[Congressional Record Volume 161, Number 60 (Thursday, April 23, 2015)]
[House]
[Pages H2453-H2456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STOP THE EXPORT-IMPORT BANK
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 2015, the gentleman from Colorado (Mr. Buck) is recognized
for 60 minutes as the designee of the majority leader.
Mr. BUCK. Mr. Speaker, I yield to the gentleman from Ohio (Mr.
Jordan).
Mr. JORDAN. I thank the gentleman for this Special Order on an
important subject, the Export-Import Bank. I was just going to start
with retelling a story I told at an event not too long ago that I think
is important.
The scenario that is going to play out, I think, all across the
country later this afternoon, there is going to be a guy who works
second shift at the local manufacturing facility. He is going to go
out, get in his truck to drive to work.
Now, remember, he is working second shift, which means he has got to
miss some of his kids' Little League games, miss some of his children's
afterschool activities.
He goes out to get in his truck to go to work, and he looks a couple
of houses down, and he sees a guy sitting on the front porch, drinking
a cup of coffee, reading the newspaper. He knows the guy can work, but
won't work, and is getting his tax dollars.
He gets in his truck to drive to work, and he happens to turn the
radio on. It happens to be the news hour. A reporter comes on and talks
about the Federal Government's got an $18 trillion national debt.
They have got this program that gives money to favored and connected
corporations. One of these companies went bankrupt and cost the
taxpayers a ton of money.
He hears all that, and he remembers what he saw on the front porch of
his neighbor's house. Guess what, this guy is ticked off, and he has
every right to be.
At the same time he is driving to work, there is a lady driving home
from work. She teaches second grade at the local elementary school, and
she has busted her tail all day long helping her students.
She views her job as a teacher as a mission field, trying to help her
students get the skill set they need to start on their path to
achieving the American Dream. She has worked hard all day long.
She is driving home, happens to have her radio on, happens to be
tuned in to the same station where the same reporter comes on and talks
about the Federal Government with an $18 trillion national debt, this
program that gives money to favored corporations, connected
corporations. This one company went bankrupt, cost the taxpayers
millions of dollars.
She hears all that as she pulls into her driveway on the same street,
sees the same guy sitting on his front porch, drinking coffee, reading
the paper. She knows he can work but won't work, and he is getting her
tax dollars. Guess what, she is just as mad as the second-shift worker,
and she has every right to be.
Now, our job, as Members of Congress, is to remember people like the
second-grade teacher and the second-shift worker and fight for things
they care about. Here is one: they care about this concept that goes on
in this town, where connected companies get special deals with their
tax money, and they want that to stop.
We now have a chance to do that, to start the process of stopping the
corporate welfare, and that is what Mr. Buck's Special Order hour is
all about, stopping the Export-Import Bank from continuing the
corporate connectedness, the corporate cronyism, and the corporate
welfare.
[[Page H2454]]
Our job is real simple. All we have to do is nothing, something
Congress is usually pretty good at doing. All we have to do is not
reauthorize this Bank, which loans out billions of taxpayer dollars,
puts billions of taxpayer dollars at risk, and helps connected
corporate entities who got every lobbyist in this town hired to fight
for their cause, at the expense of second-grade teachers and second-
shift workers.
Let's not reauthorize this thing. Let's show those people we are
actually fighting for them. Then once we do that, then we can actually
also get into the social safety net, reform that, require work for
able-bodied adults, treat taxpayers with respect, help people trapped
in our social safety net system get to a better life.
We can reform it all, but let's start with those connected companies
with the high-paid lobbyists getting the special deals.
One other thing I will add before turning it back over to the
gentleman from Colorado, who is doing such a great job on this issue,
and my good friend from Virginia, who is going to speak as well on this
issue and doing a great job, this thing is not only bad because it
loans out money, puts taxpayer money at risk, it is corrupt.
Just last week, Mr. Gutierrez, a long-term employee at the Ex-Im
Bank, was indicted on bribery and fraud charges, bribery and fraud
charges that go clear back to 2006.
For 7 years, he was scamming people, taking taxpayer money, helping
himself, taking bribes from companies benefiting from the Export-Import
Bank.
