And in those cases where we see those types 
of outside frauds, we are taking a hard look at whether there 
is employee complicity or participation in the scheme.
    Chairman Jordan. Which takes me back to my question, you 
have 31 of those open right now?
    Mr. McCarthy. Right.
    Chairman Jordan. We want to know, before this Congress is 
asked to reauthorize something with all the problems that have 
been cited here in today's hearing, can you assure us that none 
of those other cases are like Mr. Gutierrez?
    Mr. McCarthy. What I can assure you is that at this time, 
those other cases that we are investigating do not have 
evidence that we have developed of Ex-Im Bank employee internal 
complicity or participation.
    Chairman Jordan. Have you referred any of those other 
cases, any of the 31, to the Justice Department?
    Mr. McCarthy. We work routinely with the Justice Department 
on most of our cases.
    Chairman Jordan. Do you know if the Justice Department is 
going to have--are we going to have an indictment tomorrow? Are 
we going to have an indictment before the next Ex-Im hearing 
that Chairman Hensarling has or Chairman Chaffetz has in this--
when is the next indictment coming?
    Mr. McCarthy. There is a possibility that there will be 
future indictments in this particular case. There is a 
possibility there will be--
    Chairman Jordan. Whoa, whoa, whoa. Wait a minute. That is a 
big statement. You think there is a possibility of future 
indictments in the Gutierrez case, or in some of the other 31 
cases?
    Mr. McCarthy. Both.
    Chairman Jordan. Both? That is important information for 
this committee and this Congress to understand. You made it 
sound earlier like oh, no, no, these are people who filed some 
wrong paperwork or something coming on the outside. But now you 
are saying there is a possibility of future indictments 
relative to the Gutierrez case and the other 31 open fraud 
investigations; is that right?
    Mr. McCarthy. What I am saying is that there is a 
possibiliy of future indictments in the Gutierrez case. And in 
the other 31 cases, there is a possibility of indictments in 
those cases, as well. In those other cases--
    Chairman Jordan. Whoa, whoa, whoa. What other cases? Now 
you are going beyond 31. What other cases?
    Mr. McCarthy. Within those 31 cases. I would not at this 
time--
    Chairman Jordan. But now--
    Mr. McCarthy. --expect indictments of other Ex-Im 
employees.
    Chairman Jordan. So now you are getting to the point I 
want. How do you define those 31 cases? When you testified here 
last summer, The Wall Street Journal had just reported about 
Mr. Gutierrez and three other people. You and Mr. Hochberg 
wouldn't tell me who the three other people were; you wouldn't 
even confirm Mr. Gutierrez in that hearing.
    Were those four individuals--is that one case of fraud, or 
are those four separate cases of fraud? How do you define it?
    Mr. McCarthy. Those are three separate cases.
    Chairman Jordan. Three cases.
    Mr. McCarthy. But one of them involves Mr. Gutierrez and 
another former Ex-Im employee. The other two cases involve one 
employee each. Those are separate cases. And those cases have 
been closed out and I have reported--
    Chairman Jordan. How many individuals are involved in the 
31? It can be a lot more than 31 based on what you just told 
me. Is that accurate?
    Mr. McCarthy. In many of our cases and indictments, we have 
indictments of multiple individuals in these schemes.
    Chairman Jordan. Okay. Mr. Chairman, I think that is huge. 
There is a possibility we have future indictments coming. And 
we have a decision to make here in a couple of months. That is 
huge news and something I think this committee needed to know. 
And I am glad that Mr. McCarthy was able to give us that 
information.
    I yield back.
    Chairman Huizenga. The gentleman yields back.
    With that, the Chair recognizes Ms. Moore of Wisconsin for 
5 minutes.
    Ms. Moore. Thank you so very much, Mr. Chairman. And thank 
you, panel, for your patience with this second round.
    There has been a lot of discussion about the 1992 bailout 
of the Ex-Im Bank. And I guess maybe Ms. Gianopoulos is the 
person that I need to ask about the restructuring of the Ex-Im 
Bank since 1992 to the fee-for-service model. And are they in a 
position for us to have to bail them out again?
