July 29 (Bloomberg) -- The U.S. Congress probably will reauthorize the Export-Import Bank before its charter expires in two months, adding tools to crack down on misconduct by employees, a Republican House committee chairman said.
“It’s an important agency, but it clearly has corruption problems,” House Oversight and Government Reform Committee Darrell Issa of California said yesterday in an interview on Bloomberg Television.
The 80-year-old bank is facing its toughest test as it seeks reauthorization before its financing powers end Sept. 30. Manufacturers such as Boeing Corp. as well as Wall Street banks back the lender, while the Republican-leaning Heritage Foundation and the Club for Growth, oppose the bank as “crony capitalism.”
Issa said incoming House Majority Leader Kevin McCarthy, a fellow California Republican, told him in a meeting yesterday that he would consider a short-term extension of the charter as long as changes are made to the agency’s operations. McCarthy last month in a television interview said the bank’s authority to help overseas companies buy U.S. goods should expire with the charter.
“He’s open to considering a short-term reauthorization, but he too really wants a reform,” Issa said. “We’ve always found a way to reauthorize it; what we haven’t been able to do up until now is put real teeth in transparency and accountability.”
Mike Long, a spokesman for McCarthy, said McCarthy’s position hasn’t changed. McCarthy said in the June 22 interview on “Fox News Sunday” that private lenders should be able to meet the needs of U.S. exporters.
Issa’s committee will hear testimony today on allegations of mismanagement at the lender. Ex-Im President Fred Hochberg and a former employee under investigation for misconduct are scheduled to testify.
Some Republican lawmakers and Tea Party-affiliated groups say the bank is a form of corporate welfare that primarily benefits companies including Boeing, General Electric Co. and Caterpillar Inc. and should cease operations.
Issa’s investigation into misconduct allegations complicates the debate over reauthorizing the bank, potentially fueling opposition and providing political cover to Republicans who may be on the fence.
House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican and top advocate for shuttering the bank, yesterday sent a letter to Hochberg inquiring about any transactions with Russia and foreign entities sanctioned by the U.S. President Barack Obama has escalated economic sanctions on Russia after its incursion into Ukraine and annexation of the Crimea.
Issa said yesterday he supports keeping the bank open, as long as changes are made to let the independent inspector general keep better tabs on what officials are doing, and ensure that people who make decisions don’t benefit from travel and entertainment provided by companies tied to Ex-Im backing.
Issa said the committee has evidence of instances in which companies seeking Export-Import Bank support provided travel and entertainment for an agency official who made a decision on the financing.
“It’s influenced their decisions, undoubtedly, to give a loan they might otherwise not have seen as important,” Issa said in the television interview.
“The Export-Import Bank has zero tolerance for waste, fraud and abuse” bank spokesman Matt Bevens said in a statement when the allegations were first made public. “Due to provisions of the Privacy Act, we are prohibited from commenting on any specific personnel matters.”
The drive to shut the bank gained momentum when McCarthy, elected as No. 2 House Republican, said he was joining other foes of the lender, including Hensarling and House Budget Committee Chairman Paul Ryan of Wisconsin.
Lawmakers leave Washington for a five-week recess starting Aug. 1, which means the debate may be waged through September. The Obama administration is seeking a five-year reauthorization and a gradual increase in the bank’s lending cap, to $160 billion from $140 billion.
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