Last week, at the first hearing we have had on this issue this
Congress, we had the inspector general at the Export-Import Bank say
this--and I will close here. He said there may be more indictments in
the Gutierrez case. More importantly, he said there may be indictments
in the 31--that is right--31 open fraud investigations that the Ex-Im
Bank and the Department of Justice are currently investigating.
Now, if that is not enough reason to get rid of this thing, I don't
know what is. It puts taxpayer money at risk--corruption, fraud, 31
open fraud investigation cases. Everyone knows it is bad.
All Congress has to do to end it is not a darn thing. For goodness
sake, maybe even Congress can accomplish that.
Mr. BUCK. I thank the gentleman from Ohio, and I yield to the
gentleman from Virginia (Mr. Brat).
Mr. BRAT. Mr. Speaker, it is an honor to follow my fellow Congressman
from the great State of Ohio and follow our leader, Ken Buck.
I am an economist who has been working on international trade policy
and economics for more than two decades. I support free trade and equal
treatment under the law. I oppose special privileges.
Everyone likes free money, and that gets to the crux of this issue,
and I want to go real slowly over this issue because everyone knows
there is no such thing as free money or a free lunch. Every economics
student learns that in their first course in economics.
Let's just be real clear on that one point and take our time. If you
get free money, right, if a corporation gets free money or you get free
money, that is good for you, and you are going to hear a lot of people
up here saying: Hey, this hurts business, this hurts my company because
I am getting free money.
The flip side of that free money is someone is paying the tab for
that. Guess who that is, that is you. That is the public. That is the
taxpayer. You are footing the bill for this free money that falls out
of heaven up here, working through special interests and corporate
cronies.
{time} 1330
The Export-Import Bank provides cheap, below-market credit to certain
exporters. ``Below market,'' that means the market system is not
working, and something has jumped in to distort free markets. Below
market is just a fancy way of saying ``disguised subsidies.''
Subsidized exporters and their foreign customers like the goodies.
For example, Boeing and its airline customers in the United Arab
Emirates, India, South Korea, Chile, China, Ethiopia, and Turkey, among
others, appreciate U.S. taxpayers helping to subsidize their planes, or
any other good you want to name.
So at first, the Export-Import Bank just looks like a bank that is
helping our firms export. But then go and look at the size and the
bottom line of the foreign firms who are offering these products more
cheaply to their customers, the folks we export to. That is the issue.
Banks in this country also like this program since they get lighter
regulation on U.S. Government-backed loans and related products. That
is a good thing. But, again, the backstop is you, the taxpayer. If this
system ever fails--and we have just seen failure of a massive order
with the financial crisis of 2008. And who paid the bill at the end of
that failure? The taxpayer. You are the backstop for any failure.
Whenever you hear someone say, Hey, I am getting low interest rates--
what a great deal. The low interest rates are being paid for by you;
and the risk, which is just as important and is easy to hide, is also
being borne by you, the taxpayer.
So the Export-Import Bank does not advance the public interest.
Export-Import imposes real costs on you, the American consumer,
taxpayers, and other businesses through risk, market distortions, and
misallocation of resources.
Let me bring a little economics into this. Export subsidies don't--do
not--increase net exports, and there is plenty of economic literature
to support this claim. Sure, subsidized exports increase. Of course
they do. But unsubsidized exports--the folks without the deal--drop,
and imports increase in response. So someone is getting a benefit, but
there is always someone else that is not receiving the benefit, that is
being harmed by this free money out of heaven.
As the Government Accountability Office noted in a study on Ex-Im's
jobs claims: ``Additional exports may result in jobs shifting from one
firm to another, without an increase in total employment.''
Let me read that again. The study claims: ``Additional exports may
result in jobs''--that is what we care about up here--``jobs shifting
from one firm''--who loses them--``to another''--who has the free
money--but ``without an increase in total employment.''
I think that is what Americans care about. I think you care about
increasing total employment, and this program does not accomplish that
goal.
What is true for employment is also true for production in general
and for net exports, which are all part of our GDP.
These economic outcomes are driven by major macroeconomic factors.
These are the things we should care about. These are the things that
really do improve our economy: worker productivity, United States
capital stock, our business climate, and how much we save or borrow.