    Ms. Gianopoulos. It is difficult to say if we are going to 
have to bail out the Bank again. Of course, some of our 
recommendations over the past few years since the 2012 
reauthorization have focused on the way that the Bank looks at 
its portfolio risk management. And the Bank has been responsive 
to almost all of the recommendations we have made since that 
time to look at how they are calculating that loss.
    Ms. Moore. Thank you so very much. There has been a lot of 
discussion about the stress test that the Bank has undergone.
    Mr. Hochberg, I want you to tell us how you have performed 
under these stress tests.
    Mr. Hochberg. Congresswoman, I think the most perfect 
stress test we have had is the recession that we have just gone 
through. And if I take a look at--I'm sorry. It was in my 
written testimony. But our defaults, as reported to Congress, 
in 2006 were a high of 1.6 percent. We have gone through the 
worst recession, the most stressful time in not only our 
economy, but the global economy. And as you can see in our 
written testimony, our defaults have declined each and every 
year since.
    So that, in my opinion, is still the most perfect stress 
test. On top of that, we do stress tests in our CFO's 
department on a routine basis to look at different stresses in 
our portfolio. But let's not forget that the recession created 
a very perfect example of that.
    Ms. Moore. I appreciate hearing that, particularly since 
under Title I of Dodd-Frank, the globally-systemic risky banks 
that we bailed out during 2008 have not yet submitted their 
living wills, as mandated under Title I of 2010. So I would say 
that there is a lot more risk from Wall Street and from the 
banking community than there is with the Ex-Im Bank.
    Let me ask this question: There has been a lot of 
discussion of Delta. And so, there have been lawsuits. I think 
Delta has really gone to court to suggest that the Ex-Im Bank 
has put them in a very noncompetitive situation. I guess I 
would like for the committee to hear what the results of those 
lawsuits have been. Mr. Hochberg?
    Mr. Hochberg. Thank you, Congresswoman Moore. Delta has 
sued the Bank on four occasions. The courts have ruled in favor 
of the Export-Import Bank in all four occasions and have not 
found anything in their particular case.
    The cases basically say that when we finance a foreign 
carrier, could that potentially have damage to a U.S. company. 
We review, as I have mentioned, every single transaction. Not 
just in the aircraft, but the entire Bank. Any transaction over 
$10 million, we look at for any potential harm.
    The last thing we want do at the Export-Import Bank is harm 
the U.S. economy and hurt the U.S. economy. So we look at--it 
is called economic impact. We look at the positive benefits and 
make an estimation with outside consultants about any potential 
harm and we balance those two against each other.
    So Delta has claimed that. We review every aircraft 
transaction and found no evidence of it.
    Ms. Moore. I guess, in my last minute, I will turn to Mr. 
Sheets. Because we have heard an awful lot of talk about this 
indictment of Mr. Gutierrez and potential indictments coming 
down from Ex-Im Bank.
    I just am so concerned about the lack of indictments for 
what happened in 2008. And I am wondering if what we see in the 
Ex-Im Bank indictments has nearly the globally-systemic impact 
that we saw in 2008, where we have seen very few indictments 
come down.
    Mr. Sheets. The impact of the bank failures during 2008 and 
2009 globally was of astronomical proportions. Not only here in 
the United States, but the global implications of that were 
literally beyond what I can calculate in terms of lost economic 
output and jobs and human and psychic pain. I don't think that 
these indictments are of a similar magnitude.
    Chairman Huizenga. The gentlelady's time has expired.
    Ms. Moore. Thank you, Mr. Chairman, for your indulgence.
    Chairman Huizenga. Not a problem at all, my friend.
    So with that, I am not seeing--I'm sorry. At this point, 
the Chair would like to recognize Mr. Pittenger of North 
Carolina for 5 minutes.
    Mr. Pittenger. Thank you, Mr. Chairman.
    Mr. Hochberg, in just a brief elevator speech, would you 
kindly define for me your mission?
    Mr. Hochberg. Our mission is to support U.S. jobs and 
provide financing through the form of guarantees, insurance, 
and loans, when the private sector is unwilling or unable to do 
so--
    Mr. Pittenger. You see your goal, your objective, a wide 
range of business interests to try to support their objectives?
