Last week the House of Representatives passed a bill that would resurrect the currently expired Export-Import Bank for four years. Fortunately, a bipartisan group of 118 congressmen took a principled stand against cronyism, corporate welfare and corruption. Unfortunately, 313 congressmen stood up for their K Street allies at the expense of the American people.
Perhaps the only outcome less surprising than last week’s vote is another incidence of corruption related to the Ex-Im Bank.
But Ex-Im’s history of questionable foreign recipients should come as no surprise when you consider that the antique bank was initially established to support Stalin’s Soviet Union.
The most recent example in what has been an avalanche of corruption scandals to engulf Ex-Im and its beneficiaries is Petroleos de Venezuela (PdVSA), the state owned Venezuelan oil behemoth. As the Wall Street Journal reported, U.S. authorities are now investigating troubling allegations that Venenzula’s leaders used PdVSA as a piggybank to enrich themselves through kickbacks and other forms of corruption.
Like many state-owned companies around the world, PdVSA has benefitted from lucrative taxpayer-backed handouts courtesy of the Ex-Im Bank. In fact, the bank has provided more than $700 million dollars in loans and credit guarantees to PdVSA since 1993.
Meanwhile, PdVSA has been charged with engaging in a variety of illegal activities — from black market currency schemes to laundering drug money — using taxpayer funds.
Not to be outdone, the president of PdVSA, Rafael Ramirez, lived high off the hog — pocketing millions of dollars while Venezuela’s citizens spent hours waiting in line for basic necessities like bread and toilet paper.
Although the U.S. government has yet to file charges in this ongoing case, this level of corruption highlights the dangers of supporting unaccountable, foreign, state-owned firms.
The beleaguered beltway bank is of course no stranger to corruption. Ex-Im has had dozens of domestic investigations of corruption. The most notable involved Rep. William Jefferson attempting to sell Ex-Im loans in exchange for $100,000. The resulting conviction saw the longest sentence ever handed down to a congressman.
Less frequently reported (but no less shocking) is the long history of corruption involving the many state-owned companies benefiting from Ex-Im’s taxpayer-backed handouts. From Mexico’s Pemex, which suffers from the influence of Mexican cartels, to the Russian banks, Vnesheconombank and Gazprombank, now under U.S. sanctions, Ex-Im has a long history of dealing with unsavory foreign entities.
Corruption or pay-to-play may be an unfortunate way of life in many countries, but that’s not how things are supposed to work here in America. And American taxpayers should not be involved in providing financial assistance to companies that are embroiled in political corruption.
When supporters spout their K Street-approved talking points about the bank, they conveniently fail to mention its long history of corruption and unsavory relationships with opaque foreign companies in far-flung and often unstable countries.
Countries like Russia, Mexico and Venezuela have enough problems with corruption — they don’t need Americans to help underwrite it.
The bad news is that the House of Representatives has already voted to keep Americans on the hook for these risky foreign loans. The good news is that the Senate doesn’t have to.
We hope Sen. McConnell will resist the calls of special interest groups, and close the coffin on this corrupt, crony bank once and for all.
Eric Peterson is a state policy analyst for Americans for Prosperity. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
