    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

             REAUTHORIZING THE U.S. DEVELOPMENT FINANCE CORPORATION

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

                                    HEARING

                                     OF THE

                     SUBCOMMITTEE ON EAST ASIA AND PACIFIC

                                   BEFORE THE

                          COMMITTEE ON FOREIGN AAFAIRS
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 March 11, 2025

                                   __________

                                Serial No. 119-4

                                   __________

            Printed for the use of the Committee on Foreign Affairs

                     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Available: http://www.foreignaffairs.house.gov, http://docs.house.gov,
                           or http://www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    60-302 PDF                WASHINGTON : 2025

                          COMMITTEE ON FOREIGN AFFAIRS

                        BRIAN J. MAST, Florida, Chairman

    MICHAEL T. McCAUL, Texas              GREGORY W. MEEKS, New York,
    CHRISTOPHER H. SMITH, New Jersey         Ranking Member
    JOE WILSON, South Carolina           BRAD SHERMAN, California
    SCOTT PERRY, Pennsylvania            GERALD E. CONNOLLY, Virginia
    DARRELL ISSA, California             WILLIAM R. KEATING, Massachusetts
    TIM BURCHETT, Tennessee              AMI BERA, California
    MARK E. GREEN, Tennessee             JOAQUIN CASTRO, Texas
    ANDY BARR, Kentucky                  DINA TITUS, Nevada
    RONNY JACKSON, Texas                 TED LIEU, California
    YOUNG KIM, California                SARA JACOBS, California
    MARIA ELVIRA SALAZAR, Florida        SHEILA CHERFILUS-McCORMICK,
    BILL HUIZENGA, Michigan                  Florida
    AUMUA AMATA COLEMAN RADEWAGEN,       GREG STANTON, Arizona
        American Samoa                   JARED MOSKOWITZ, Florida
    WARREN DAVIDSON, Ohio                JONATHAN L. JACKSON, Illinois
    JIM R. BAIRD, Indiana                SYDNEY KAMLAGER-DOVE, California
    THOMAS H. KEAN, Jr, New Jersey       JIM COSTA, California
    MICHAEL LAWLER, New York             GABE AMO, Rhode Island
    CORY MILLS, Florida                  KWEISI MFUME, Maryland
    KEITH SELF, Texas                    PRAMILA JAYAPAL, Washington
    RYAN K. ZINKE, Montana               GEORGE LATIMER, New York
    JAMES C. MOYLAN, Guam                JOHNNY OLSZEWSKI Jr, Maryland
    ANNA PAULINA LUNA, Florida           JULIE JOHNSON, Texas
    JEFFERSON SHREVE, Indiana            SARAH McBRIDE, Delaware
    SHERI BIGGS, South Carolina          BRADLEY SCOTT SCHNEIDER, Illinois
    MICHAEL BAUMGARTNER, Washington      MADELEINE DEAN, Pennsylvania
    RYAN MACKENZIE, Pennsylvania

                  James Langenderfer, Majority Staff Director
                     Sajit Gandhi, Minority Staff Director

                                     ------

                     SUBCOMMITTEE ON EAST ASIA AND PACIFIC

                       YOUNG KIM, California, Chairwoman

    MICHAEL T. McCAUL, Texas             AMI BERA, California, Ranking
    ANDY BARR, Kentucky                      Member
    AUMUA AMATA COLEMAN RADEWAGEN,       BRAD SHERMAN, California
        American Samoa                   JOAQUIN CASTRO, Texas
    RYAN ZINKE, Montana                  JARED MOSKOWITZ, Florida
    JAMES MOYLAN, Guam                   GABE AMO, Rhode Island
    SHERI BIGGS, South Carolina          JOHNNY OLSZEWSKI, Maryland
    RYAN MACKENZIE, Pennsylvania

                     Tom Hill, Subcommittee Staff Director

                             C  O  N  T  E  N  T  S

                                  ----------

                                REPRESENTATIVES

                                                                       Page
    Opening Statement of Subcommittee Chairwoman Young Kim...........     1
    Opening Statement of Subcommittee Ranking Member Ami Bera........     2

                                   WITNESSES

    Statement of Hon. Ted Yoho, D.V.M., Former U.S. Representative,
      Florida's 3rd Congressional District...........................     3
      Prepared Statement.............................................     6
    Statement of Rob Mosbacher, Former Ceo, Overseas Private
      Investment Corporation.........................................     9
      Prepared Statement.............................................    11
    Statement of Erin Collinson, Director of Policy Outreach, Center
      For Global Development.........................................    16
      Prepared Statement.............................................    18

                                    APPENDIX

    Hearing Notice...................................................    44
    Hearing Minutes..................................................    45
    Hearing Attendance...............................................    46

                            Material for the Record

    NENSC, Submitted by Chairwoman Young Kim.........................    47

             REAUTHORIZING THE U.S. DEVELOPMENT FINANCE CORPORATION

                                  ----------

                            Tuesday, March 11, 2025

                      House of Representatives,
                 Subcommittee on East Asia and Pacific,
                                  Committee on Foreign Affairs,
                                                        Washington, DC.

        The subcommittee met, pursuant to notice, at 2:15 p.m., in
    room 2172, Rayburn House Office Building, Hon. Young Kim (chair
    of the subcommittee) presiding.
        Mrs. Kim. The Subcommittee on East Asia and the Pacific
    will come to order.
        The purpose of this hearing is to discuss the needed
    reforms of the DFC to be considered for the reauthorization. I
    now recognize myself for an opening statement.

         OPENING STATEMENT OF SUBCOMMITTEE CHAIRWOMAN YOUNG KIM

        Again, welcome to the East Asia and the Pacific
    Subcommittee hearing on reauthorizing the U.S. Development
    Finance Corporation. I want to welcome and thank our witnesses
    for joining us today as we discuss the future of the U.S.
    International Development Finance Corporation, or DFC, which is
    a vital tool of American economic and foreign policy.
        Thanks to your valuable input, the DFC was created through
    the 2018 BUILD Act and it built upon its predecessor, the
    Overseas Private Investment Corporation, or OPIC, by
    integrating other development finance tools to better mobilize
    private capital. Despite being a younger agency, DFC has
    demonstrated a significant step forward in enhancing our
    Nation's ability to promote private sector led development in
    emerging markets, advancing the U.S. national security interest
    and status on the global stage, and strengthening communities
    and livelihoods around the world.
        When U.S. foreign assistance is used efficiently, it can
    have a great impact in advancing the U.S. national security and
    economic interests. In fact, it can even make a profit for U.S.
    taxpayers. For instance, in fiscal year 2023, the DFC's revenue
    exceeded costs by 341 million dollars.
        The DFC is approaching the end of its 7-year authorization
    in October of this year. While DFC's current lending cap stands
    at 60 billion, double that of OPIC, it has already lent more
    than 49 billion dollars. If the current deal in the pipeline
    continues at this rate, the DFC will reach its lending cap
    before October, making this reauthorization process more
    urgent.
        Our subcommittee has the unique opportunity to shape and
    reauthorize the DFC with much needed reforms to ensure that it
    remains agile, effective, and aligned with America's national
    security priorities. The Biden administration had an ambiguous
    definition of national security and thus pushed through
    projects that advanced the administration's diversity and green
    agenda. Furthermore, we know that the DFC was unable to fully
    utilize its equity investment tool and was prohibited from
    operating in countries that would be particularly useful for
    advancing U.S. national security. These are just some of the
    evident issues that must be addressed in the reauthorization
    this year.
        Today's hearing will therefore explore several important
    questions. One, how can the DFC better address emerging threats
    and opportunities such as energy security and supply chain
    resilience? Two, what reforms or additional authorities are
    needed to enhance the DFC's ability to compete with the Chinese
    Communist Party's Belt and Road Initiative? And third, how can
    we ensure that the DFC's operations remain transparent,
    accountable, and targeted to deliver measurable outcomes for
    our partners abroad and American taxpayers?
        We must ensure that the DFC is equipped to face the 21st
    century challenges with cutting edge approaches. The
    modernization and reauthorization process offers an opportune
    moment to amend the DFC's mandate to expand its flexibility and
    financial toolkit.
        With that, we have a distinguished panel of witnesses
    before us today whose insights will inform the reauthorization
    process. Their testimony will help us assess DFC's progress,
    identify gaps and areas for improvement, and chart a path
    forward to ensure this institution remains a cornerstone of
    U.S. global leadership.
        The chair now recognizes the ranking member, the gentleman
    from California, Mr. Bera, for any statements that you may
    have.

