Here’s another reason to end Ex-Im: The crony bank spent $580 million last year to finance Russian-owned companies

Export-Import Bank and Sberbank

The House Financial Services Committee noted yesterday that Ex-Im increased funding for Russian projects by 177 percent in FY 2013, translating to a $580 million commitment, which the committee says is a record level.

“Hardworking Americans taxpayers should be asking why they’re on the hook for Russian oil projects funneled to Vladimir Putin’s cronies while they’re struggling to pay for higher gas prices here at home and NATO issues warnings of further Russian aggression,” the committee explains, pointing to a $1 billion memorandum of understanding that Ex-Im Chairman Fred Hochberg signed in 2012 with state-owned Sberbank, the largest bank in Russia.

The committee notes that “Ex-Im worked with Sberbank on a $32.3 million loan involving a Russian petroleum project.” That deal involved UPO LLC, an oil company owned by Honeywell, a firm with a net-income of more than $3.9 billion, according to its financial disclosures.

Ex-Im claims that the $1 billion deal will increase U.S. exports to and trade with Russia. “While the agreement is available to support sales in all business sectors for which Ex-Im Bank export-financing support is available,” the 2012 press release states, “Ex-Im sees great potential for U.S. companies is concentrated in aviation, infrastructure, and energy, including both conventional and renewable energy.”

It just so happens that the Export-Import Bank’s largest domestic beneficiaries are in the industries in the press release. Boeing, the aerospace manufacturer, for example, received 66 percent of the loan guarantees the Bank made in FY 2013. Ex-Im has also doled out billions to energy firms, including green energy companies favored by the Obama administration.

Conservative groups have already highlighted the Export-Import Bank’s ties with Russia. In March, shortly after Putin’s government got involved in the Ukrainian revolution, the Club for Growth issued a press release in which it explained that Ex-Im had discussions with Gennady Timchenko, a Russian billionaire and Putin ally, for “U.S. government-backed funding to buy luxury aircraft.”

Timchenko was eventually sanctioned by the Obama administration because of his connections to Putin.

The Club for Growth also pointed to August 2000 report from the Center for Public Integrity which noted that the Export-Import Bank had “guaranteed $489 million in credits to a Russian oil company whose roots are imbedded in a legacy of KGB and Communist Party corruption, as well as drug trafficking and organized crime funds.”

The Export-Import Bank, dubbed the “face of cronyism” by House Financial Services Committee Chairman Jeb Hensarling (R-TX), is facing extraordinary scrutiny ahead of a reauthorization vote. Because of the uncertainty facing its future, congressional leaders may attach reauthorization of Ex-Im to a government funding measure expected to come up for a vote by the end of September.


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