The Export-Import Bank: Still full of crony capitalism
posted at 3:21 pm on July 19, 2012 by Dustin Siggins
As the campaign season has heated up, so have the investigations and attacks on various campaign contributors to Mitt Romney and President Obama. Republican donor Sheldon Adelson, for example, was targeted in a lengthy Huffington Post article earlier this week. Obama donor and fundraiser Steve Westly was hit by a Republican National Committee ad highlighting $500 million in government contracts companies he is associated with have received.
According to a Republican operative, two other Obama donors deserve more attention than they have received. The operative, whose organization is partially based in Washington, pointed me to contributions made by Deven Parekh and Kirk Wagar, both members of the Export-Import Bank’s 2012 Advisory Committee. This is the same Export-Import Bank Obama claimed was an inefficiently-funded organization in his first campaign, yet more recently praised when a deal was signed by Boeing through the Bank. He praised it again when he signed its reauthorization.
How significant are Parekh and Wagar? According to public information gathered by the operative via OpenSecrets.org, they have each raised or contributed over $200,000 to Obama’s campaign efforts, the Democratic National Committee, and other Democratic groups and candidates. Parekh bundled $226,100 for Obama’s re-election campaign, and contributed $130,000 to Democratic candidates and groups. Wagar, who is Obama’s Florida finance chair, has contributed $114,800 to Democratic candidates and organizations. Additionally, the Obama campaign website lists Wagar as having raised over $500,000 for the campaign.
Are these appointments a demonstration of quid pro quo? According to Ex-Im Bank spokesperson Linda Formella, the advisory committee’s role is simply that – advisory. She said that the committee comprises representatives of the private sector and state governments, and it offers macroeconomic input to assist the Bank in (to quote an e-mail) “meeting its congressional mandate to provide competitive financing for U.S. exports.” For example, according to Formella, it is the Board of Directors, not the Advisory Committee, that is involved in the approval process for larger transactions such as the aforementioned Boeing deal. Smaller transactions are handled by lower-level senior Bank staff, independent of the Advisory Committee.
In another e-mail, Formella wrote:
All Ex-Im Bank advisory committee members are fully vetted by the Bank to ensure compliance with federal laws governing such appointments. Campaign donors are not given preferential treatment nor are they excluded from consideration or selection for these types of appointments.
Ex-Im Bank’s advisory committee meetings are open to the public. The advisory committee is transparent in its work and recommendations to the Bank.
Unlike Westly, it appears that neither Parekh nor Wagar are receiving any potentially illegal or unethical repayment from Obama for their work on his campaign’s behalf, or at least no more than is normal in Washington. However, this “normal” means that Obama’s claim – and Bush’s before him – that the Bank is a force for good economic change is another Big Government farce, as George Will pointed out apart in March. For example, according to a 2011 Cato publication, 92.8% of the Ex-Im Bank’s loans and guarantees went to ten companies in 2010, the largest of which are Boeing, KBR, Inc. and General Electric Co.
The Bank’s President attempted to refute Will’s column in a letter to the editor, saying 87% of Ex-Im Bank’s transactions (including insurance) directly benefit small businesses. According to Formella, this 87% is independent of indirect benefit to small-business suppliers to larger exporters such as Boeing. However, no matter how you spin it, the fact is that the Cato report shows that nearly 93% of the Ex-Im Bank’s loans and guarantees go to ten large corporations. Free market economics this is not, especially when well-connected campaign donors and bundlers are involved.