              OPENING STATEMENT OF RANKING MEMBER AMI BERA

        Mr. Bera. Thank you, Madam Chairwoman, for hosting today's
    important hearing. I also want to thank the witnesses for
    bringing their expertise before the subcommittee today.
        As the chairwoman mentioned, it's been less than 7 years
    since Congress passed and President Trump signed into law the
    BUILD Act, establishing the U.S. International Development
    Finance Corporation, or DFC. The DFC was created to modernize
    how the United States approaches development and better allows
    to compete with our strategic competitors. The DFC was built to
    catalyze our Nation's strength, namely our strong, vibrant
    private sector which is the envy of the world.
        I'll also note since our former colleague and my good
    friend Ted Yoho is here, he was instrumental in putting that
    bipartisan piece of legislation together that passed with a big
    vote. And again, I think President Trump should be proud of his
    legacy in helping create the Development Finance Corporation.
        When the BUILD Act passed, a mentor to both of us, HFAC
    Chairman Ed Royce noted that one of his goals was to creating
    lasting institutional linkages with other development agencies.
    Today, one of those development agencies that DFC works closely
    with, USAID has effectively been dismantled through the illegal
    cancellation of programs. And that really does damage U.S.
    security.
        USAID played an outsized role in helping DFC generate
    projects through their field staff station that U.S. missions
    throughout the world. In addition, the foreign assistance
    freeze has also prevented the DFC from the timely delivery of
    payments, damaging the U.S. credibility as it seeks to provide
    an alternative to China's Belt and Road Initiative that
    reflects our values and strengths.
        I appreciate the efforts to make sure taxpayer dollars are
    being used responsibility and in the most efficient and
    effective way. But it's critical that we allow these flows to
    start again and that we avoid unfortunate errors that present a
    gift to our strategic rivals.
        In a bipartisan way, last year under Chairman McCaul and
    Ranking Member Meeks, the bipartisan DFC Modernization and
    Reauthorization Act passed out of the House Foreign Affairs
    Committee. The bill contained several critical DFC reforms,
    including modifying equity scoring to be calculated on a net
    present basis, allowing the DFC to support high-income
    countries under certain conditions, allowing the DFC to pay a
    percentage of its employees outside of the GS scale to attract
    highly qualified talent from the private sector, and increasing
    the maximum contingent liability, MCL cap, from 60 billion to
    120 billion so the DFC can take on new projects.
        It's my belief as we go into the reauthorization that the
    DFC Modernization and Reauthorization Act would serve as an
    excellent foundation and for the work as we look at
    reauthorization this year.
        With that, I look forward to hearing from the witnesses,
    look forward to getting their perspective and their expertise.
    And I'll yield back.
        Mrs. Kim. Thank you. The chair now recognizes the--oh, we
    did that. Other members of the committee are reminded that
    opening statements may be submitted for the record. We are
    pleased to have a distinguished panel of witnesses before us
    today on this very important topic: Hon. Ted Yoho, former U.S.
    Representative of Florida representing 3d District, and Mr. Rob
    Mosbacher, former CEO of the DFC's predecessor agency of OPIC;
    and Ms. Erin Collinson, Director of Policy Outreach at the
    Center for Global Development.
        The committee recognizes the importance of the issues
    before us and is grateful to have you here to speak with us
    today. Your full statements will be made part of the record,
    and I'll ask each of you to keep your spoken remarks to 5
    minutes in order to allow our members to ask questions.
        I now first recognize Dr. Yoho for your opening statement.

                         STATEMENT OF TED YOHO

        Dr. Yoho. Thank you, Madam Chair. It's my honor to address
    this committee on the importance of the first 7-year
    reauthorization of the U.S. Development Finance Corporation.
    It's imperative that the DFC has a strong bipartisan prompt
    reauthorization for this important development tool so that it
    can fulfill the Administration's goal of making America safer,
    stronger, and more prosperous. Excuse me.
        The DFC has the ability to develop the basic infrastructure
    projects needed in developing countries to increase the
    recipient country's economic situation by creating jobs, thus
    helping countries transition from aid to trade. This benefits
    the U.S. and its taxpayers by providing needed resources like
    critical minerals and opens up new markets for U.S. exports to
    recipient nations.
        The DFC is also the preeminent development tool to counter
    the Chinese influence in the developing world via the Belt Road
    Initiative. To date, China invested an estimated one trillion
    dollars in 147 countries since 2013 compared to the U.S.' 76
    billion dollars in 114 countries since 2019. The Chinese
    influence is gaining in countries around the world while the
    U.S., ours is waning. China strategically invests in ports,
    mines, rails, roads, bridges, energy, telecommunications, and
    the procurement of all the minerals from rare earths used in
    our military jets to everything electronic along with copper,
    gold, aluminum, and steel.
        These investments serve to grow China's economy by opening
    up new trading markets, strengthen military from the increased
    revenues, corner the commodities on the world market, and they
    set the price. They leverage their influence against other
    countries to pressure them to their demands, including the U.S.
    This allows China to expand their communist ideologies and
    influences in the developing world.
        To date, the DFC has had some notable project success but
    pales in comparison to the strategic investments the CCP has
    done. The Chinese require recipient countries to use Chinese
    State sponsored businesses, workers, and engineers. They build
    Chinese hotels, restaurants, and they have very little impact
    on the local labor market.
        To be more competitive in a divided world based on
    ideologies, the U.S. should focus on developing infrastructure
    projects in strategic regions of the world to build economies
    and jobs while increasing trade and increasing strong
    alliances. I recommend some topics to be considered in the DFC
    reauthorization to make it stronger.
        First, I'd give the DFC more flexibility by raising a
    country of eligibility from low-middle-income to middle-upper-
    income levels. This gives the DFC the option to do more
    projects strategically in regions that will strengthen our
    national security and increase trade. And illustration is the
    country of Panama where the DFC can't operate due to these
    restrictions yet China is heavily invested on both sides of the
    Panama Canal.
        Second, the maximum contingent liability, MCL, should be
    raised from 60 to 150 billion dollars--some are recommending up
    to 250 billion dollars, that's going to be up to you guys--to
    enable the DFC to take on larger, more impactful projects. By
    the end of 2024, the DFC has lent out over 90 percent of its
    MCL as the chairman, Madam Chair, has recognized, meaning they
    could not approve any new deals until Congress reauthorizes and
    appropriates more funds. And I'd like to mention that the DFC
    doesn't give out 100 percent of its funds in grants. Over 90
    percent are loans which are repaid. And for 2024, the DFC lent
    out over 57 billion dollars in loan yet operates with less than
    a 1-percent failure rate.
        Third, the scoring method the OMB, Office of Management and
    Budget, uses needs to be reinterpreted as intended by Congress.
    Presently, OMB scores any money lent by the DFC as a grant
    which is a dollar for dollar and will never be repaid. It's
    more accurate to view these moneys lent on a net present value
    that shows a positive return on investment. By scoring moneys
    lent on a net present value versus grants follows Congress'
    original intent.
        If OMB does not change their method of scoring, excuse me,
    it restricts the DFC's effectiveness and it cannot live up to
    its full potential. For the DFC to expand its reach and its
    impact and grow its capacity, it needs to have more boots on
    the ground overseas who can proactively identify new
    investments. And this will increase its efficient, speed, and
    making investments.
        One last thing here, the DFC needs to be better integrated
    with other foreign development tools of the U.S. Government.
    Grant-based programs such as those led by the previous USAID
    and MCC play a critical role in identifying and de-risking
    investments for the DFC. And this allows for the first
    investment to attract private equity. Not having these tools
    available would be a mistake.
        Lastly, DFC can play a unique and leadership role in
    driving near-and friend-shoring of highly strategic sectors and
    supply chains such as rare earth metals and pharmaceuticals.
        Thank you, Madam Chair, and I yield back.
        [The prepared statement of Dr. Yoho follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mrs. Kim. Thank you, Dr. Yoho.
        I now recognize Mr. Mosbacher for your opening statement.
    Sorry for butchering your name.

                       STATEMENT OF ROB MOSBACHER

        Mr. Mosbacher. It's not the first time. Thank you.
    Chairwoman Kim and Ranking Member Bera, distinguished members
    of the committee, it's a great honor for me to have the
    opportunity to testify with respect to the reauthorization of
    U.S. International Development Finance Corporation and to be
    joined by my good friend Ted Yoho with whom I worked closely in
    2018.
        Having served three and a half years as head of OPIC and
    having had the privilege since the passage of the BUILD Act to
    serve on the Development Advisory Council which was created
    under the statute, I've had a chance to see firsthand the
    pluses and minuses, the strengths and weaknesses of the DFC.
        I'd say after monitoring the transition from OPIC to the
    DFC and then observing the last several years of performance, I
    believe I can say without qualification that the DFC is not
    only been a huge improvement over OPIC but has also been a huge
    success. The agency went from 3 to 4 billion dollars of
    commitments per year to over 12 billion and from a total
    portfolio of 29 billion to over 50 billion today. And over 70
    percent of those projects are in low and lower-middle-income
    countries.
        Yet, as impressive as that is, it's still a fraction of the
    Belt and Road financing done by China over the past 5 years.
    The question is how to take the DFC to the next level. I
    believe that the committee did an excellent job last year of
    addressing many of the areas that need to improve in H.R. 8926
    and I hope you will continue to build on that base. But before
    reviewing those areas, I want to suggest what underlying
    objectives I believe should drive this reauthorization process.
        In my judgment, the DFC needs to be more proactive than
    reactive, more physically present in strategically important
    markets, and more willing to take on risk that clearly will
    lead to greater private sector investment. In order to achieve
    those objectives, there are several steps that can be taken in
    the reauthorization.
        First, the DFC needs much more flexibility in terms of the
    income levels of countries which the agency is eligible to do
    business. While I believe the principal focus of the agency
    should continue to be on doing deals in low-and lower-middle-
    income countries where capital and credit is so scarce, I agree
    that changing the classification from World Bank income
    credit--income levels rather to World Bank lending levels is a
    step in the right direction. I also believe that giving the DFC
    CEO the authority to certify projects in upper-middle-income
    countries is a good change.
        A second essential change and one that is a leftover piece
    of business from the BUILD Act is to fix the way equity
    investments are scored to a net present value approach rather
    than treating those investments as grants. For decades, OPIC
    participated in private equity funds and always as senior
    secured debt. So for the decades that they had investments in
    private equity funds as debt, they nevertheless earned on a
    portfolio basis a 6 percent return. So I don't understand why
    budget officials seem to feel that there's no way of
    effectively evaluating risk when we have decades of experience
    of doing just that.
        A third area of need in improvement that can help expand
    the capacity of the DFC to compete for projects around the
    world is to increase the risk tolerance of the agency so that
    projects attract much more private capital. The more DFC can
    de-risk projects by assuming more risk on their balance sheets
    or the balance sheets of others, the more private sector
    investors will feel comfortable being part of the deals. There
    are a variety of ways to do that, including concessional
    finance, blended finance, small grants and technical
    assistance, first loss grants, and sharing risk with other
    bilateral or multilateral financial institutions.
        The committee recognized the importance of these tools
    through its support for allowing the DFC to accept a creditor
    status that is subordinate to that of other creditors in H.R.
    8926. I hope the committee will strongly encourage the agency
    to be more risk tolerant and be more creative in the use of the
    many tools to de-risk projects that can attract more private
    capital. And I would reward DFC employees that exhibit such
    creativity in structuring deals.
        A fourth area to focus on relates to how to extend the
    coverage of the DFC to be more present in strategically
    important markets around the world. While the DFC could benefit
    enormously from opening some more offices in Latin America,
    Africa, Asia, and the Far East, the quickest way to expand
    their presence and improve their market intelligence is to team
    up with other like minded multilateral or bilateral financial
    institutions. A perfect example is to team up with the private
    sector arm of the Inter-American Development Bank called IDB
    Invest.
        IDB Invest has offices in virtually every country in Latin
    America and the Caribbean and has much greater access to the
    kind of deals that the DFC could help finance, particularly in
    the critical minerals as well as hard and soft infrastructure
    areas. I might add that IDB Invest has 300 people in Latin
    America and the Caribbean areas. We have 2 from the DFC, and
    that may be one more that are actually still working.
        So we believe that it would be much better if we can expand
    presence by teaming up with like-minded institutions. It's also
    important to recognize the role that USAID missions have played
    in helping drive economic growth, trade, and investment
    initiatives through programs like Power Africa, Prosper Africa,
    and the African Growth and Opportunity Act, AGOA.
        Finally, despite all of the aforementioned improvements
    that can be made to the DFC, these will all come to naught if
    businesses that would like to deal with the DFC decline to do
    so because it takes too long to process deals. Unfortunately,
    this is happening way too much. Consequentially, I would urge
    the committee to sit down with the DFC to see how to streamline
    and improve and accelerate the processing of deals. And I
    believe that should include a review of the current 10 million
    dollar threshold for congressional notifications. I'd love to
    see it increase to 50 or 100 if possible.
        So Chairwoman Kim, Ranking Member Bera, distinguished
    members of the committee, thank you very much for your time,
    and I look forward to answering your questions.
        [The prepared statement of Mr. Mosbacher follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mrs. Kim. Thank you, Mr. Mosbacher.
        Now I recognize Ms. Collinson for your opening remarks.

