Ex-Im Bank’s $100,000 Junket
In September, the Export-Import Bank is slated to expire and a bipartisan coalition is already beginning to advocate for its renewal. The debate is likely to be contentious throughout, with a number of conservative policymakers calling for its expiration while a string of big-money interests, throttled by corporate horsepower, campaign for its survival.
Ex-Im loans have inspired a lot of loyalty over the years, and many billion-dollar companies have come to take great comfort from receiving taxpayer backing. Ex-Im’s process of determining which industries are worthy of taxpayer-backed support is not only notoriously subjective, but prone to manipulation and corporate favoritism. Well-connected special interests and campaign allies line up to petition Ex-Im’s assistance, rendering the loaning process a breeding ground for corruption.
In 2012, Bloomberg reported on Exxon Mobil Corp. and its partners who, seeking Ex-Im financing, paid almost $100,000 in travel expenses for four Ex-Im employees sent to evaluate their project. As Bloomberg notes:
The expenses included traveling to London, Tokyo and the South Pacific, according to data compiled by the bank. They flew business class, viewed the project’s route by chartered aircraft and were entertained by costumed villagers. Eleven months later, the bank approved $3 billion in financing for the liquefied natural gas facility, the biggest transaction in the agency’s 75 years.
This example is one in a long line of questionable transactions. One would imagine that the process of facilitating a government loan would be especially protected from even the appearance of impropriety. Ex-Im, however, seems unconcerned.
Private sector investors and businesses best understand how and why to utilize their capital and are incentivized to make reasonable, fact-based choices given that they are risking their own money. Bureaucrats in Washington cannot be trusted to manipulate the free-market. When the government gambles with other people’s money, it can pick from whichever priority it likes. And the American taxpayer, it would seem, is far down on that list.