    Mr. Hochberg. It is to support U.S. job growth.
    Mr. Pittenger. And your loan portfolios, how much?
    Mr. Hochberg. Approximately $112 billion.
    Mr. Pittenger. $112 billion. What was that portfolio in 
2013?
    Mr. Hochberg. I have that right here, in fact. In 2013, it 
was slightly higher. It was just under $114 billion.
    Mr. Pittenger. $114 million?
    Mr. Hochberg. Billion.
    Mr. Pittenger. Billion.
    Mr. Hochberg, you stated a few minutes ago that 90 percent 
of your loans are made to small businesses, correct?
    Mr. Hochberg. That is correct.
    Mr. Pittenger. I am reading here that in 2013, according to 
the Ex-Im Bank's own data, more than 60 percent of the Ex-Im 
Bank's financing benefited just 10 large corporations.
    Mr. Hochberg. I think what we have to remember, 
Congressman, is those 10 corporations that you refer to all 
have very deep supply chains. I was just in Georgia, a company 
called Tomco, a small business that makes CO2--
    Mr. Pittenger. But the people who borrow the money, they 
are--
    Mr. Hochberg. They are a supplier to GE. The way--the 
reason--
    Mr. Pittenger. I reclaim my time. The people who borrowed 
the money were those large corporations, though, is that 
correct?
    Mr. Hochberg. And therefore pay the small businesses--
    Mr. Pittenger. But the loans--let's be clear on the words 
that were said. You said 90 percent of your loans were made to 
small business.
    Mr. Hochberg. No, 90 percent of the loans support small 
business exports. We don't make--
    Mr. Pittenger. --exports. Okay.
    Mr. Hochberg. And even those 10 large companies you are 
referring to, we are talking about their overseas customers, 
not the company themselves.
    Mr. Pittenger. I think we had a word change there. And that 
is fine.
    Mr. Hochberg, do you believe that you have an agenda in 
your role? Do you have a policy preference? Do you believe that 
your goal is to support all businesses and create jobs, or do 
you have a selective interest in what you do?
    Mr. Hochberg. We are looking to support U.S. job growth 
that need us. We have a few mandates from Congress that we 
obviously guide our efforts, as well.
    Mr. Pittenger. Yes. And one of your mandates, of course, is 
to support exports of green energy technology, is that right?
    Mr. Hochberg. That is one of the three mandates we have.
    Mr. Pittenger. That is right. And on the other hand, you 
have adopted policies that permit almost no assistance to coal 
projects, is that correct?
    Mr. Hochberg. No, I would not say that is correct, sir.
    Mr. Pittenger. Let me quote you. Upon announcement of these 
guidelines, you were quoted as saying, ``Without guidelines or 
limits, ever-increasing numbers of new coal plants worldwide 
will just continue to emit more carbon pollution into the air 
we breathe. I strongly support the Administration's efforts to 
build an international consensus such that other nations follow 
our lead in restricting financing of new coal-fired power 
plants.''
    That sounds like you have a pretty clear interest in 
perpetuating your own agenda.
    Mr. Hochberg. Congress has put in our charter since 1992 a 
requirement that we look at the environmental impacts of any 
export we supply. We have to look at the creditworthy and the 
environmental impact. That goes back 23 years.
    Mr. Pittenger. Okay. But this contrasts with what you just 
said a minute ago, that you didn't have your own objectives.
    But let me ask you as well, we looked at the 
creditworthiness. In September of last year, the GAO reviewed 
the Bank's underwriting procedures and found that the Bank 
wasn't requiring simple things like using credit reports--we 
talked a little bit about this, but I really want to delve into 
it a little bit more--verifying that applicants did not have 
any delinquent Federal debt, or even to merely inquire that all 
documentation analysis be in the loan file before approval.
    According to the GAO report--and if you would like, you can 
give us an example which refutes this--your own manual did not 
include instructions for loan officers to use credit reports 
and for the inclusion of all required documents and analysis in 
the loan file prior to approval.
