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Ex-Im Bank probes alleged kickbacks

Four officials of the U.S. Export-Import Bank have been removed or suspended during an investigation of alleged improper gifts and kickbacks, according to a report Monday by the Wall Street Journal.

The government-funded Ex-Im Bank extends financing to overseas buyers of U.S. goods and services.

The bank said in a statement it doesn’t comment on “personnel matters” and that it has “a comprehensive system of internal controls.”

The Wall Street Journal said Johnny Gutierrez, an official in the Ex-Im Bank’s short-term trade finance division, allegedly took cash payments to help a Florida company obtain federal financing to export construction equipment to Latin America.

According to the report, Gutierrez’s lawyer confirmed that Gutierrez is on leave after an investigation by the bank’s inspector general.

Two other officials are being investigated over allegations of improperly awarding contracts, the WSJ said, and the fourth faces a probe over allegations of “accepting gifts on behalf of a company seeking financing.”

The Ex-Im Bank was founded 80 years ago. It borrows money from the Treasury Department and pays interest on it. “It uses that money for direct loans or loan guarantees,” the WSJ said.

In fiscal 2013, the bank authorized $27 billion to support an estimated $37.4 billion in U.S. export sales. And it sent $1.06 billion to the U.S. Treasury as interest and fees.

“The agency and its 400 employees help finance export deals for a number of large and small U.S. companies, the WSJ said, “including Boeing Co., General Electric Co. and Caterpillar Inc.”

Before news broke about the kickback allegations, some Republican congressmen had proposed not renewing the Ex-Im Bank’s charter.

Rep. Kevin McCarthy, the incoming House majority leader, said Sunday the bank’s role should be taken over by the private sector.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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1 Comment

  1. The Ex-Im Bank is a critical tool for American manufacturing. Virtually every other industrialized country has one.

    That's not to say that we should automatically copy what other countries do… but in this case, our inability to match the government support of virtually all of our competitors would cause a huge loss of manufacturing jobs, activity, and profits. We do need the Ex-Im Bank, and it's unfortunate that many in Washington (on my side of the aisle, darn it!) don't understand international business well enough to see it.

    That being said, however, the Ex-Im Bank MUST be perfectly honest and apolitical for this case to be made. Both mismanagement and politicization of the mandate have weakened the pro-Ex-Im case severely.

    First they started rejecting projects that involved carbon energy, because of crackpot extremists in the Global Warming religion camp.

    Then they started expanding the charter to cover domestic loans, fuzzying up the very purpose of the Export-Import Bank. (did they forget to read their own name on the letterhead???)

    And now bribes and kickbacks? As Gandalf said, "Third time pays for all." This revelation could cause some severe trouble for the Ex-Im Bank and its fans.


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