Texas representative Bill Flores, the chairman of the House Republican Study Committee, and Senator Mike Lee have a piece in the Washington Examiner calling for the end of the Export Import Bank this morning. It’s significant because, like former Texas governor Rick Perry, Flores used to be supportive of the bank. Like Perry, Flores says the exposure of serious corruption at Ex-Im helped sway his view:
Unfortunately, Ex-Im is more than an outdated agency — it is fundamentally broken. And it should come as no surprise that when such an agency wields the heavy hand of governmental power, mismanagement, misconduct and corruption become the norm. It is a modern day “Enron” of the federal government.
Take, for instance, the case of former Ex-Im official Johnny Gutierrez, who pleaded guilty just last month to accepting nearly $79,000 in bribes. On 19 separate occasions between 2006-13, Gutierrez accepted cash in return for recommending the bank approve certain unqualified loan applications.
This example is not isolated. At a recent congressional hearing on Ex-Im, House Financial Services Chairman Jeb Hensarling, R-Texas, pointed out that Ex-Im has seen an overall increase in criminal charges since President Obama appointed Chairman Fred Hochberg to head it six years ago. According to the chairman, the supposedly small bank’s rap sheet is impressive: “Sixty-five matters have been referred to prosecution, 31 arrest warrants, 85 indictments, 48 criminal judgments, decades of combined prison time, a quarter of billion in fines, restitution and forfeiture.”
Those numbers may soon rise even higher — at the same hearing, Ex-Im’s inspector general testified that there are at least 31 open fraud investigations involving Ex-Im that could lead to future indictments.
To head us wrap your head around the scale of the problem, Freedom Partners just released a new infographic focusing on the culture of corruption at the Ex-Im Bank, breaking it down by the numbers: 792 fraud claims, 124 investigations, 85 indictments, 74 frozen transactions and other administrative actions, 66 years in prison sentences, 48 criminal judgments, 31 open fraud investigations, and $112 billion in taxpayer funding at risk of abuse — just in recent years!
The problem is bigger than this, of course. since it doen’t mention all the perfectly legal dishonesty Ex-Im officials have engaged in – like touting a loan as a small-business success story as the recipient is actually quite a large company or was successful long before any Ex-Im involvement. There’s also, of course, even more blatant dishonesty, like when Ex-Im mislabeled many transactions as small-business deals when in fact they were transactions involving very large companies.
In other words, Senator Lee and Representative Flores are right; Ex-Im is the government Enron, and it’s time to put it out of business.