Export-Import Bank of The United States - Criticism

Criticism

The Bank has come under criticism for allegedly favoring special interests ahead of that of the U.S. taxpayer. These interests include that of heavily subsidized corporations such as Boeing or Enron as well as those of well-connected foreign governments and nationals (such as a 1996 $120 million low-interest loan to the China National Nuclear Power Corporation (CNNP)). The majority of loan guarantees over 2007 and 2008 went to companies purchasing Boeing aircraft.

However, the current congressional mandate for the Export-Import Bank of the United States is to focus on small business support.

Timothy Carney of the Washington Examiner has written that the Bank:

epitomizes corporate welfare. It also is a prime example of unaccountability. The agency is independent of any cabinet department, and it hands out loans and loan guarantees basically at its own discretion. Congress typically gives Ex-Im lengthy reauthorizations, thus minimizing congressional oversight. In recent years, Ex-Im was moved off-budget, meaning it funds itself with the repayments from old loans and the fees from new ones. So it’s kind of like Fannie Mae was, before its exposure became real and the taxpayers had to come in and bail it out.

In 2007, WFAA-TV in Dallas revealed that the Ex-Im Bank had given at least $243 million in fraudulent loans to companies doing business with Mexico, including giving loans to companies with no verifiable address and individuals who were known associates of the Sinaloa and Juarez drug trafficking cartels.

In February 2009, the Ex-Im Bank settled a seven-year-long legal proceeding brought by Friends of the Earth, other NGOs, and various American cities. The plaintiffs claimed that the Ex-Im Bank and the Overseas Private Investment Corporation (OPIC) provided financial assistance to oil and other fossil fuel projects without first evaluating the projects' global warming impacts. In 2005, the plaintiffs were granted legal standing to sue these federal bodies. The landmark decision is the first time that a federal court has specifically granted legal standing for a lawsuit exclusively challenging the federal government's failure to evaluate the impacts of its actions on the Earth's climate and U.S. citizens. In its settlement agreement, the Ex-Im Bank agrees to evaluate the carbon dioxide emissions as part of its determination for qualification for a project. However, Ex-Im Bank fossil fuel financing and associated greenhouse gas emissions grew swiftly after the settlement agreement, according to the agency's annual reports and other records.

Environmental groups say that under the Obama Administration the Ex-Im Bank is on a "fossil fuel binge," which “makes a mockery” of President Obama’s stated commitment to phase out fossil fuel subsidies. In December, 2009, Ex-Im Bank Directors approved $3 billion dollars in financing for the ExxonMobil-led Papua New Guinea Liquid Gas project in December, 2009, just as President Obama flew to climate change negotiations in Copenhagen. The project has reportedly sparked violence and in April, 2012, the Papua New Guinea government called in troops to quell opposition from villagers after a landslide linked to a quarry that had been used by the project killed an estimated 25 people.

In 2010, environmental groups criticized the Ex-Im Bank Directors for approving $917 million in financing for the 3,960 megawatt Sasan coal fired power plant in India after initially rejecting the project on climate change grounds. Environmental groups say that in reversing the decision the agency’s Chairman, Fred Hochberg and Board of Directors "caved in" to political pressure from Wisconsin politicians. In 2011, several environmental groups protested at Export-Import Bank headquarters, unsuccessfully urging Chairman Hochberg and Board of Directors to reject $805 million in financing for the 4,800 megawatt Kusile coal fired power plant in South Africa,] which environmental groups say is the largest carbon emitting project in the agency's history and will emit excessive local air pollution that will harm human health, while not alleviating energy poverty.