                      STATEMENT OF ERIN COLLINSON

        Ms. Collinson. Thank you, Chairwoman Kim, Ranking Member
    Bera, and distinguished members of the subcommittee. Thank you
    for the opportunity to testify today.
        I'm Erin Collinson, Director of Policy Outreach for the
    Center for Global Development, a nonpartisan think tank based
    here in D.C. The views I share today are my own.
        I want to start by noting as my colleagues here did that
    the BUILD Act establishing the U.S. International Development
    Finance Corporation was an impressive bipartisan achievement.
    Credit to those, including the two witnesses to my left, who
    noted that despite the size and strength of the U.S. private
    sector, the U.S. Government was falling short in deploying
    strategic, efficient development finance and proposed a
    solution.
        In just 5 years, DFC's portfolio has doubled to nearly 50
    billion, reflecting strong demand for its expanded authorities.
    And today, I want to share four recommendations for DFC's
    reauthorization.
        First, reauthorize DFC promptly. I commend this committee
    for starting that process in earnest last year with the
    bipartisan bill and for holding this hearing. Any
    reauthorization should include a multi-year timeframe to
    provide certainty for business planning, a sufficient increase
    to DFC's 60 billion dollar contingent liability cap, and a fix
    to the budget treatment of DFC's direct equity authority.
        But I want to emphasize that timely reauthorization before
    October is critical. As a development finance institution
    structuring multi-year financing deals, DFC requires market
    confidence and operational certainty. Delays could disrupt
    DFC's deal pipeline and harm America's competitive position.
        Second, maintain a strong development focus. While I
    understand there's interest in affording DFC greater
    flexibility when it comes to country income restrictions, DFC's
    investments have the highest likelihood of delivering impact in
    lower-income countries where lack of access to private capital
    represents a binding constraint. In the Indo-Pacific, DFC has,
    for instance, provided direct loans to water operators in
    Cambodia, taken an equity stake in a business-to-business
    healthcare company in Vietnam, and offered portfolio guarantees
    to financial services groups in Laos in support of the U.S.
    government's countering PRC initiative.
        The BUILD Act set out a mission for DFC to advance
    development outcomes and achieve foreign policy objectives.
    These need not be mutually exclusive, but DFC should focus on
    crowding in private capital where it is scarce, not crowding it
    out where it is abundant. Congress should reaffirm DFC's
    development mandate and urge the agency to adopt a higher bar
    for investments in more advanced economies.
        Third, encourage continued transparency and accountability
    improvements. My former CGD colleagues Todd Moss and Ben Leo--
    who were among the early voices calling for a full-service
    development finance institution in the U.S.--once had to with
    the help of an industrious research assistant manually create a
    data base from PDFs to analyze the portfolio of DFC's
    predecessor, OPIC. Thankfully, we've come a long way since
    then.
        DFC now features project-level data in two forms on its
    website. Under the leadership of its first CEO, Adam Boehler,
    they also pioneered the creation of Impact Quotient, a
    framework used to assess the development, impact, and
    prospective projects but also track and measure whether
    projects deliver those expected development outcomes. Congress
    should encourage the merging of DFC's two primary project data
    sets and ensure regular updates and should direct DFC to
    provide disaggregated data on private capital mobilization,
    report more development information about impact at the project
    level, and publish ex-post evaluation results.
        Fourth, remember DFC is part of a broader toolkit. While
    DFC effectively leverages limited resources, there's mounting
    pressure on the agency to work in a variety of sectors,
    regions, and countries. I want to caution against ladening the
    agency with too many directives without a commensurate increase
    in resources and staff.
        DFC has become critical for achieving U.S. objectives
    internationally, but it is not the only channel. I hope this
    committee and its counterparts will take a holistic view and
    consider which tools and instruments the U.S. can deploy to
    operate most strategically in a given setting and look for
    opportunities to strengthen its other tools if they appear to
    fall short.
        Finally, I want to note that while DFC has grown its
    overseas presence, it remains modest. Part of the vision for
    DFC was to leverage the U.S. global footprint, particularly by
    working with USAID mission staff who have often served as DFC's
    boots on the ground. The BUILD Act mandated coordination
    between these agencies, and recent actions to dismantle USAID
    will make DFC's job harder.
        In closing, this committee has a significant opportunity to
    build on a bipartisan win by advancing a timely reauthorization
    that addresses core issues, reinforces DFC's development
    mandate, encourages accountability, recognizes DFC's position
    in a broader development and foreign policy toolkit.
        Thank you again for the opportunity to appear today, and I
    look forward to your questions.
        [The prepared statement of Ms. Collinson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mrs. Kim. Thank you, all the witnesses. I now recognize
    myself for five minutes of questioning.
        The DFC certainly has demonstrated its ability and its
    effectiveness in using our taxpayer money very wisely. As noted
    in my opening statement, in fiscal year 2023 alone, the DFC's
    revenue exceeded costs by 341 million dollars. That is money
    returned to our U.S. Treasury.
        So Mr. Yoho, as you've seen in recent months, we witnessed
    a significant shift in the U.S. approach to international
    development assistance. How can the DFC's model of leveraging
    the private sector to provide a return on investment serve as a
    framework for broader U.S. foreign assistance efforts,
    particularly in helping countries reduce dependence on
    continuing aid?
        Dr. Yoho. Thank you. I think that's the ultimate goal is
    weaning this countries from aid to trade and move that. And the
    DFC can do that with the tools that they have, but only if they
    stay focused on what I call the purity of purpose of what they
    were designed to do.
        When we envisioned this and put this together, we were
    looking at major infrastructure projects that we could partner
    up. And we weren't able to do this with OPIC, the predecessor,
    to partner up with other DFIs from other countries or to bring
    in that private equity. And what they needed, they needed to
    have an investment vehicle that we could come to the table
    first with.
        That's where organizations like MCC or USAID did on their
    grant basis. I know USAID right now is this terrible image, but
    yet there was some good that they did. And we want to make sure
    that we don't lose that because they're often the ones that are
    on the ground, boots on the ground, that invite in that private
    equity.
        I look forward to you guys fixing this soon, and I'm sure
    you will.
        Mrs. Kim. So continuing on that, I want to talk about the
    equity scoring issues and ask a question to you, Mr.----
        Mr. Mosbacher. Mosbacher.
        Mrs. Kim [continuing]. Mosbacher. In Fiscal Year 1923, the
    DFC committed 9.3 billion dollars in new investments. Of that,
    8.8 billion were direct loans that require only 110 million in
    appropriations. Meanwhile, the 500 million dollars equity
    investment required 500 million in appropriations.
        That treatment of equity investments which assumes that
    every dollar of the investment will be lost is out of step with
    the private sector. The DFC needs an equity fix, which we all
    agree on. That would account for this on a net present value
    basis which evaluates future probability of investment returns,
    bringing the equity investments in line with Congress' original
    intent.
        That fully allows the DFC to invest in countries that
    advance the U.S. objective in the long run. So could you talk
    to us about OPIC never having the ability to make equity
    investments, Can you explain to us why the DFC's ability to
    make equity investment is so important and how would this
    ability have changed your approach to OPIC?
        Mr. Mosbacher. Well, yes. I mean, we did not have the
    authority to do equity investments. And it actually cost us in
    terms of many deals. Even going in to private equity funds
    which OPIC did for years as senior secured debt, we were sort
    of the skunk at the party because when you exited those funds,
    OPIC came out first, got its principal back plus interest
    before any of the other investors got a return.
        It was not well received internationally. And many who are
    our allies did not like to be in funds with us. Today, I would
    say equity is even more important than it was back then.
        Equity is so critical, particularly as we look at how we're
    going to counter China on some of the competitive deals and the
    infrastructure of critical minerals. We have to have access to
    equity authority that's treated on a net present value basis.
    The way I've always explained equity is--or the issue of how to
    account for it on a net present value basis is to say it's a
    little bit like a 100-dollar loan at the bank.
        The bank has a loan loss reserve. That loan loss reserve
    gives you some sense of what's the probability that loan is
    going to default or go off the ditch. We could use a small
    portion of funds as subsidy, it's called in this context, to
    cover loans or cover investments that frankly will probably
    turn out to be very productive. But the lack of capacity
    because we have to charge these on a dollar-for-dollar basis is
    a huge impediment to our performing at that level.
        I'd just say one more thing. When Ted and the group put the
    BUILD Act together, we thought it would be with a 60-billion
    dollar contingent--maximum contingent liability, we thought as
    much as 35 percent of that 60 billion could be invested in
    equity. That's in the bill.
        We anticipated it being a huge piece of our toolkit. And
    clearly, it hasn't been. So that's been an unfortunately piece
    of this.
        Mrs. Kim. Thank you. Let me now recognize Ranking Member
    Bera for 5 minutes of questioning.
        Mr. Bera. Thank you, Madam Chairwoman. I've had a chance to
    actually talk to all three of you, and there has been a lot of
    conversation both in the Biden administration but also in the
    Trump administration about creating a sovereign wealth fund.
    And every once in a while, DFC gets conflated with the
    sovereign wealth fund.
        I think there's healthy concern on our side about the
    differences here. And maybe each of you could just quickly
    comment on why you think these should be separate and the
    differences, maybe starting with Ms. Collinson.
        [Disturbance in hearing room.]
        Mrs. Kim. Let's continue with----
