The head of the U.S. Export-Import Bank defended the agency against charges of cronyism and ineffectiveness Wednesday, telling a House panel that the embattled bank’s work is essential to the health of the American economy.
Speaking before the House Financial Services Committee, Fred P. Hochberg, president and chairman of the bank, urged Congress to quickly reauthorize his federal agency’s charter, which will expire Sept. 30. Hochberg said that American businesses are feeling a “direct impact” from the debate over the bank’s future — and that if the bank closes its doors, U.S. companies will take a significant hit.
“The stakes could not be higher,” Hochberg said. “We should not cede American jobs to China, Russia or other countries.”
The bank, an 80-year-old federal agency that provides financing to foreign buyers in an effort to boost U.S. business abroad, has faced heightened scrutiny in recent days as Congress considers whether to reauthorize its charter.
Conservative critics of the bank say it doles out corporate welfare for wealthy U.S. companies, interferes in a realm that could be better run by private enterprise, and undercuts American interests abroad by aiding wealthy and subsidized foreign buyers. Their efforts to shut down the bank are being countered by the Obama administration, which is seeking a five-year reauthorization and an increase to the amount that the bank can lend. The agency was last reauthorized in 2012.
Among the most contentious moments of the lengthy hearing centered on reports that four former bank officials were under investigation for allegedly accepting improper gifts and kickbacks. The allegations, first published in the Wall Street Journal, have turned a harsher light on the agency — and fueled the arguments of the bank’s long-standing critics.
“If true, these allegations would go to the heart of the concern about this bank, its lending and its special interest in [large] corporations,” said Rep. Scott Garrett (R-N.J.).
Ex-Im Bank officials have declined to comment on the allegations, citing employee privacy laws. In a tense exchange, Hochberg refused to answer repeated questions from Rep. Patrick T. McHenry (R-N.C.). about whether he was aware of a criminal investigation into the allegations.
“These matters I think are better answered by the [agency’s inspector general], since in an ongoing investigation, I don’t want to invade anyone’s privacy,” Hochberg said.
In their opening statements and questions to the witnesses, Democratic committee members voiced near-unanimous support for the bank’s reauthorization. But GOP committee members offered up diverging visions for the future of the bank, splitting on the question of whether the embattled agency should be reformed or closed.
A number of committee Republicans joined some Democrats in calling for reauthorization alongside reforms, although they offered few specifics about what such changes might look like and how quickly they could be implemented.
Many Republicans on the committee took a harder stance, saying that previous efforts to reform the bank had been unsuccessful and that it was time to shutter it. “I oppose the continuation of this bank because reform hasn’t worked, we’ve been ignored,” Rep. Michele Bachmann (Minn.) said.
Wednesday was not the first sign of division within Republican ranks over the bank’s future. On Sunday, new House Majority Leader-elect Kevin McCarthy (R-
Calif.) said he supported closing the bank. On Monday, a group of 41 House Republicans signed a letter to House Speaker John A. Boehner (R-Ohio) and McCarthy urging them not to let the bank’s charter expire.
Richard H. Anderson — chief executive of Delta Air Lines, a longtime corporate critic of the bank — softened his stance Wednesday, packing the hearing with about 100 Delta employees. Delta has been critical of the way the bank finances deals involving wide-body aircraft.
But with the bank facing possible termination, Anderson said he would support the bank’s reauthorization as long as it implements several reforms for the agency. “All I want is a level playing field,” Anderson said. “We have to compete against deeply subsidized government airlines [abroad] that are in turn deeply subsidized by our government.”