Officials At The Ex-Im Bank Are Under Investigation As It Fights For Survival

Tyler Durden's picture

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

The Export-Import bank isn’t a big issue for me. In fact, I’ve barely given it much thought at all over the years. The reason I’ve decided to write on it today is because the federally backed bank, which has been around since 1934, faces a very serious threat to its survival.

I think the most important aspect of this entire fight is the fact that on opposite sides of the debate are not Democrats versus Republicans, but once again Republicans vs. Republicans (as in the Dave Brat vs. Eric Cantor race). We again see tea party Republicans facing off against establishment RINOs. On one side we hear claims by the tea party wing that the Ex-Im merely serves as a conduit for crony capitalism and favoritism to large corporations, or those willing to bribe officials. On the other side, we see establishment Republicans, who are extremely cozy with mega-corporations, maintaing that the institution plays a crucial role in financing American exports to make them competitive.

As longtime readers know, I subscribe to the generational cycle work of Neil Howe and William Strauss, which maintains we are in the midst of what they call a Fourth-Turning. In a Fourth-Turning you essentially experience a massive paradigm shift. All of the institutions we knew our entire lives get washed away or changed dramatically. The battle against the Ex-Im bank, a 80 year old institution, is just another example of the sort of changes that happen in Fourth-Turnings. The civil war within the Republican Party and the emergence of Bitcoin and crypto-currencies are others. The signs of tremendous change are everywhere.

So here’s some background on what’s going on from The Hill:

With Rep. Steve Scalise (R-La.) — an Ex-Im critic during the 2012 battle — jumping into the majority whip post, supporters of the bank say a divided GOP leadership is unlikely to push for a longterm renewal of the bank’s charter, which expires Sept. 30.

 

Neither the Senate nor the House have yet to produce a reauthorization bill. Without a bill, the bank will cease doing business.

 

The federally backed bank, established in 1934, helps finance American businesses’ foreign sales. Supporters say Ex-Im is needed to help  U.S. companies stay competitive in foreign markets. Critics say it’s corporate welfare designed to pump money for big business.

 

As part of his bid to become majority leader, McCarthy told his Republican colleagues in a closed-door meeting that he wouldn’t overstep Hensarling on Ex-Im — a major blow to the bank’s future. The bank expires if the House doesn’t produce a bill to reauthorize it, and Hensarling’s committee has jurisdiction on the issue.

 

Hensarling has been one of Congress’s most vocal opponents of the bank, which tea party conservatives have criticized as “cronyism” and “corporate welfare.” The 2012 reauthorization bill passed 330-93, eight not voting and no Democrats opposing the legislation.

 

Tea party groups and their allies in Congress are now in a full-fledged policy war against Ex-Im supporters, such as The Financial Services Roundtable, The Coalition for Employment Through Exports, and The Chamber of Commerce.

 

Sens. Joe Manchin (D-W.V.) and Mark Kirk (R-Ill.) are working on a reauthorization bill in the Senate, but it’s unclear who on the House Financial Services Committee will buck Hensarling and propose a bill of their own, according to sources familiar with the issue.

 

In case you don’t recall who Sen. Joe Manchin is, he’s the putz who suggested banning Bitcoin earlier this year. Back in February, he wrote a letter stating:

Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.

I covered that sad story in my post: U.S. Senator Wants to Ban Bitcoin – To be Followed by Book Burnings and Witch Hunts. Now, back to The Hill

Choosing to support or oppose Ex-Im could prove a thorny issue for Republicans who are up for reelection, forcing them to pick sides between the establishment GOP and the more conservative tea party.

 

“Our mission is not to make Republicans happy or to get Republicans elected, it’s to fight for free market principles,” AFP’s Russell said.

 

Hensarling is set to chair a hearing on the issue Wednesday, in which Ex-Im Chairman Fred P. Hochberg is slated to testify.