        [Disturbance in hearing room.]
        Mrs. Kim. The committee will come to order. Please proceed.
        Mr. Bera. Ms. Collinson.
        Ms. Collinson. Yes, thank you. So my view is that should
    the U.S. move forward with creating a sovereign wealth fund
    that it should be separate and distinct from DFC. While
    sovereign wealth funds can operate with a range of objectives,
    typically profit is a core motive.
        DFC must practice sound financial management and good
    stewardship of taxpayer dollars as the chairwoman noted. That,
    in some cases, means sending profits back to the Treasury. But
    the promise of market competitive returns is not what drives
    investment decisions.
        I also think that just practically between existing
    statutory requirements and strong congressional interest and
    oversight that the effort to retrofit DFC in some way or pursue
    a substantially different model of operation would run into
    real challenges.
        Mr. Bera. Mr. Yoho.
        Dr. Yoho. I like the idea of a sovereign wealth fund. I
    don't like the idea of it being tied into the DFC. I think it
    clouds the mission. I think it gets messy. And I think if you
    want a sovereign wealth fund, create a separate one. Let the
    DFC focus on what it was designed to do.
        Mr. Mosbacher. And I agree with what they said.
        Mr. Bera. Here's another question. I actually don't know
    the answer to this. Are public pension funds--we have some very
    large public pension funds that are looking for investment
    vehicles. Are they able to operate like private equity? Maybe
    Mr. Mosbacher on the DFC.
        Mr. Mosbacher. Yes, so here's the way I think of public
    pension funds, particularly in countries in which the DFC is
    doing business. If we de-risk projects enough so that you
    attract serious private capital to those deals and you start to
    build out infrastructure projects with that kind of
    participation in the private sector. Once those projects are
    operational, then at that point you have a chance to sell a
    package of assets to a pension fund that would be willing to
    take 8 or 9 percent blended return.
        And that's where we should go because that will
    dramatically increase the traffic in terms of projects and
    pipeline and all that sort of thing. And I have that as a hope
    and dream. And I don't think it's too far fetched.
        Mr. Bera. And is that something that we'd have to do
    legislatively? Or do they currently have----
        Mr. Mosbacher. No, all we need to do is encourage the DFC
    and others to be more creative about risk taking.
        Mr. Bera. Mr. Yoho, I think you touched on--and the
    chairwoman touched on a little bit of the OMB scoring and how
    that does get in the way. If you want to expand on that a
    little bit.
        Dr. Yoho. Yes, the equity scoring, it was designed in the
    bill as Mr. Mosbacher brought up. That was at 35 percent that
    they could take an equity stake in. And OMB, I feel, is
    misinterpreting this.
        I think it doesn't need really a legislative fix. It's just
    they need to interpret it the way Congress intended. And I
    think if you do that, if you put the pressure on them, they'll
    have to do it.
        This is an investment vehicle that's going to make this
    country stronger. It's going to make the people we invest in
    stronger. And it falls into that making American safer,
    stronger, more prosperous.
        Mr. Bera. Mr. Mosbacher, you have other vehicles that are
    obviously out there in terms of multilateral development banks
    like the World Bank and so forth. Can you tell us how that
    complements--you touched on it a little bit about how it
    complements working with----
        [Simultaneous speaking.]
        Mr. Mosbacher. Yes. Well, so when you speak of the World
    Bank, I mean, the 800-pound gorilla of private sector lending
    is the IFC, International Finance Corporation. They're sort of
    the IFC and then there's everybody else. But the everybody else
    matters.
        So teaming up like I mentioned with IDB Invest I think
    brings deals in, gives us much better market intelligence,
    allows us to share risks. So we leverage dollars much more
    effectively. And so I think it has all pluses. And I would
    recommend that, not just in terms of Latin America and the
    Caribbean but also Africa, Asia, the Far East.
        Mr. Bera. Great. And again, it does seem like we've got a
    number of tools in our toolkit to compete effectively. We've
    got those tools in our toolkit to work with like valued allies,
    others that share our values. And we don't have to compete with
    competitors like the PRC and the Belt and Road Initiative on
    our own.
        We certainly can do this and develop those markets. So
    again, let's strengthen these institutions, not weaken them.
    And with that, I yield back.
        Mrs. Kim. Thank you. Let me now recognize Chairman
    Emeritus, Chairman McCaul.
        Mr. McCaul. McCaul. Thank you, Madam Chair. Let me say, Mr.
    Mosbacher, great State of Texas.
        Mr. Mosbacher. Yes, sir.
        Mr. McCaul. Appreciate your service and your father as well
    being Secretary of Commerce.
        And Ted, great seeing you again. You are our champion in
    this area. This is your legacy. It's your baby, the BUILD Act,
    the Development Finance Corporation. I know you of all people
    have been very frustrated at the implementation which I would
    argue did not follow Congress' original intent.
        Let me ask you this. As the author of the bill, we
    reauthorized the DFC last Congress. The Senate, of course, did
    not pass it. But as you pointed out, it really just--all it
    needs is an interpretation by OMB to fix this problem.
        The BUILD Act of 2018, 22 U.S.C. Section 9621(d), equity
    investments, it says, a corporation is authorized to make
    equity investments. And then it goes on to say at the end, the
    corporation may not own more than 35 percent of the outstanding
    voting stock or other voting interest of any entity. As the
    author of this bill, what is your interpretation with respect
    to the equity investment provision?
        Dr. Yoho. I think it's crucial. I mean, it really increases
    the leverage that the DFC has. And it also brings in that much
    more of private equity bringing that into that without using
    the way it was designed and really hamstringing this.
        It's not going to reach its full potential if OMB doesn't
    change how they interpret what you just read. I think it's a
    misstep by OMB. And I hope they see the errors of their way and
    really utilize this thing.
        If you think about where it started with, OPIC. That was
    where we kind of built this model from, and Rob was great at
    working with us. They were authorized or appropriated 65
    million dollars. I think it was in 2014. But they returned 265
    million dollars. Take that same concept and put multiple
    factors in there of what we can do. The return to the American
    taxpayers, something that's pretty much self funding, and----
        Mr. McCaul. I continually say, I mean--my time. I think it
    not only is a great return for the American----
        Dr. Yoho. Yes.
        Mr. McCaul [continuing]. taxpayer, but it counters our
    adversaries, particularly China and Belt and Road, which we are
    failing. The DFC was not implemented properly. It went off on--
    just like USAID went off on programs that had nothing to do
    with the core mission, like, drag shows and the like.
        Now because of that black eye, it makes DFC even more
    imperative that it succeed. But I want to get on the record
    here today so that if we have the same problem we did last
    Congress and the Senate doesn't pass this, we do have the fix
    right here from your testimony and that is, was it your intent
    when you authored this bill that the scoring be at the net
    present value?
        Dr. Yoho. Absolutely.
        Mr. McCaul. No question?
        Dr. Yoho. There's no doubt about that. And I don't know if
    Rob or----
        Mr. McCaul. Mr. Mosbacher.
        Mr. Mosbacher. Yes, just to elaborate, it seems like the
    authorizers and appropriators are generally in agreement it
    should be on a net present value basis. But then when we bring
    the budget committee and the CBO and the OMB into the
    conversation, we're at a deadlock. So I would just plead for
    creativity.
        We're not exposing the taxpayers to undo risk. And as you
    indicated, I mean, this is an agency that's been self-
    sustaining for years, has made money for years, partly because
    they've been so conservative on their risk appetite which we're
    asking to loosen it up a little bit. But we need some--we need,
    I think, a meeting of the minds among the jurisdictional folks
    on the Hill.
        Mr. McCaul. And I agree. So Madam Chair, I hope we can pass
    this and I hope the Senate wakes up and--it's vitally
    important. And I think the Senate, SFRC, they recognize this as
    well. Hopefully we can pass it. If not, I think we have the
    answer right here before us.
        Last question, Mr. Mosbacher. I've never understood the
    idea that a country like China can self-designate as a
    developing nation therefore qualifying for low interest or zero
    interest loans. That defies logic and reason. It also allows
    them to fund the Belt and Road Initiative where they then take
    the money and use usurious interest rates on truly developing
    nations. What are your thoughts on that?
        Mr. Mosbacher. Well, my thoughts on that are they probably
    wouldn't be as successful as they've been if there was anybody
    else on the field to contest it. But there's not. So we haven't
    been around. We haven't been on the field.
        I would argue--and I know I sound like a broken record
    here. But I'm a private sector guy. I've spent all my life in
    the energy industry.
        I look at deals and look at what the risk is in that
    country of doing business there. And if it looks too great, I'm
    going somewhere else. So I guess what I'm saying is this agency
    can take more risk and we can find more ways of reducing the
    risk such that you have more private capital and there's an
    alternative to China.
        Mr. McCaul. Thank you. I yield back.
        Mrs. Kim. Thank you. I now recognize Representative Sherman
    for his five minutes of questioning.
        Mr. Sherman. I want to join the ranking member in praising
    USAID. And the shuttering of USAID and its termination of
    foreign assistance projects could very well harm DFC which has
    relied on USAID mission staff to help generate projects. Ms.
    Collinson, does the shuttering of USAID cause a problem?
        Ms. Collinson. Yes. Thanks, Congressman. I think it does.
    Obviously, USAID and DFC share a development mandate broadly.
    But they have a very different model.
        And whereas USAID provides complementary grant assistance
    and historically the largest share of the agency's funding has
    supported humanitarian response and global health services,
    they have really played a critical role where DFC's overseas
    presence has been lacking. And they even set up--help stand up
    DFC's mission transaction unit which has been key to deal
    origination but also sort of helping to monitor and track
    deals.
        Mr. Sherman. There's some people who are even on the
    committee last--when we dealt with USAID who attacked USAID for