    ``While Ex-Im's review process called for transaction 
participants' information to be checked against various 
databases, it did not include the recommended database that 
identified delinquent debt of the transactions of 
participants.'' Would you like to comment on that?
    Mr. Hochberg. Congressman, I would say two things. We are 
continually trying to improve our methods and do a better job 
of underwriting. I was in business for 20 years, and that is 
what every businessperson does. And we are trying to improve in 
this case, as well.
    One of the things we are looking at that we are having some 
discussions on is how we look at other--I believe you are 
referring to other outstanding debts that a company may have 
before they can apply for a loan or guarantee from us.
    Mr. Pittenger. I yield back my time.
    Chairman Huizenga. The gentleman's time has expired.
    With that, the Chair recognizes the ranking member of the 
full Financial Services Committee, Representative Waters of 
California.
    Ms. Waters. Thank you very much.
    Under Secretary Nathan Sheets, I am looking at an ad that 
was placed in Politico. And this ad basically raises the 
question, why all the applause? And they have the pictures of 
Xi Jinping, the president of the People's Republic Of China; 
Vladimir Putin, the president of the Russian Federation; and 
Francois Hollande, the president of France.
    And then it answers the question: They are applauding those 
in Washington seeking to dismantle the U.S. Ex-Im Bank. And 
then it asks, why? Because shutting down the U.S. Ex-Im Bank is 
good for business and creates thousands of jobs in China, in 
Russia, and in France. And then the ad goes on to say, ``Don't 
let American jobs go overseas. Keep the playing field level for 
American businesses. Reauthorize the Ex-Im Bank.''
    Now, until recently, most large official providers of 
export credits were a party to the OECD arrangement which, as 
you know, sets limits on the rates and terms that government-
backed export credit agencies can provide to their exporters.
    However, according to Ex-Im Bank's latest competitiveness 
report, as of 2013, two-thirds of all official export credit 
support went beyond OECD guidelines. Much of this unregulated 
financing is offered by China, Brazil, India, and Russia on far 
more generous terms than can be offered by Ex-Im Bank and other 
members of the multilateral OECD arrangement.
    Given this trend, it seems to me that this is exactly the 
wrong time to be pushing to scale back or shut down the Bank 
altogether. With many countries doubling down on their efforts 
to spur growth by expanding exports with the support of export 
credit financing, what would it take for these countries to 
entertain U.S. efforts to push for a global reduction in export 
credit support?
    Moreover, how much leverage does the United States actually 
have in pushing for a multilateral reduction in export credit 
financing, when the world is well aware that efforts are 
already under way in Congress to unilaterally shut down the Ex-
Im Bank?
    We have been talking a lot about this today. And this ad, 
even though it is about one of the proponents for 
reauthorization, really does describe what we have been talking 
about. How do these countries get away with ignoring the 
arrangement? And how big are their efforts to do that?
    Mr. Sheets. Thank you. As you point out, the moves towards 
unilateral curtailment of export credits would put us in a much 
weaker position in our negotiations vis-a-vis these important 
emerging market economies that you describe.
    I think the incentive that they have--and it is what is 
driving this international working group and our efforts to 
extend the protocols and the international agreements to 
include the major emerging market economies--is a recognition 
that they benefit from global integration. And that the only 
way they can integrate sustainably into the global environment 
is by playing by the rules of the game.
    And this International Working Group is a vigorous effort 
by the Treasury and others to bring them inside the periphery. 
It is also, as I have said, a key objective in our multilateral 
engagement and our bilateral engagement, to better articulate 
these best practices and expand the periphery of export 
guidelines to the extent that we can.
    Ms. Waters. Thank you very much. And let me just say this, 
I have not been one to go around waving the flag all the time. 
But I feel like we have been pushed around. I feel like the 
greatest country in the world is being not only pushed around, 
but taken advantage of.
    And while we sit here talking about closing down our 
Export-Import Bank, we have people laughing at us and clapping 
and applauding, hoping that we do it. And I don't like it. I 
yield back the balance of my time.
    Chairman Huizenga. The gentlelady yields back.
    With that, the Chair recognizes the Chair of the full 
Oversight and Government Reform Committee, Mr. Chaffetz, of 
Utah.