Throwing another wrench into an already dramatic political fight, is this morning’s report from The Wall Street Journal about several officials at the Ex-Im bank being suspended for corruption charges. This just provides further ammunition for those who want to get rid of the thing. From the WSJ:

The U.S. Export-Import Bank has suspended or removed four officials in recent months amid investigations into allegations of gifts and kickbacks, as well as attempts to steer federal contracts to favored companies, several people familiar with the matter said.

 

One employee, Johnny Gutierrez, an official in the short-term trade finance division, allegedly accepted cash payments in exchange for trying to help a Florida company obtain U.S. government financing to export construction equipment to Latin America, according to a person familiar with the inquiry. Mr. Gutierrez was escorted from the Ex-Im Bank building in April, said two people familiar with the matter.

 

Of the four employees, Mr. Gutierrez’s responsibilities were most central to the agency’s core mission of financing exports. Two of the others are being investigated over allegations of improperly awarding contracts to help run the agency; the third is being investigated over allegations of accepting gifts on behalf of a company seeking financing, according to people familiar with the matter. The identities of the three couldn’t be fully corroborated.

 

The internal investigations come at a pivotal time for the agency. Congress is considering whether to reauthorize the 80-year-old federal trade-finance agency, and two of the top three House Republican leaders now say they won’t agree to authorize the agency’s charter after it expires in September. The allegations of misconduct could complicate an already difficult political environment for those who support the agency’s reauthorization. The Export-Import Bank changed how it disclosed financing deals in 2010 and no longer discloses all the small business loans it originates. An agency spokesman wouldn’t comment on the agency’s recent involvement with Impex, though it has backed Impex deals through at least 2011.As usual, total disclosure for the plebs, no disclosure for them.The agency operates on borrowed money from the Treasury Department, which it pays interest on. It uses that money for direct loans or loan guarantees. In fiscal 2013, the agency authorized $27 billion to support an estimated $37.4 billion in U.S. export sales. It also sent $1.06 billion to the U.S. Treasury, money it earned from interest and fees

So what does Barack Obama think of the Export-Import bank? As usual, it depends on who you ask, Presidential-candidate Obama, or President-elect Obama. Candidate Obama was pretty clear about his position while campaigning in 2008, calling it “little more than a fund for corporate welfare.”

See for yourself in the video below:

 

Of course that didn’t stop him from signing the reauthorization in 2012 and raising its lending authority by 40%. What a joke.

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Stuck on Zero's picture

Every other country has an "ex-Im" bank and that is why they outcompete us on every overseas contract.  Korea, Germany, Japan, China, Taiwan, etc. will never, ever be underbid in a foreign deal thanks to their banks.  True, they all favor the big guys but what are we to do to compete?

 

Oldwood's picture

lets try not competing. lets try buying and selling our own shit to ourselves. We will never win in a competition of corruption as ultimately no one does. We have been suffering a trade deficit for decades and continue to lose jobs. The chamber has been pushing this shit forever because some corporations are making big bucks at it, but America as a whole has been losing. I say fuckem.

LetThemEatRand's picture

Go fuck yourself for being right on this one (my way of saying you are right).  In all seriousness, why is this controversial?   

Oldwood's picture

Because of the word we dare not speak ...protectionism. We are politically correct disabled and cannot, under any circumstance, protect ourselves. A great deal of the core of protectionism could have been accomplished by simply using the bloody pulpit and suggesting, on a regular basis, that we "buy American". Instead they have been mostly silent on the issue other than to imply Government will take the appropriate actions to ensure our success. But even then, our success must come second place to "world relations". We don't want to be haters. We shouldn't EVER take actions to protect ourselves. Definitely no guns. Definitely no borders. Definitely no tarrifs. Definitely no resistance.

Definitely NO trust. I refuse to relinquish my rights, my freedom, my personal sovereignty to these fucks. Regardless of party (and I have always voted conservative) I refuse to give them any more power over me. They have lost my trust, totally, and at this point they can only recover it in retreat or surrender.

all-priced-in's picture

The problem will just shift.

You don't possibly think that we will eliminate 100% of all imports & exports do you? Complete isolationism? Not going to happen because it can't.