    having tourism development projects because they thought USAID
    had to be just food. They didn't realize AID stood for
    development or Agency for International Development which, of
    course, includes tourism.
        I've been involved for at least a couple decades in this
    with Mr. Mosbacher. I wrote the OPIC reauthorization bill in
    2007 which the House passed and the Senate didn't, thus proving
    the wisdom of Nebraska in having a unicameral legislature.
    There were certain provisions we had there that I want to make
    sure that we have this time.
        One of those is a requirement that the private sector
    entities that are substantially involved certify that not only
    they but everyone in their corporate family is abiding by U.S.
    sanctions, particularly those on Iran. Because we had a lot of
    pushback then that said, well, we'll have on subsidiary benefit
    from this program while we'll have a different subsidiary
    violating American sanctions.
        We need to have whichever entity is benefiting from the
    program, whichever private sector entity, certify that none of
    their sister corporations, parent corporations, or subsidiary
    corporations, or nephew corporations are violating our
    sanctions on Iran. Would that pose a problem in making this an
    effective bill, Mr. Mosbacher?
        Mr. Mosbacher. No, sir.
        Mr. Sherman. Good. We also had a provision in there that I
    don't know if it's still relevant, but it wouldn't hurt to put
    it in, to not fund an anti-Armenia railroad defined as a
    railroad that jogs around Armenia connecting Georgia and
    Azerbaijan. We had that, I believe, in the bill or in your
    regulations. Did that cause a problem, Mr. Mosbacher?
        Mr. Mosbacher. Not to my knowledge.
        Mr. Sherman. Good. We also had provisions, I believe, that
    were in current statute dealing with companies not boycotting
    Israel. Was that a problem to carry out?
        Mr. Mosbacher. No, sir.
        Mr. Sherman. And at times, the board has had at least one
    member from organized labor and one member from small business.
    Is that currently applicable and does it cause a problem?
        Mr. Mosbacher. I don't think that's still applicable, but I
    will get an answer for you because there's someone here from
    the agency.
        Mr. Sherman. OK. And back in the day when it was imposed,
    was there a problem?
        Mr. Mosbacher. No, there was not. I worked very well with
    that representative.
        Mr. Sherman. OK. Now there's a lot of talk here about going
    to high-or mid-income countries. I believe Ms. Collinson said
    that. Is there a way to structure the bill so that we give a
    preference to low-income countries or at least low-mid-income
    countries without necessarily prohibiting high-mid-income
    countries?
        Ms. Collinson. Yes, Congressman. And I think actually the
    bill passed last year by this committee sort of helped try to
    strike the right balance. I would probably go a little further
    in terms of some guardrails around high-income investments. But
    it did, in fact.
        Even though it expanded DFC's ability to invest in some
    high-income countries, it also put--allowed it to do--or
    preference low-and lower-income--lower-middle-income countries.
    And I should say I agree with Mr. Mosbacher that the upper-
    middle-income certification as it currently stands is not as
    workable as it needs to be.
        Mr. Sherman. I would ask you to submit some ideas, Mr.
    Mosbacher and Mr. Yoho. Submit ideas on how we can tighten that
    language. And I yield back.
        Mr. McCaul.
        [Presiding.] The gentleman yields. The chair recognizes Mr.
    Barr.
        Mr. Barr. Thank you, Mr. Chairman. And thanks to our
    witnesses today. I appreciate the testimony. As you all know,
    the Belt and Road Initiative since 2013 has invested over a
    trillion dollars across the globe, expanding the reach of the
    Chinese Communist Party's malign investments and debt trapped
    diplomacy.
        I have said on this subcommittee and also in my capacity as
    a member of the select committee on the strategic competition
    with the CCP that as Americans, we shouldn't try to compete
    with China or counter China by becoming more like China.
    Imitating their industrial policy, misallocating capital is
    actually their Achilles heel. And it's exacerbating their own
    debt crisis.
        Our advantage is that we're capitalists. Our advantage is
    that we allocate capital effectively and efficiently. And so
    let me just ask any of you all to comment on whether or not the
    DFC has the proper resources it needs because I think the model
    of attracting private capital and allocating that capital
    effectively is a better way of delivering returns but also
    geopolitical objectives than China's scattershot misallocation
    of resources.
        Am I right about that? Do we counter China better by
    looking at investments that deliver returns? And should we
    avoid bad deals just because China is there? I'll start with
    you, Mr. Mosbacher.
        Mr. Mosbacher. Yes, I would argue that our biggest
    competitive advantage is the fact that we have a free market
    rule of law capitalist approach. They have a State owned
    enterprise autocracy. They don't have to make returns, although
    they like to be repaid for their money. But we have no business
    emulating the Chinese in terms of all investment model or
    structure. So I think we played our strengths which is
    entrepreneurial capitalism.
        Mr. Barr. Ted, good to see you, my former colleague,
    Congressman Yoho. Great work on the BUILD Act. Appreciate it.
    Let me ask you to comment on the equity scoring piece. Do we
    attract more private capital into these deals if we fix the
    equity scoring?
        Dr. Yoho. Absolutely.
        Mr. Barr. How would that attract more private capital to go
    along with DFC?
        Dr. Yoho. Because we can leverage a lot more. The way it is
    right now, it's a dollar for dollar. Giving out a million
    dollars, it's a million dollar loss, as OMB looks at it
    erroneously versus looking return on investment.
        So we're really leveraging that. And that's what the
    private sector is looking for. Plus we bring in de-risking of
    that of a project. And as we do that, that's more attractive to
    the private equity.
        Mr. Barr. I appreciate that, and I appreciate all of the
    witnesses' testimony in support of also expanding the aperture
    of DFC and allowing DFC to move into higher income countries,
    Panama being the great example, Congressman Yoho, that you
    cited. The fact that Panama is ineligible for DFC investment is
    really one of the reasons why China has moved in. And I've been
    to Panama twice, and I've talked to high ranking government
    officials there.
        They want to do business with the United States. They would
    prefer U.S. private capital. And this is the win-win where
    United States could displace China and take back de facto
    control of the canal to the benefit of national security.
        Congressman Yoho, if DFC correctly focused on combating
    national security threats as opposed to just this development
    objective, would that be a better way to counter China in the
    Panama Canal?
        Dr. Yoho. Yes, but it wouldn't just be national security. I
    would look at the whole picture. As you brought up, we're
    capitalist. We bring this to the table. People want to do
    business with people they know, like, and trust.
        You hear it over and over again. It's easy to get money
    from these other countries. But we don't trust them. We don't
    like them. And that's what we bring to the table. And I think
    if we do that, we're going to win just on what we have to
    offer.
        Mr. Barr. Mr. Mosbacher, should DFC play a role in Ukraine?
    How could the DFC help the reconstruction of Ukraine in a way
    that could deter further Russian aggression?
        Mr. Mosbacher. Yes, I think the DFC could be enormously
    valuable in helping support economic rebuilding at all levels.
    I mean, one of the things that the DFC has done and OPIC before
    most effectively for years was to support small-and medium-
    sized businesses. And that's the way you rebuild economies. But
    then----
        Mr. Barr. What would you say to those who say that DFC or
    formerly known as OPIC would support the agenda of the
    globalists?
        Mr. Mosbacher. I think we support our own agenda. I don't
    see--I'm not sure what the globalist agenda is. But my sense is
    particularly on small-or medium-sized businesses but also
    infrastructure. And infrastructure is going to have to be
    rebuilt. But the DFC is as good as anyone in the government at
    knowing how to do this.
        Mr. Barr. Thank you. I yield back.
        Mr. Mosbacher. Could I just add one thing, Mr. Chairman?
    You asked the question, Congressman Barr, about having the DFC
    and private equity funds. The reason that OPIC was able to be
    such an important catalyst for the private equity funds over
    the years where it was in the deal as debt was because once you
    got the U.S. in the deal, it all of a sudden became much more
    attractive to private sector investors. And that's exactly what
    would happen if you have DFC in equity funds.
        Mr. Barr. Thank you.
        Mr. McCaul. The chair recognizes Mr. Amo.
        Mr. Amo. Thank you, Mr. Chairman. As others have mentioned,
    the Development Finance Corporation provides enormous return on
    investment for the American taxpayer. By working with the
    private sector to build development projects, whether it's
    strengthening mineral supply chains in Angola or expanding fish
    farms in Vietnam, the DFC advances the United States' foreign
    policy goals and our economic interests.
        The DFC opens up markets to American businesses, thereby
    reducing the reliance on foreign aid and shifting our
    relationship toward an equal playing field where American
    investment advances American diplomacy. In doing so, it's the
    perfect counter to China's Belt and Road Initiative, a coercive
    financing scheme that pressures countries into accepting
    unfavorable investment terms while forcing them to look the
    other way on China's human rights abuses.
        If we want government that is both efficient and effective,
    then Congress must reauthorize the DFC to extend and expand
    their track record of success. Thankfully, we already have a
    blueprint in hand, the bipartisan DFC Modernization and
    Reauthorization Act of 2024 which passed through our committee
    last Congress. This bill would make reforms to strengthen
    American competitiveness while authorizing the DFC to continue
    its unique role for another 7 years.
        I use that word intentionally because the DFC does play, in
    fact, a unique role. First created in 2019, the DFC
    consolidated the various development finance tools from across
    the Federal Government, including USAID and the Overseas
    Private Investment Corporation to better coordinate our
    development finance work. And while the DFC consults with USAID
    on projects related to foreign assistance, they serve separate
    and distinct roles.
        That raises some alarm on the Trump administration's
    activity to openly float moving some of USAID's work into the
    DFC as they try to unlawfully shut down USAID. So Ms.
    Collinson, could you please explain how USAID and DFC's roles