    Chairman Chaffetz. Thank you.
    Mr. Hochberg, you indicated that you were in Panama with 
the President of the United States. This is a $6-plus billion 
transaction. What is Ex-Im's participation in that?
    Mr. Hochberg. Thank you for giving me that opportunity. The 
order is at $6.6 billion at list prices. That is not what the 
airline will pay. We may do zero financing. I don't know what 
we will do. It is really--that order is going to be over a 9- 
to 12-year period. And we provide--we are there purely as a 
backstop. Should the financial climate be such that they need 
our--
    Chairman Chaffetz. You did participate--sorry, my time is 
short--in 2010 in the transaction--this is with Copa Airlines?
    Mr. Hochberg. Yes.
    Chairman Chaffetz. Yes. And in 2011, that was a value of 
roughly $177 million?
    Mr. Hochberg. I'm sorry. I am not sure I understand--you 
are saying we did a Copa transaction for $177--
    Chairman Chaffetz. In the past, how many Copa transactions 
have you done?
    Mr. Hochberg. I don't have that number off the top of my 
head. I am happy to get it to you.
    Chairman Chaffetz. It is in excess of $500 million. Would 
that sound right?
    Mr. Hochberg. That sounds like it is in the ballpark.
    Chairman Chaffetz. Why would that be? Why do you have to 
help--
    Mr. Hochberg. Why? We are looking at U.S. jobs and we are--
    Chairman Chaffetz. --okay, no, no. Before you filibuster 
the rest of this, what proof do you require to know that they 
can't get private sector financing? Why can't Copa get private 
sector financing?
    Mr. Hochberg. Copa does get a lot of private sector 
financing. They just can't finance 100 percent of their fleet 
privately.
    Chairman Chaffetz. But how do you know that? Where do you 
get this information?
    Mr. Hochberg. We get that information both in talking to 
the actual company, Copa, and we talk to banks and we get a 
sense of what--
    Chairman Chaffetz. Let me read what Copa says, a Copa 
description of you, the Ex-Im Bank, ``The Export-Import Bank 
provides guarantees to companies that purchase goods from U.S. 
companies for export, enabling them to obtain financing at 
substantially lower interest rates as compared to those that 
they could obtain without a guarantee.'' That is true, isn't 
it?
    Mr. Hochberg. Actually, sir--
    Chairman Chaffetz. It is true.
    Mr. Hochberg. Let me answer the question. Do you want me to 
answer the question--
    Chairman Chaffetz. Yes. It is a yes-or-no question--is it 
true or false?
    Mr. Hochberg. We have doubled the price that airlines pay 
for financing in the last 5 years.
    Chairman Chaffetz. Is it true that you provide 
substantially lower interest rates as compared to those they 
could obtain without a guarantee? That is true, isn't it?
    Mr. Hochberg. We don't lend them money, no. We provide a 
guarantee. It is up to the bank to decide what the--
    Chairman Chaffetz. And the American taxpayers are 
responsible for that. They are on the hook for that.
    Mr. Hochberg. They pay a fee. And they have--we have a loan 
loss reserve that backs up--
    Chairman Chaffetz. But what Copa states in their documents 
is accurate, isn't it?
    Mr. Hochberg. We don't make a loan to Copa. We provide a 
guarantee to the bank.
    Chairman Chaffetz. But you provide it at a substantially 
lower rate than they could get with private financing.
    Mr. Hochberg. But we don't--the rate is determined by the 
bank, sir. It is not determined by the Ex-Im Bank. We don't 
determine the rate.
    Chairman Chaffetz. Is it a lower rate or not?
    Mr. Hochberg. The bank essentially is buying insurance on 
the loan.
    Chairman Chaffetz. I am just asking if it is a lower rate 
or not. It is lower than the private sector.
    Mr. Hochberg. The private sector is making the loan with 
our guarantee. We are not making the loan.
    Chairman Chaffetz. But consequently, they get a lower rate.
    Mr. Hochberg. The interest rate is determined by the bank 
that is making the loan, not by us.
    Chairman Chaffetz. Not for the guarantee.