I wonder how much a fucking gallon of gas would cost if we can't import any oil?

How about a cup of coffee, an iPhone, a TV set, a car -- oh right we would have the government decide what gets in and what doesn't - they could do a better job managing the economy than allowing me to decide what product I want to buy.  

So then you would have the government - through the political process of what gets them the most campaign cash  & votes - deciding who gets to export and who can import stuff into the USA 1,000X more than they already do.

How can you think that an almost 100% government control of an economy could be a good thing?

 

 EDIT - The best example of limited international trade would be North Korea - fuck yea - let's follow their lead to a better economy.

 

 

Jannn's picture

LBMA Forum Singapore: SGE Chairman Confirms Chinese Gold Demand In 2013 Hit 2000 MT

http://www.ingoldwetrust.ch/lbma-forum-singapore-sge-chairman-confirms-c...

doctor10's picture

started in 1934?  You can bet its "unconstitutional" since FDR had something to do with it.

The Constitution is all about making it good for Americans-not necessarily "American Corporations".  And certainly not DC "public servants" -whose jobs are ultimately to make sure the Constitution continues to make it good for us.

To the extent they do there jobs or not depends upon how we their bosses hold them to it. The Tea Party is the best (and currently, only) expression of that expectation of accountability.

Urban Redneck's picture

separate issue

Most people have no idea how the ExIm Bank, international trade, or the world in general actually work. Yes, without effective export assistance the US WILL LOSE both jobs and wealth. But when Joe Bite-Me's buddy is applying for millions in taxpayer for car dealership in the former USSR, AS A SMALL BUSINESS, ask yourself this- isn't it easier to just burn it down and rebuild from scratch? Moreover, is it possible even possible for the patient to make a full recovery and lead a somewhat normal life?

doctor10's picture

why does that sort of "assistance" somehow sounds like Tony Bagodonuts promising to help my business not get its storefront caved in?

 

most of that assistance could be provided by the private sector i'm sure

Urban Redneck's picture

Only a portion of the assistance could be provided by the private sector, and it would NECESSARILY INVOLVE ENRICHING TBTF BANKS IN THE US (so even the "private" solution creates a taxpayer financed backstop).

How many people do you know who would say "I want a Chevy Malbu, not a Toyota Corolla, I don't care if costs TWICE as much, but I'll take one in whatever color and with whatever accessories, and I'm willing to PAY CASH"?

In the meantime, foreign manufacturers capture market share and build out local sales and support networks. Mercantilism is alive and well despite what the US education system, cocksucking Keynesian snake oil salesmen, and Wikipedia say. Perhaps they are fooled by the relative autonomy with which major multinationals operate.

It's a DEBT FEAST and it needs to feed.

Da Yooper's picture

Do ya think barry owes the bankers a favor or three

BandGap's picture

Symbiotic relationship.

What part of the UP, dude?

Da Yooper's picture

The only liberal hell hole

Marquette

 

I wish i had known when I moved here

If ya want to move to the UP

stay away from Marquette & Marquette County


Terminus C's picture

Reading this shit is so much more enlightening when using the Greenhouse app.  It is just shocking, shocking I say...

Those who have already been bribed: support to save the bank

Those not yet bribed (or bribed enough): want to close it down...

Who knew?  Well, Greenhouse shows us the emperical data :)  Good job Kiddo.

Winston Churchill's picture

Uttar Pradesh ?

Too hot and dusty for me.

AdvancingTime's picture

Today a big topic is the huge growth in inequality. This is driven by insider dealing and the games in Washington.  Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching.