    are different? How would shutting down USAID while folding some
    of its work into the DFC harm the DFC's core functions?
        Ms. Collinson. Yes, thank you, Congressman. I mean, as I
    mentioned before in my testimony, I think one of the biggest
    deleterious effects of USAID's dismantling for DFC will just be
    not having sort of folks on the ground in missions who can help
    with deal origination in particular. Again, they helped set up
    this mission transaction unit that was really critical in that
    arena. But also, as DFC is trying to do a much better job of
    monitoring and tracking their impact, if there are not USAID
    staff there, they just have much less presence. And DFC's
    presence overseas is quite limited.
        Mr. Amo. Thank you. And as we know, the DFC is a key tool
    in the United States as the United States deploys our support
    to our ally, Ukraine, in their fight for survival against
    Russia's unlawful invasion. Last year, I lead a bipartisan
    letter requesting that the DFC requesting that the DFC scale up
    their work in Ukraine to support the Ukrainian economy and
    business community.
        Ukraine's economy is vital to success in this war. A
    stronger Ukrainian economy benefits the war effort, supports
    Ukraine's capacity for reconstruction, and reduces future
    reliance on foreign aid. I'm glad, especially glad that the
    UFC--the DFC rather, committed to providing over 400 million in
    additional political risk insurance for companies investing in
    Ukraine. Again, Ms. Collinson, how does the DFC political risk
    insurance for private sector investments in countries like
    Ukraine support those countries' economies and encourage
    American companies to invest?
        Ms. Collinson. Yes, maybe I'll start by just noting that
    the political risk insurance tool that DFC had is actually a
    pretty unique one. There's a few other actors that have a
    comparable tool, the multilateral investment guarantee agency
    being one of them. But it's really been shown to be catalytic
    and fragile in conflict affected states in particular. And you
    could imagine just being able to offer and take on at least--
    assume a part of that noncommercial project risk in a setting
    like Ukraine has really been a vital way to grow private
    investors' confidence in the economy and lend both to the
    economy now but also Ukraine's recovery and reconstruction down
    the road.
        Mr. Amo. Thank you. With that, I yield back the rest of my
    time.
        Mrs. Kim. [Presiding.] Thank you. I now recognize our vice
    chair of the committee, Representative Radewagen, for 5
    minutes.
        Mrs. Radewagen. Thank you, Madam Chairwoman, Ranking Member
    Bera.
        [Speaking foreign language.] Good afternoon. Today, we're
    discussing one of the most important programs to counter the
    PRC's Belt and Road Initiative, the Development Finance
    Corporation.
        Congressman Yoho, I too want to echo my thanks to you for
    your leadership in writing this legislation. This hearing comes
    at an apt time for my home district. As I've stated in previous
    hearings, American Samoa is now surrounded on three sides by
    other Pacific Island nations that have signed major deals with
    the PRC.
        America needs to be present and active in the Pacific. If
    we aren't, Americans will be cutoff and isolated from the
    mainland. The DFC is a great tool in our playbook to invest in
    the Pacific's future.
        My question for all three of you, my home, the Pacific
    Islands, we face significant challenges in securing investment
    for essential projects in infrastructure. How can Congress and
    the Administration collaborate to encourage greater risk
    tolerance among private sector companies, enabling them to
    invest in the less secure yet highly impactful areas?
        Mr. Mosbacher. Congresswoman, there are a variety of tools
    that the agency has that can significantly reduce the risk to
    private sector investors. So if you're talking about how do we
    attract investors to areas that are starved for capital, you
    need two things. One, equity, because it's fine to support
    financing our debt, but many of the companies in some of the
    spaces that we're talking about desperately need equity as
    well.
        So equity is one. And two is to reduce, again, the risk of
    a project which you can do by establishing small grant and
    technical assistance or a whole host of things that will
    encourage private sector investment. And that would be my
    suggestions.
        Mrs. Radewagen. Thank you. Congressman?
        Dr. Yoho. I agree with that. And being from where you are,
    you're a long way from anywhere. And so how do you get capital
    there? How do you get people to invest in that?
        The best way is to have the de-risking of it. And you also
    have to have a partner that is credible, somebody that has the
    clout like the U.S. Government with a vehicle like the DFC. But
    can the DFC, can they man it on the ground?
        That's where organizations like the MCC, I'm a big fan of
    that, between 17 countries off of foreign aid. And so working
    with companies or agencies like we have there or that arm of
    USAID that was first on the ground with boots on the ground to
    do those things to carry a project forward, they work hand in
    hand with DFC. And let the DFC go in there with the big guns,
    the big equity, and bring in that private capital.
        Of course, that all ties into, what do you need in your
    country? What is the most vital thing? And it's usually
    infrastructure where it starts.
        Mrs. Radewagen. Ms. Collinson?
        Ms. Collinson. Yes, no, I don't have too much to add. I
    think I agree with both of their points.
        Mrs. Radewagen. Thank you, Madam Chairwoman. I yield back
    the balance of my time.
        Mrs. Kim. Thank you. Let me now recognize Representative
    Olszewski for 5 minutes of questioning.
        Mr. Olszewski. Thank you, Madam Chair and Ranking Member. I
    appreciate all of our witnesses' time today as always. I want
    to dig a little bit into two issues that you both mentioned
    today.
        One is something I support, expanding the amount of
    countries that can be lended to. Our focus include more higher
    earner countries. But as we open up those countries, even if we
    extend preference for the low-middle-income nations, do you
    have any thoughts on how we can operationalize ensuring that we
    actually don't just express a preference but actually ensure
    that we execute on that?
        Ms. Collinson. Yes, I think one of the ideas--and I know
    Mr. Mosbacher and I have some common ground here because we've
    discussed it, including as part of modernizing foreign
    assistance network which we both participate in. But one idea
    would be to think about having sort of a reporting requirement
    from DFC to come to Congress and let them know should the
    balance start to move in a certain direction.
        You maybe put a threshold on high-income investments or
    certain upper-middle-income and high-income investments and
    say, we want to hear from you. Why? It gives a lot of
    flexibility but also sort of puts a check on the system in the
    event that you feel like it's getting too far in one direction
    away from the mandate.
        Mr. Mosbacher. Yes, I mean, so just to build on her
    comment, you can use percentages. So at the end of a fiscal
    year, I think last year, they did 181 projects. If more than--I
    mean, if less than two-thirds of those projects were in low-and
    lower-middle-income countries, then you could require that they
    come before a committee like this and explain why is it your
    not focusing as much on the low end.
        Same thing could go for high-income countries. My personal
    view is--and you all did this last year in 8926--I would
    eliminate the focus on just the European group of countries and
    make it much broader but say no more than 10 percent of all the
    projects done in a given Fiscal Year can be in high-income
    countries. And if they are, then you have to come explain it to
    Congress.
        Mr. Olszewski. That's helpful as we consider
    reauthorization which I think I'll just join the chorus of
    bipartisan support for here. I also wanted to just pick up a
    little bit on the conversation around USAID and actually turn a
    little bit to workforce at DFC itself. I know that in fiscal
    1925, there was a goal to expand the U.S. workforce up to 700
    staff.
        Obviously, we've seen lots of conversation around D.C.
    these days about reducing staff size. So as we're talking about
    providing higher borrowing limits, that we're talking about
    allowing markets to go into more countries, as we think about
    reauthorization in the context of what we've already talked
    about at USAID and what's happening with staff generally in the
    U.S. Government, what should this committee be thinking about,
    just sort of account for those limitations? Or is that any
    reason to be concerned as we do that work?
        Ms. Collinson. Yes, Congressman, I think that's a great
    question. And I would just start by noting that sort of OPIC,
    DFC's predecessor, really ran lean in terms of staff and
    portfolio exposure. And so DFC has really had to take an active
    role in staffing up as it was growing its portfolio.
        And as you noted, it was quite successful over time. But it
    took quite a while to get to this 700 or near 700 number. And a
    lot of those roles that they're hiring for are not the typical
    federal workforce position.
        So something like underwriting capacity, you can make quite
    a bit of money in the private sector doing that. And so being
    able to recruit those people and the right people to do this
    work takes time. And I think it's really that important to
    ensure that the folks that they have hired and that they have
    the ability to continue to hire if we want to have the kind of
    ambition for growth at the agency.
        Dr. Yoho. I agree with that. You've got to have the boots
    on the ground to be able to start a project. And with your
    previous question, you don't forget the low-income countries.
        You expand your portfolio, and that's the whole purpose of
    raising the maximum contingency liability because that way you
    can focus developing countries moving from aid to trade. Then
    you have your other countries that you say, well, strategically
    from a geopolitical standpoint, this is where we should be
    investing, whether it's critical minerals or whatever. But I
    agree with what she says, and it's imperative we have the boots
    on the ground.
        Mr. Mosbacher. Yes, and I would just add particularly if
    you're going to focus more on infrastructure and critical
    minerals as a priority, those deals are very labor intensive
    for lawyers. And I know that makes a lot of people nervous, but
    that's fact.
        Mr. Olszewski. Thank you, all. I yield back.
        Mrs. Kim. Thank you. Let me now recognize Representative
    Sheri Biggs for 5 minutes of questioning.
        Mrs. Biggs. Thank you, Madam Chairwoman. And thank you to
    the witnesses for participating today. As President Trump has
    sought to refocus America's influence in the foreign policy
    sphere, the Development Finance Corporation has taken on new
    importance as the primary vehicle for America to demonstrate