Those are the fundamentals that we need to improve if we want to do
better in the rest of the world. And we should also include the United
States education system in the mix as well. The Export-Import Bank
doesn't change any of these fundamental market drivers. It just
benefits some at the expense of the rest of us.
America is supposed to embody free enterprise and equal opportunity
for all people--equal opportunity. ``Equal'' means equal, no special
deals for anyone. Getting ahead shouldn't require having friends in
Washington, D.C.
Besides, how can we address the entitlement crisis and the legitimate
welfare issues we have on the domestic front, as the gentleman from
Ohio, Jim Jordan, just noted, and other domestic reforms if we can't
even tackle a narrow corporate welfare program?
I will just close by drawing another comparison with the great
financial crisis we had in '07-'08. Fannie and Freddie had a network
across 50 States. It was almost a shadow Congress of power that even
Members of Congress didn't want to go up against because they were so
powerful.
And what happened as Fannie and Freddie helped to generate mortgages
to people who could not pay their mortgages; right? Subsidized rates--
is it sounding familiar? Subsidized rates to folks who didn't have
incomes, liar loans, and utter financial collapse starting in the
housing sector, spreading over to the financial sector, all too good to
be true, all free money falling from heaven, just like I am describing
here with the Export-Import Bank.
[[Page H2455]]
And at the end of the day, who paid the bill? You did, the American
taxpayer.
So the Export-Import Bank is building the same infrastructure
throughout the country. They are going State by State by State, Member
by Member by Member, saying: Hey, you have companies who really need
this special deal. They like the deal.
We have shown, I have shown: it is good for them, but it is not good
for you.
These special interest subsidies need to end, starting with the end
of the Export-Import Bank.
Mr. BUCK. I thank the gentleman from Virginia.
I yield to the gentleman from West Virginia.
Mr. MOONEY of West Virginia. I thank the gentleman from Colorado for
the opportunity to rise and speak on this important issue.
Mr. Speaker, I have some serious concerns about the future of the
Export-Import Bank, particularly with this administration.
In the past, the Bank has been used to push extreme environmental
policies from the President to guide how it awards their loans. We all
know that the President has declared a war on coal; and through his
administration, he is doing everything he can to prosecute that war on
coal. We have seen the EPA and other departments in this
administration, through regulation--not through Congress, but through
regulation--attempt to shut down the coal industry and bankrupt the
coal industry. The President, himself, said his goal was to bankrupt
the coal industry. This, of course, along with the Export-Import Bank,
is hurting coal companies and costing American jobs as they try to
compete in the global market.
I know that American coal has been hurt because the Export-Import
Bank has awarded loans in countries that do not have to adhere to
President Obama's leftwing environmental regulations. They don't have
an EPA in many of these countries, yet we are financing deals there.
Our current President has proven time and again he will use any means
necessary to circumvent Congress and the Constitution to promote an
agenda the American people just don't want.
So let me give you some specifics on the Export-Import Bank and some
of their investments:
For example, in 2013, the Export-Import Bank approved a loan in the
amount of $694 million in financing for U.S. equipment to develop an
open-pit iron ore mine in Australia. The mine is owned by the
wealthiest woman in the country of Australia. Do you really think she
needs U.S. tax dollar support for this project?
According to public officials, unions, and the Iron Mining
Association, these subsidies threaten to displace nearly $600 million
worth of U.S. iron ore exports and cause a reduction of approximately
$1.2 billion in U.S. domestic sales.
The Wall Street Journal recently highlighted a $641 million deal the
Export-Import Bank made with a Turkish company to build a new fuel-
producing plant. According to the CEO of Valero, a company that exports
American diesel and gasoline to foreign countries, ``The new Turkish
refinery will be a direct competitor of U.S. refineries in the global
market.'' ``It takes away potential export markets.''
Valero, I might mention, has operations in my district, in my State,
and in many other States throughout the country.
Lastly, according to The Heritage Foundation, the Export-Import Bank
made a $500 million deal with a copper mine in Mongolia that competes
with excavations in Arizona, Utah, New Mexico, Nevada, and Montana.