I contend the biggest problem is the massive growth in crony capitalism and corruption in Washington. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world we have found it impossible to watch all the moving parts. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html

zhandax's picture

And how does that .01% do this?  For the most part, they control the S&P 500.  Well, there are laws on the books to deal with that, but fuckit, they aren't going to be enforced by anyone.  There is no way to outspend them.  Or is there?  OK, not on an aggregate basis, but if we examine the details of this exchange, it appears that seniority of those bribed is what makes this system work.  This Fourth Turning business may work in our favor.  Plenty of unrest and dissatisfaction out there?  Good!  Make it work for you.  The Constitution has all but been shredded, and even this point has been fudged, but all appropriations must be initiated by the House.  The nice thing about the House is they are all up for election every two years.  No need to convince anyone to vote for a particular person or party.  Just convince a few to vote against the guy already there.  Should be easy to blame him for everything.  A system where everyone in the House is only there two years is a system where the .01%'s money is useless. 

This is my first, last, and only 'go vote' post on ZH, or anywhere else.  Do I think it will work?  Not enough to keep me from adding /Sarc and following Merle Haggard's advice: http://www.youtube.com/watch?v=HuJ9rNSImQA

 

PhilofOz's picture

You're on the right track getting rid of incumbents, but surely in the US they have at least a four year term before they must face the voters again. 

Sean7k's picture

The president is the only four year term office. Senators sit for six and representatives for two.

MrButtoMcFarty's picture

Nothing changes until K Street burns.

NoDebt's picture

The Fourth Turning appears to be a turning towards statism/totalitarianism with a splash of NWO thrown in for good measure, near as I can tell.  A final cast-off of this silly and short sighted individual freedoms-based contract we've had the luxury of living under in the US for a relative handfull of generations.  

Ex/Im Bank survives and is expanded.

Dr. Engali's picture

There are many times when I think that too as the old institutions cling to power, but then there are days when we see the disruptive power if the internet, I.E the disruption if TPTB Syria invasion, and I remain hopeful that the old gaur will be swept away.

NoDebt's picture

The internet is no big threat to them.  After all, they invented it.  Any part of it gets too uppity, they shut it down.  Ask 'The Guardian' how this shit works.  In China they just censor and shut off anything they don't like without notice.

No, the Matrix works FOR the status quo, not against it.  Only us hackers eating room-temp 'creamy wheat' in our busted-ass hover-ships, scurrying around, avoiding the Sentinels, know the truth.  Our prospects are pretty grim.

Dr. Engali's picture

Boy somebody dumped a big old steamy shit in your creamy wheat this morning. ;-> Dream crusher.

Took Red Pill's picture

At least it tastes like chicken!

Crawdaddy's picture

The old gaurd can turn to bat guano once the new machinery is in place. Apparently the new machinery is in place.John Perkins may have had a tiny bit to do with the ExIM demise.

disabledvet's picture

seems like a very tentative turning to me actually.

"when everyone agrees on what they don't want...that's usually what they get."
"ground zero" for financing foreign weapons sales is of course the ex/im bank.

same goes for selling food...and i imagine energy now as well.

it would be ironic indeed if we actually tried to pay for everything this go around. i mean "the expansion that would be required of that Bank would be huge" if the USA is gonna go on some type of export binge here.

BTW...won't that slow growth and drive down prices as well too?

"I'm always confused about these things...until panic sets in."

NoDebt's picture

God bless you for bringing up the financing of weapons through the Ex-Im Bank.  I never even thought of that, and you're probably right.  

The Ex-IM Bank has a bright future ahead of it, if even half of what you said is true (and it probably is).

zhandax's picture

MIC will provide all the in-house financing needed to distribute their wares if required.  Not a tea-partyer but this is a corporate handout.

FieldingMellish's picture

Time to make a call to the IRS... maybe look into a few of those non-RINO tax returns.

Yen Cross's picture

  I seriously doubt Zero had ever heard of 'Ex-Im' before he was in office... Based on his reasoning skills, some little crony likely sat him down with a pack of colored pencils and a bag of marbles to explain the function 'Ex-Im' is intended for.

El Hosel's picture

"Officials" under investigation...LOL

   Like JD and Angelo?

Colonel Klink's picture

Those weren't marbles, they were connected by a string if we're talking about Obama.

bonin006's picture

There is probably a simpler explanation - he was against it because Bush was for it

Colonel Klink's picture

Oddly enough I find both versions of Obama are just as corrupt and lying.  Scumbags are scumbags, whether candidate or elected.

ebworthen's picture

It would be nice to see Ex-Im bank go away, but I fear it is just a feint to not focus on the TBTF banks of Wall Street.