    Listen, what proof do you get from Copa, what 
documentation--this is just one example--that they can't get 
100 percent private sector financing?
    Mr. Hochberg. We look at, do they need us, and we also look 
at foreign competition. Our other goal is to level the playing 
field. They have a choice of buying Boeing and Airbus. And part 
of our charter says we need to level the playing field to make 
sure that U.S. jobs are not put in jeopardy. This transaction 
will support--
    Chairman Chaffetz. The question is, what documentation do 
you get? How do you--
    Mr. Hochberg. It is in their application. They have to 
assert and make a representation, just like they have to make 
other representations in their application.
    Chairman Chaffetz. Will you provide that to this committee?
    Mr. Hochberg. That representation?
    Chairman Chaffetz. The Copa.
    Mr. Hochberg. We can provide that information.
    Chairman Chaffetz. You will provide the Copa documentation 
to this committee by when?
    Mr. Hochberg. Within a week. I--
    Chairman Chaffetz. Fair enough. In a week, you will provide 
to this committee all the paperwork on Copa, correct?
    Mr. Hochberg. We can provide that to you.
    Chairman Chaffetz. Thank you. I appreciate it.
    I yield back.
    Chairman Huizenga. The gentleman yields back.
    Seeing no eligible Members on the Democrat side at this 
time, we will recognize Mr. Carter of Georgia for 5 minutes.
    Mr. Carter. Thank you, Mr. Chairman. And thank all of you 
for being here today. This is an issue that is very important 
to me and of great interest to me and to my district.
    Mr. Hochberg, can you, in your own words, describe to me 
what the mission of the Ex-Im Bank is?
    Mr. Hochberg. Let me try.
    Mr. Carter. Please.
    Mr. Hochberg. Our goal--our mission--
    Mr. Carter. Quickly, if you don't mind.
    Mr. Hochberg. Our mission is to support U.S. jobs and when 
financing is not available in the private sector, or to level 
the playing field with foreign competition.
    Mr. Carter. Okay. Now, the line of questioning that you 
just finished, you were talking about interest rates. And that 
is of interest to me. You don't make the loans, you just 
guarantee the loans?
    Mr. Hochberg. Correct. We do make some loans, but not in 
this particular case.
    Mr. Carter. Let's talk about the wide-body jets. Because 
that seems to be a point of contention. It seems to be what a 
lot of people are concerned about. Do you make those loans?
    Mr. Hochberg. We provide guarantees. We don't make those 
directly.
    Mr. Carter. Okay. It is my understanding that the Ex-Im 
Bank has brought back over a billion dollars, almost a billion 
dollars to the budget. Is that true?
    Mr. Hochberg. We are actually--CBO has scored us for $1 
billion for 2016. That was the original score that CBO--
    Mr. Carter. Where does that money come from? If you are not 
making loans, where are you making money?
    Mr. Hochberg. No. That comes from fees and loans--well, 
fees we collect. And we do--on a small number of direct loans, 
we also make some interest.
    Mr. Carter. Okay. Hang in with me here. Let me try to 
explain to you where I am coming from.
    Mr. Hochberg. Sure. Please.
    Mr. Carter. There are a lot of things that I don't like in 
this world. And I know that is hard to believe, but there are. 
And I don't like cronyism. I don't bureaucracy. But more than 
anything, I don't like debt. And I don't like the fact that our 
country has $18 trillion in debt. I just despise it. I think it 
is, as has been said, a threat to our national security.
    And I am trying to look for ways to satisfy that debt and 
to get rid of that debt. I don't want to do away with something 
that is generating a billion dollars. But if you are not making 
the loans--and what I am hearing from some of the critics is 
that well, they make a loan to--they guarantee a loan to a 
foreign country in order for that country to buy 12 wide-body 
jets. And the loan is so good, the interest rate is so good, it 
is almost as if they pay for 11 and get the 12th one free.
    I don't like to hear that. That is not right. And I don't 
think that is the mission of the Ex-Im Bank. I don't think that 
is what you ought to be doing. Not only that, but we could have 
made money. We could have made that money and put it toward our 
national debt. Is that true?