The American people elect Congress to write the laws and make the
laws, not the President. The President is the executive branch. He
needs to figure this out. The executive branch enforces laws. They
don't make the laws. That is what we do here in the legislative branch.
The American people gave Republicans majorities in both Chambers to put
a stop to the President's radical agenda.
One other concern I would like to point out is I don't believe the
government should be in the business of picking the winners and the
losers. Private investors, you, when you choose to shop, individuals,
can pick who you want to support.
We have a vibrant and highly functioning private banking system. We
should let them determine which loans are made to which companies. When
the Federal Government inserts itself into the process, you end up with
a system where Washington special interests drive decisionmaking, not
free market principles. The Export-Import Bank has become the
competitor to this private capital and investment.
And I am a conservative. I believe I support Federal policies that
encourage free enterprise and entrepreneurship, not to enter the arena
as a competitor to the private sector. The Federal Government should
not be in the business of picking winners and losers. Let's let the
marketplace decide who wins and loses. This is the way free markets are
supposed to work.
What has made America great are the traditional values, hard work,
and free markets. The ability to create jobs in this country, that is
what has made America great.
We support businesses. Those businesses that create jobs, they have
raised more people out of poverty--the businesses and the jobs they
create have raised more people out of poverty than any other government
program can or ever will.
So I wanted to bring these concerns to the attention of the American
people and this body. This is a serious issue that may or may not come
before Congress. If we don't act at all, the Bank expires; and it is
clear from what I have detailed here, there are serious concerns with
moving forward with the Export-Import Bank.
Again, I appreciate the opportunity to speak on this issue.
Mr. BUCK. I thank the gentleman from West Virginia.
Bribery, corruption, and fraud, throughout my tenure as a State and
Federal prosecutor, I saw all of these evils and more. I am
disappointed to say that the words I once used to describe white-collar
criminals can now be used to define a federally funded entity.
The Export-Import Bank, or, as some know it, the Ex-Im Bank, has
taken advantage of our free market system. An institution that once
stood for economic growth, prosperity, and global expansion now stands
as a symbol of greed, a pillar of crony capitalism.
It does not take a trained eye to see that the Ex-Im Bank is exactly
what is wrong with Washington today. This 80-year-old institution we
once trusted to expand our ``Made in America'' brand to every corner of
the globe has failed to live up to its charter and has, instead,
morphed into something else.
The Bank does not maintain or create jobs. It does not support small
businesses as much as its supporters would like you to think. It does
not level the playing field for U.S. exporters. It is not even a good
deal for taxpayers. The Ex-Im Bank has become more like a train with no
conductor at the helm, running faster and faster, heading straight off
the tracks. As so often happens when accountability is slim and
punishment is nonexistent, the Ex-Im Bank has become a breeding ground
for corruption, cronyism, and fraud.
If you think I am wrong, even President Obama agreed with me back in
2008. Before he ascended to the White House, Mr. Obama said that the
Ex-Im Bank was ``little more than corporate welfare.'' The President is
also on record saying:
There should be a level playing field for U.S. exporters,
allowing them to compete based on the quality and price of
their goods and services, rather than on the quality of any
officially supported financing.
You know, Mr. President, the great thing about the Internet is those
words never go away, no matter how much you change your tune.
At best, the Bank is handpicking winners and losers. At worst, Ex-Im
Bank is corruptly accepting bribes, crookedly steering funds to favored
foreign companies, and chilling the market for our homegrown companies.
Take, for instance, Delta Air Lines. Delta is suing Ex-Im Bank
because it feels that it is being cheated out of many of its former
routes. The airline is on record saying that foreign competitors aided
by American taxpayer-funded loans from the Ex-Im Bank can now charge
less per flight because they have purchased Boeing aircraft at cheaper
prices than our own American companies can.
[[Page H2456]]
{time} 1345
The American taxpayer is subsidizing foreign airlines that compete
with other American airlines.
Speaking of Boeing and the Ex-Im Bank's corrupt practices, following
Delta's suit, Congress mandated that the Bank perform economic impact
reviews on all large deals. Take one guess who helped Ex-Im craft these
rules. Boeing. This company received 65.4 percent of the bank's
taxpayer-backed financing to help sell their jets to foreign companies,
putting domestic airlines like Delta in a bind. How can Ex-Im justify
its claims of leveling the playing field and supporting small
businesses with these practices?