TWFTG's picture

Hahahaha, the funniest thing is Ex-Im Bank helps big US Corporations which export products mainly and mostly are made in China !!

Please dont ask because They wont tell you ....  !!

Caviar Emptor's picture

Tea party mainly re-branded religious right aka moral majority aka southern conservatives who all hitched their wagons to Reagan and Bushies to get into power. Now hatfield and McCoy feuding with their kissin cousins while a Dem is in office. Only a matter of time when they reunite to win back the White House

boodles's picture

Actually, the first part of your comment is true -- there IS a historical connection between the 1980s Moral Majority, 1990s Christian Coalition and the myraid of "rightist" groups that have recently emerged as the tea-party.  Having said that, such historical lineage isn't destiny.  The tea party is profoundly secular, now.

They will NOT reunite with the establishment wing.  Here's why: its not in their power to do so, and the establishment treats dissent within its rank as worthy of death.  Its the new McCarthyism.  To sum: the establishment won't let the teas back in ... and the teas detest the establishment.

Right now, the establishment is on the rise, winning most (not Cantor, though) races this cycle.  I believe it is because so many centrists and center-left sorts are voting in R primaries, skewing the results leftward toward the establishment.

NOZZLE's picture

is this the same bank that lent Millions for a Rolls Royce dealership for a friend of VP BITEME in Kiev Ukraine the same country were they turned off the hot water so you take a cold shower

Atomizer's picture

Urkel in chief strikes again on reading tommorow's news.

 

ThirdCoastSurfer's picture

Corporations want all the benefits, like those provided by the Ex-Im bank, but they don't want to repatriate their profits?

Corporations may be people in the eyes of the law, but they are sociopaths on the well-being of Americans. 

intric8's picture

The irony here is that hochberg, chairman of exim, is an obama crony. Since his insertion in 2009, big loans amounting to taxpayer subsidies have even been going to big oil! 'fourth turning' speculation notwithstanding, every govt agency is attempting to get theirs while the gettins good.

We are devoid of honest governance. The reckoning will be actuated from below, not above.

Colonel Klink's picture

This guy?

Fred P. Hochberg(Ashkenazi Jew homosexual)

Unpossible!!

Sorry_about_Dresden's picture

He is a  sodomist fart licking fudgepacker!

 "Hochberg's partner is writer Tom Healy."

I can't believe he flaunts it in his bio!

The nerve!

intric8's picture

A homosexual jew selling out exims charter for the interests of big oil. This dude has no redeeming qualities whatsoever

Colonel Klink's picture

Not my words, it's a simple cut and paste.  At least his partner didn't have a sex change and go by the name Tomichelle.

TeethVillage88s's picture

Thank Got we only have to worry about individuals in power in Private Corporations or Public Corporations.

We don't have to worry about:

A) Foreigners heading Federal Agencies
B) Foreigners as Mayors or Governors of Major Cities or States
C) Foreigners Leading US Corporations with huge powers who would: payout dividends after LBO and Leaving the company to layoff US Employees & going bankrupt from debt
D) Foreigners who might prefer a Debt Ridden USA, Debt Ridden Households, Debt Ridden Federal & Local Governments
E) You don't have to worry about Cultural Revolution from "Savers" to "Debtors"
F) Foreigners who pay US Congressmen "Within" the rules through lobbying and campaign contributions for "Wars Overseas in the Interest of the English Empire or Israeli Existence"

It is all Poppy Cock. Oh, that is an English Expression. You are an English Subject, so it should not be new.

BTW: We have a Foreigner in Charge of DHS and I think the Mayor of Chicago is a Foreigner.

TeethVillage88s's picture

Bump I know the system. We are Idiots and we gave up in 1776.

Never One Roach's picture

Let me guess; Billions missing and not one banker will be indicted.