    Mr. Hochberg. Sir, we actually make money and help pay the 
deficit. We sent $675 million for deficit reduction--
    Mr. Carter. But the point is, if that is true, you could 
have made more. I appreciate that. But we need a lot more. We 
have $18 trillion in debt. That is a lot of money. That is a 
lot of debt we have to satisfy. And we need more.
    Is it true what I am hearing? I am asking you, is it true 
that these companies, when they buy 12 jets, they get such a 
good interest rate that they almost get a 13th one free?
    Mr. Hochberg. No. I have never heard anything remotely 
close to that assertion before. Never.
    Mr. Carter. But you admitted just a little while ago that 
they do get a better interest rate?
    Mr. Hochberg. They pay more than any U.S. carrier ever pays 
for interest. We actually--we verify, whenever we do a 
transaction, that U.S. carriers borrow at far better rates than 
any foreign carrier that we support.
    Mr. Carter. But it just occurs to me--I am a small 
businessman, and when I go to the bank to borrow money, I don't 
get the same interest rate as a big company does. And I 
understand that. I get that. I am a bigger risk. It appears to 
me that is part of your mission, to fill that void there and to 
help American companies to be able to get that backing and that 
financing.
    There is a price to that. And I just want to know, are you 
maximizing that price?
    Mr. Hochberg. Our job is to maximize jobs, not to maximize 
price.
    Mr. Carter. Okay. Well--
    Mr. Hochberg. And let me just add, when it comes to wide-
body planes, sir, carriers--you refer to the Mideast. They can 
buy an Airbus wide-body or a Boeing wide-body. We get the jobs 
in America, we get the jobs in Europe. That is our choice.
    Mr. Carter. I understand that. But, again, I think you are 
missing a great opportunity here. And we need it. We need it 
badly. And I need you to focus more on how we can generate more 
income for this country. I don't want to raise taxes. Nobody 
wants to raise taxes.
    But if you ask me, because you are using the full faith and 
backing of the U.S. Government, should we be making money off 
of foreign countries and foreign companies? Yes. What is wrong 
with that? We have $18 trillion in debt. We need to be making 
it somewhere. Remember, I am a businessman. I am looking for 
revenue.
    Mr. Hochberg. We supported $27.5 billion worth of exports 
last year alone.
    Mr. Carter. That is fine. But again, you can do better.
    Mr. Hochberg. That is money--that is--
    Mr. Carter. But can we do better? That is my point.
    Mr. Hochberg. We step back when the private sector can do 
it. The only time we are stepping in is when the private sector 
can't, or to level the playing field.
    Mr. Carter. And there ought to be a price for that. That is 
my point. You have it right there. That is my point. There 
ought to be a price for that, for the full backing of the 
United States Government.
    Mr. Hochberg. That is where the $675 million is from.
    Chairman Huizenga. The gentleman's time has expired.
    Mr. Carter. Thank you, Mr. Chairman. That was the fastest 5 
minutes I have ever seen.
    Chairman Huizenga. It is amazing how quickly it goes. That 
is very true. I believe that my ranking member has a unanimous 
consent request.
    Ms. Moore. Thank you so much, Mr. Chairman.
    I would like to enter into the record an assessment that 
demonstrates that government export credit pricing, Ex-Im Bank 
pricing, is on par with commercial markets, and demonstrates 
that the foreigners are paying more for credit than U.S. 
borrowers.
    Chairman Huizenga. Without objection, it is so ordered.
    And with that, actually, I have my own unanimous consent 
request. I would like to enter into the record a Wall Street 
Journal article entitled, ``Officials at Ex-Im Bank Face 
Investigations,'' which was dated June 23, 2014.
    And without objection, it is so ordered.
    The good news is, we are almost done. The bad news for some 
of you is, you are almost done. I do have a brief moment here, 
as well, to take my 5 minutes. I don't plan to take all 5 
minutes.
    But I do feel that this needs to be said. I appreciate, Mr. 
McCarthy, you coming forward with that information regarding 
some of the other potential situations that you see with some 
of the Bank employees. I think it is unfortunate it took 2\1/2\ 
hours for us to get to that point. But that is important 
information, nonetheless, to have.