    soft power abroad by providing valuable resources and support
    to combat the People's Republic of China's influence.
        Through alternative financing for critical infrastructure
    and development projects, the DFC empowers our allies and
    partners with the means to achieve self-determined economic
    growth while shielding them from the predatory debt and
    coercive influence inherent in the PRC's Belt and Road
    Initiative. So in a testament to fiscal responsibility, the
    agency generates significant returns operating profitability
    with a net income surpassing 500 million dollars across fiscal
    years 1923 and 1924. It is clear that the DFC is an effective
    and value-driven alternative to PRC investment.
        However, the DFC's current operational framework presents
    certain limitations. The legislation that governs the agency
    prioritizes investments in low-income countries with
    restrictions on the ability to operate an upper-middle-income
    and especially high-income nations. While this focus is
    valuable, it creates practical challenges when engaging with
    strategically significant countries like Panama, Indonesia,
    Vietnam, and Brazil.
        With that being said, I would like to direct my first
    question to Dr. Yoho. Good to see you today. In your
    experiences, what are the key areas where DFC supported
    projects are in high demand within middle-income countries?
        Dr. Yoho. You know, if you look at the different countries
    around where we're invested, the majority are in the lower to
    middle-income countries. Where we're restricted is, like, in
    Panama. We can't go into Chile. We can't go into Costa Rica.
        You look at the geopolitical areas that we can't go into.
    We should be able to go into, like, New Zealand, some of the
    other nations in Europe that we could go into that would really
    bolster our national security. And I don't want to go across
    this too much.
        I don't want to compete against China. I think we can
    outperform them by the product and our values. And if we invest
    in these, those countries will be included in that, those
    middle--lower and middle income. I hope that answers your
    question----
        Mrs. Biggs. It does.
        Dr. Yoho [continuing]. or got close.
        Mrs. Biggs. But I do have a little second part to that. So
    what do you feel that are the potential benefits of increased
    DFC involvement in these nations? You kind of answered that,
    but----
        Dr. Yoho. I think the biggest thing is the work that we can
    do to change the dynamics in a lower-income country. We're
    moving them from aid to trade. That was something that was one
    of the impetuses behind the DFC. How do we get countries from
    that?
        Then we built on models from OPIC and MCC. But then we look
    at where can we strategically invest that will counter somebody
    that's wanting to gain influence in our hemisphere. And I think
    that's so important that we use this strategically but also on
    the other side raising countries out of that economic disaster
    that they sometimes have.
        Mrs. Biggs. Great. Thank you. And just one more quick
    questions for Mr. Mosbacher. A critical component of our
    strategic competition involves energy security. How do you
    propose we ensure that the DFC can effectively support high
    impact energy projects in strategically important middle-income
    and high-income nations?
        Mr. Mosbacher. Well, I think energy is an essential
    component of any economic progress. So I believe we need to be
    as flexible as possible in honoring the fuel source that the
    host country has that it may want to use, even though that fuel
    source may not be to someone's liking. But I'm a big believer
    in a wide open, sort of all of the above type approach. And the
    DFC should be available to try and help countries implement
    legitimate energy deals that will advance the economic growth
    of the country.
        Mrs. Biggs. Great. Thank you so much, and I yield back.
        Mrs. Kim. Thank you. I now recognize Representative Ryan
    Mackenzie for 5 minutes of questioning.
        Mr. Mackenzie. Well, thank you, Madam Chair, and thank you
    to all of our panelists. I don't know if I could've asked for a
    better segue into my question than the latest comment from Mr.
    Mosbacher.
        I want to particularly focus on DFC and its investment in
    energy because as was mentioned, such a critical component to
    developing countries around the world. And we see the increased
    demand for energy in so many areas of our lives. And so what I
    see, though, when I look at DFC and the list of projects is a
    concerning focus solely on climate focused solar, low carbon
    transition, green loans, climate mitigation.
        These are all a grab bag of buzz words that are listed in
    all of the projects on DFC's website. What is absent from that
    is any investment in fossil fuels. And I have heard from
    developing countries, I had an ambassador to a developing
    country in my office just the other day who said that he is
    seeking out and has been unable to get so far but is still
    seeking for an American investment into natural gas in his
    country because they have a depositor reserve of that.
        He feels like that would be the best thing to help develop
    their country and move them forward economically and with
    energy reliability. So when I look at the DFC's website,
    though, my concern only gets worse when I look at the criteria
    that is laid out from 2024--April 2024, the environmental and
    social policy and procedures. And the reason that's so
    concerning is because it seems like it is projecting an
    unnecessary screening on the types of investments the DFC is
    even going to receive in applications let alone what they
    ultimately determine is the criteria that they're going to use
    to select those projects.
        But that messaging and that criteria alone that is laid out
    there, you're going to stop people from even coming to DFC with
    these potential types of projects. So what I would like to
    raise as a question is in a time where we are seeing the
    markets and investors moving away from ESG toward purely
    profitability and also other criteria that they want to set on
    their own deals, I would like to hear from each of you what
    your thoughts are on that policy and procedure in DFC and what
    we should do about it going forward.
        Mr. Mosbacher. Well, let me start by saying that when I
    said each country should have the right to choose what type of
    fuel source they use, I was suggesting that if a country is
    sitting on top of a bunch of natural gas, they ought to have
    every right to try and build a natural gas fired power plant.
    But I don't think the DFC is automatically opposed to that. I
    think, in fact, each administration has priorities. The last
    administration had prioritization of renewable energy sources.
        This administration can move toward a more balanced
    approach and I would recommend that. In terms of the comments
    you made about standards, I agree we can overdo it. I do think
    sometimes some of the standards we have probably run some
    companies off.
        But I also believe we have to find the right balance. In
    other words, if we go in and make a mess of a country because
    we've not abided by just reasonably balanced approaches in
    terms of the environment or impact on the people that may be
    displaced by a project, then we're sort of cutting off our nose
    to spite our face. We're undermining our effectiveness. So I
    think you need a balance in there. And in terms of energy
    source, I'd be for mostly whatever they want in their country.
        Dr. Yoho. Along that--I agree with that. But I think when
    you're looking at the DFC to go into a country, you're looking
    to build an economy in developing countries. The primary thing
    they need is infrastructure. The primary infrastructure is
    energy.
        You can't build manufacturing or any of that unless you
    have a reliable baseline energy. And you're not going to get it
    on solar and wind. They can augment it and supplement it. But
    you need to go and meet the resources within that country. Help
    them develop it responsibly. And so I think that's what we
    should focus on.
        Ms. Collinson. Yes, I mean, I would certainly hope that DFC
    doesn't rule out renewable energy where those are a good
    source. I will say I agree that I think where lack of energy
    access is a real challenge where there are places of energy
    poverty in low- and lower middle-income countries. They need
    energy to be able to run an economy. And so we shouldn't be
    ruling out natural gas, particularly when that's a fuel source
    we use regularly at home.
        Mr. Mackenzie. Great. Well, thank you and I appreciate Mr.
    Mosbacher's comment, particularly around the balance. And I
    think that is something that we can achieve, both environmental
    responsibility and stewardship but at the same time developing
    those energy sources that are reliable, affordable for these
    developing countries. So I think we need to bring back that
    balance, and I'm concerned that this policy and procedure in
    place puts too much of a focus and an emphasis on a certain
    category. So I would like to see that broadened as we move
    forward in discussing DFC and what we can do to make it even
    better than it already is. Thank you, and I yield back.
        Mrs. Kim. Thank you. Let me now recognize Representative
    Schneider.
        Mr. Schneider. Thank you. I want to thank Chairwoman Kim
    and Ranking Member Bera for holding this important hearing on
    reauthorizing the U.S. International Development Finance
    Corporation. Let me take a special privilege, Congressman Yoho.
        It is so good to see you. We miss you on this side of the
    dais. But you look more relaxed and calm on that side of the
    dais. And thank you for your leadership on this project.
        The DFC was created by the bipartisan BUILD Act, two
    parties working together. I think it represents one of our
    Nation's strongest tools to bolster international development
    while also advancing American strategic interest abroad.
    China's Belt and Road Initiative expands its own global
    footprint.
        Mr. Yoho indicated that over the last 10 years, 12 years,
    they've invested more than a trillion dollars in contrast to
    the U.S., a fraction of that at 70 billion dollars. DFC has to
    provide a compelling alternative to China. It has to be one
    that upholds transparency, respects environmental standards,
    and reinforces good governance. And it has to be one that
    advances U.S. interests.
        One area that I'm particularly interested in, the Abraham
    Fund, announced following the history Abraham Accords between
    Israel, UAE, and the United States. It was designed precisely
    for these purposes, to enhance regional economic cooperation,
    support peace, and present a tangible alternative to
    authoritarian investments. Unfortunately, as of today,
    questions remain about the Abraham Fund's operational clarity
    and the commitment of the current administration to fully
    realize its potential.
        For the DFC to succeed, especially in strategic initiatives
    like the Abraham Fund which has broad range of implications,
    timely reauthorization as was recommended earlier, increased
