Export-Import Bank officials breathed a sigh of relief when President Obama on Friday signed the independent agency’s reauthorization after months of efforts by Republicans to abolish the bank as “corporate welfare.”
But changes are in the works, among them the bill’s requirements that the bank establish an ethics office and appoint a risk manager.
Bank President and CEO Fred Hochberg on Friday hailed the new law, telling employees, customers and other stakeholders that “beginning today, EXIM will be able to restart the work needed to meet its mission of supporting American jobs and equipping American businesses with the tools necessary to compete for global sales. Importantly, the bank secured a long-term reauthorization that will be in effect until Sept. 30, 2019.”
Bank staff—who continued to work on existing loans after the bank’s authority for new loans ended in September—are now ready to receive applications for new transactions with export-oriented businesses. “Given the expected volume, the efforts required to get our processes back up and running, and the need to apply our comprehensive due diligence requirements to every transaction, we are asking customers and other EXIM stakeholders to be patient while we resume authorized activities,” Hochberg said, predicting full capacity by Dec. 8.
All transactions totaling $10 million or more require approval by the bank’s board of directors, he added, noting that those must wait until the Senate approves three stalled nominations.
The new chief ethics officer will recommend administrative actions to establish and enforce standards of ethical conduct for employees and contractors and report to the inspector general and appropriate federal or state authorities any “substantial evidence of a violation of any law applicable to the performance of official duties that may have been disclosed to the Office of Ethics.”
The new chief risk officer will report to the president and “oversee all issues relating to risk within the bank.” The bank is also required to set up a Risk Management Committee of top officials.
The new arrangements may not impress those who wanted the bank abolished. Sen. Mike Lee, R-Utah, said in a statement Friday, “Only in Washington will you find people who believe that an organization’s systemic ethical failings can be overcome by creating a new ‘ethics’ bureaucracy . . . or that hiring a new a risk-management bureaucrat is a suitable replacement for market discipline . . . or that giving another multi-million-dollar contract to a well-connected accounting firm will substitute for real political accountability.”
Since 2009, Lee added, 85 employees or beneficiaries of the EXIM Bank have been indicted for fraud, bribery and other wrongdoings. “None of these bogus ‘reforms’ will make an ounce of difference. None of them change the essential purpose of the Export-Import Bank, which is to use taxpayer money to subsidize wealthy, politically-connected businesses.”