    Mr. Hochberg, I do want to ask you about the best places to 
work in the Federal Government rankings report that has come 
out. For those who aren't familiar with it, it is rankings that 
include the views of over 92,000 Federal employees; 389 Federal 
organizations are ranked according to overall employee 
satisfaction and commitment, as well as 10 additional workplace 
issues such as tragic management, teamwork, leadership, and 
life/work balance.
    The Partnership for Public Service uses the data from the 
Office of Personnel Management (OPM) Federal employee viewpoint 
survey, as well as surveys administered by 11 additional 
agencies to put this into place.
    In a resent survey conducted by the Partnership for Public 
Service on the best to worst places to work in government, 
unfortunately Ex-Im literally ranked dead last: 28 of 28 for 
``effective leadership,'' in the most recent survey. This also 
caught my eye, ``In the category of support of diversity, there 
has been a decline of 20-points since 2009, since this 
Administration has come into place.''
    That 20-point decline has allowed Ex-Im to slide to 27th 
out of 28 Federal best places to work. This is something else I 
think is maybe relevant to what Mr. McCarthy is dealing with. 
When asked if ``my organization's leaders maintain high 
standards of honesty and integrity,'' only 42 percent said yes. 
And asked whether they could ``disclose a suspected violation 
of any law, rule, or regulation without fear of reprisal''--
this is whistle blowing--only 50 percent of the employees 
responded yes, they would feel comfortable and felt that they 
could disclose a violation of any law.
    I don't know, Mr. McCarthy, if you are experiencing any of 
that fear when you are going in and dealing with employees. 
That would obviously be more than unfortunate if that is the 
case. I don't know if you care to elaborate?
    But Mr. Hochberg, my question to you is, why do you think 
that is? And what are you doing about that?
    Mr. Hochberg. We take that very seriously, Mr. Chairman. We 
have had a number of stresses on the agency, and frankly, the 
political environment has not helped. We were under 
construction for the past 2 years. But I don't want to just 
make those excuses.
    I told you earlier in the hearing that we have made data 
and improving our data quality one of our top four priorities 
of the year. And the other one is improving the workplace 
environment. I take that very seriously. I meet constantly with 
employees. I meet with them informally, have coffee with 
employees randomly selected every month. We have a number of 
programs to make Ex-Im a more first-tier place to work.
    But let's not mistake the fact that we have had the kind 
of--the political environment, the threat of a shutdown has 
certainly--for the last 3 years, our employees have been under 
extreme stress on this.
    Chairman Huizenga. But just a moment. This is not about 
overall. This is a ranking. So everybody has experienced that--
    Mr. Hochberg. None of them has experienced a shutdown--
    Chairman Huizenga. --including my own employees who got 
furloughed. And stresses of building, just ask the people in 
Cannon, ask the people anywhere around. That is happening all 
the time.
    I guess my question to you, maybe to refine that is, would 
you be willing to share with your committee and the oversight 
committee here, subcommittees, specifically what your plan is? 
Because I find it very disturbing that in the past 5 years, 6 
years, this agency has slid 20 points in its ranking in support 
of diversity.
    If that is something that is important, we saw this--not--
this is not your bailiwick. But we saw some similar things with 
the CFPB and other places, where there is a feeling that there 
is a hostile work environment. And if you have 50 percent of 
your employees who believe that they could come under some sort 
of reprisal for being a whistleblower, that does not bode well. 
That has nothing to do with workplace stress and whether 
government is getting shut down--
    This is extremely serious. I would anticipate you sharing 
that with us. And I would assume my colleagues on the other 
side of the aisle would be very, very concerned about that, as 
well, and would like to have that.
    With that, I would like to thank our witnesses, especially 
those who maybe weren't as actively engaged in the 
conversation. You may be thankful for that, as well. But we do 
appreciate and value your time for appearing with us today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    And if there is no further business, without objection, our 
joint subcommittees stand adjourned.
    [Whereupon, at 1:15 p.m., the hearing was adjourned.]
    
    
    
    

                            A P P E N D I X



                             April 15, 2015
                             
                             
                             
                             
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