    flexibility in equity investment scoring, and greater risk
    appetite are all essential. Equally important is ensuring
    transparency and effective oversight to reinforce confidence
    among our private sector partners. I look forward to exploring
    how Congress can ensure DFC remains an effective tool for
    development and strategic competition, particularly is
    strategically vital regions.
        But I'd like to again focus on the Abraham Fund. If I can
    ask the witnesses, do any of you have a sense of the current
    status of the fund and have applications for project stalled?
    If so, any sense why? Looking behind that, I'll ask you,
    Congressman Yoho, because we worked together on so many things.
    How important is having this soft power of a program like the
    DFC to promote not just American interest but American
    relationships around the world, specifically in the context of
    China's efforts to expand and increase its influence around the
    world?
        Dr. Yoho. It's vital. It's vital. If we're not at the
    table, somebody is going to fill that void. We've got to be
    there. People have to know we're reliable, we're trustworthy.
        We're going to be there not just for the now but for 50
    years from now. And I think if we fund this, if it goes
    through, a rapid reauthorization, and enhance what the House
    did last Congress, build on what you did, that sends a strong
    signal. The worst thing you can do is pull back, and you know
    nature abhors a vacuum.
        Somebody is going to fill that vacuum. Somebody is going to
    fill it with their ideology. So you want it to be Western
    ideology, liberal democracies. Or do you want it to be
    authoritarian? That's the choice that we have to offer.
        Mr. Schneider. And Ms. Collinson, you in your
    recommendations I think gave wise counsel to us. Remember that
    DFC is part of the broader U.S. development and foreign policy
    toolkit. The current administration has basically wiped out aid
    completely and celebrated that. Can you touch on if we don't
    have that in our toolkit, what is left for us and what are the
    implications of that?
        Ms. Collinson. Yes, no, again, I would echo I think that
    USAID's dismantling is a real problem for DFC and particularly
    when it comes to deal origination and tracking, the impact that
    it can deliver on the ground. I do hope that DFC will be able
    to work increasingly with the State Department, also with the
    Millennium Challenge Corporation which they set up their own
    platform for collaboration precisely to try to do that in the
    places where MCC invests. And I think it'll be really important
    as Mr. Mosbacher pointed out to work with a lot of DFIs to try
    to share intel and develop deals collaboratively if we don't
    have the kind of presence on the ground that we expected.
        Mr. Schneider. Thank you. And I'll use my last 10 seconds
    just to make a statement because whether we like or not, if the
    United States turns its back on the rest of the world, the rest
    of the world is not going to throw up its hands and stand
    still. They'll proceed forward and China will lead the way.
        They will lead it for their interest of China as you said,
    Mr. Yoho. We need to engage with the rest of the world. And the
    United States created the American century in the last century
    because of our engagement, things like the Marshall Plan and
    other work.
        We can do things no other nation is able to do because of
    who we are, because of our values, because of our philosophies
    and our systems. And to turn away from that I think is a grave
    mistake. I hope we can turn the other way. I yield back.
        Mrs. Kim. Thank you very much. I would like to recognize
    Representative Zinke for your 5 minutes of questioning.
        Mr. Zinke. Well, thank you for coming. So a couple things,
    one, I agree with flexibility. I agree with equity. I'm not
    sure percentage I would agree with you on. I think it should be
    aligned with the policy of the United States with executive and
    the Congress. So it is that from where our policy is driven and
    should be driven.
        So a couple things, USAID has come up a lot. And of course,
    USAID has gone through a lot of scrutiny as it should. But when
    you have transgender medical clinics in India or condoms for
    Taliban, we can go through the list after list after list after
    list.
        So some of it then is spread to you because you have a
    relationship with them. So on your loans, do you have a single
    data base? Because when I was in Interior, I went in and I
    canceled every loan until I could figure out where they're
    going. It took us a while.
        And we're seeing the same thing with USAID, canceling it.
    So you haven't been in the papers lately. Do you have a data
    base of where your loans are, your outstanding loans?
        Mr. Mosbacher. Yes.
        Mr. Zinke. Is that data base accessible to the United
    States Congress?
        Mr. Mosbacher. It should be. I believe that there are some
    platforms like the FATAA.
        Ms. Collinson. Yes, so technically, DFC is, I believe,
    required to report to the foreignassistance.gov dashboard under
    FATAA, the Foreign Aid Transparency and Accountability Act,
    which BUILD Act extended its purview to. Right now, it's just
    reporting grant and technical assistance on that dashboard
    because there's been some--but there is----
        Mr. Zinke. And I've heard this from multiple. It's amazing.
    The Department of State does not have a list, one that's a data
    base that you can query on loans, on grants. And if you have
    one, I would love to see it.
        And what fidelity because a lot of things are just titles.
    And whether you love or hate them, DOGE, what it has done is
    open up files that when you and I are in Congress, we couldn't
    access. When I was a Secretary, I couldn't access the files.
    Evidently, just a few can. And we're trying to run ahead if
    there's files out there, I would like you to share them----
        Ms. Collinson. So maybe, Congressman----
        Mr. Zinke [continuing]. so we can see and defend.
        Ms. Collinson. Sorry, just to clarify. DFC does post. It
    has two data bases actually on its website that have project
    level data. Now they're a little bit lagged, so we're missing
    the most recent data. But you can query and search.
        One of them has more fields than others. You get greater
    granularity. But I think those are both areas where Congress
    should push the DFC for even greater transparency.
        Mr. Zinke. And perhaps we don't want to make every loan a
    billboard for debate, right? Because we give you the authority,
    and we should for you to make a deal, as long as it's in line
    with U.S. policy. I agree with that. But I think the chairs and
    the ranking member should have access to see it. I think that's
    fair and prudent. I'd like to see that.
        Last, up close, the five meter target, we could go to a
    government shutdown. So what does that do you? I just want to
    know. A government shutdown, how does that affect your mission
    if we go to a government shutdown? Sir?
        Dr. Yoho. Well, I don't work for them----
        [Simultaneous speaking.]
        Mr. Zinke. No, I know. What do you think it would do?
        Dr. Yoho. It'll do like any other government shutdown. You
    press a reset button and everything has got to start all over.
    All those contracts that were negotiated, if the government
    shuts down, they have to renegotiate all those contracts. It's
    a waste of money, and let's hope we don't do that.
        And as far as the oversight, all those loans are on a book
    somewhere and the Inspector General. And they have a board of
    people that approve these things. It's up to Congress when you
    get the Inspector General report to hold them accountable.
        We always talked about transparency and accountability up
    here. It's happened under this administration. And if you don't
    like what they did, shame on us because we didn't act. It's
    happened. We can't change it. Let's move forward and make it
    better.
        [Simultaneous speaking.]
        Mr. Mosbacher. Congressman, if I could just add to that.
    Businesses have every right to--understand there needs to be
    some certainty and predictability about contracts they have. To
    the extent that we have a stop and start funding system in our
    government that impacts private sector partners of our
    government, it damages our capacity to attract new business.
        Mr. Zinke. I agree. I'm hoping we're not at that point. And
    with that, I wish you a lot of luck. I know you have a lot of
    influence on there. And for the record, I do agree with the
    program. But it needs greater scrutiny like anything else.
        We can justify taxpayer dollars when we know about them.
    And we should have that debate whether we should or shouldn't.
    But we never should have to debate with fraud, abuse, and
    waste. And that we should all stand firm on. And with that, I
    yield back.
        Mrs. Kim. Thank you, Representative Zinke. And with respect
    to your question about transparency, if you go on the dfc.gov
    website, you will see the list of countries where DFC is
    funding projects. If you click on each country, it will also
    give you a whole list of the programs that are already being
    funded. I think that would be a helpful tool.
        We have a lot of discussion here, but one thing is for
    sure, despite its short life-span, the DFC has really emerged
    as a key U.S. national interest and security tool. With this
    commitment to making America stronger and more competitive
    leader and partner on the world stage, I think we have a
    tremendous opportunity to improve and strengthen its operations
    and how DFC's impact is felt around the world.
        The CCP as we know is funding critical infrastructure
    projects and signing security pacts across East Asia and the
    Pacific region and throughout the world. But we know the U.S.
    remains the economic and security partner of choice. With that,
    we must provide our partner nations and allies with an
    alternative to exploitative state-led initiatives.
        This is not something the U.S. Government can do alone. We
    need partners. We need to also incentivize and mobilize our
    U.S. private sector to unleash economic opportunities and
    investments abroad.
        I look forward to working with all of you as we go through
    this reauthorization process. We'll engage in further
    discussions to make it even stronger and tighter and make DFC
    the best security tool that we need.
        I want to thank the witnesses for your valuable testimony
    and answering all of our questions. I also want to thank the
    members who have participated.
        The members of the subcommittee may have some additional
    questions for the witnesses, we'll ask you to respond to those
    in writing. Pursuant to committee rules, all members may have 5
    days to submit statements, questions, and extraneous materials
    for the record subject to the length limitations.
        Without objection, the committee now stands adjourned.
        [Whereupon, at 3:48 p.m., the committee was adjourned.]

                                    APPENDIX

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                   Material Submitted for the Hearing Record

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