It only takes a quick glance at Ex-Im's leadership to see how we got
to this point. The Daily Caller found that fully half of Ex-Im's own
advisory committee members led businesses that directly benefited from
Ex-Im financing during their term. Five more members had Ex-Im funding
reach their organizations before joining the advisory committee. And
most disturbing of all, if we can have something more disturbing, is
that the current advisory committee chair is former Democratic Governor
Christine Gregoire of Washington State--Washington State, which
receives 43.6 percent of the bank's total funding. I invite you once
again to take one guess at what company is headquartered in Washington
State. Yes, you guessed it: Boeing.
Mr. Speaker, if this is not bad enough, between October 2007 and
March 2014, there were 124 investigations linked to corruption
surrounding the Ex-Im Bank. This includes some 792 separate claims
involving more than $500 million. The Ex-Im inspector general also
revealed last week that 31 other Ex-Im Bank employees are currently
being investigated for fraud. That brings us to nearly 40 Ex-Im
employees who have already been investigated or are currently being
investigated for fraud.
During an Oversight and Government Reform Committee hearing during
the week of April 15, the Export-Import Bank's inspector general
revealed that four senior-level Ex-Im employees were relieved of their
duties last summer. These employees were allegedly steering taxpayer-
funded loans to favored companies in exchange for cash payments and
other kickbacks. A former Congressman is sitting now in Federal prison
until 2023 on bribery charges linked to Bank practices. Another former
Ex-Im employee was indicted in the same scheme for soliciting and
accepting $173,500 in bribes. The list goes on and on. How can we
justify allowing a Federal agency to continue to operate in flagrant
disregard of the law?
Mr. Speaker, the most recent of these cases features a former Ex-Im
loan officer, Johnny Gutierrez. You may remember Mr. Gutierrez as one
of the four Ex-Im employees I mentioned before. He has the dubious
honor of being the first of these four to be formally charged with
bribery by the Department of Justice. He allegedly accepted cash bribes
19 times between 2006 and 2013 to help direct taxpayer-backed loans to
a Florida-based construction equipment exporter, Impex Association. Mr.
Gutierrez was apparently very good at his job. He secured between $1
million and $5 million to finance Impex Association projects in both
Mexico and the Dominican Republic in June 2007. Similar guarantees were
also promised to Jamaica and the Turks and Caicos. It is clear this is,
unfortunately, not an isolated incident.
It only gets worse, Mr. Speaker. In 2009, former Democratic
Congressman William J. Jefferson from Louisiana was convicted of
accepting bribes from U.S. telecom company IGATE and a Nigerian company
in exchange for selling access to Ex-Im Bank employees. Jefferson was
even videotaped receiving $100,000 at the Ritz-Carlton hotel right
across the river in Arlington. When Federal investigators raided
Jefferson's house, they discovered over $90,000 in cash stashed away in
his freezer. This does not even take into account the former Ex-Im
employee, Maureen Scurry, who was indicted for accepting $173,500 worth
of bribes to help the Nigerian company.
I don't know about you, but when an internal poll shows that only
42.1 percent of your employees think the organization's leaders
maintain a high standard of honesty and integrity, and only 50.2
percent of employees believe they can disclose violations of the law
without fearing for their jobs, there is something terribly wrong.
It is time for a change here in Washington. The Ex-Im Bank is the
perfect example of what happens when a single agency is allowed to pick
winners and losers. For too long, Ex-Im employees have been accepting
falsified documents, failing to record applicants' eligibility, and
forging mandatory checks on applicants' financial integrity. There is a
systemic sickness poisoning this agency with greed and corruption. It
must be stopped, and it must be stopped now.
This battle may be hard. But it is one I feel deep down that we must
fight. We cannot allow this corrupt agency to continue picking winners
and losers, laughing in the face of our laws and degrading our free
market principles. The Ex-Im Bank is a portrait of exactly what is
wrong with Washington today, and it is finally time for a change. That
is why I ask you to join me on June 30 in allowing this pillar of crony
capitalism to expire once and for all.
Mr. Speaker, I yield back the balance of my time.
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