At Hearing, Warren Raises Questions on EXIM Bank Transparency and Trump Financial Corruption
Jovanovic commits to no special treatment for Trump cronies, and to work with Committee to provide greater transparency
Watch opening statement here (YouTube) | Watch Q&A here (YouTube)
Washington, D.C. – Today, U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, gave opening remarks and questioned John Jovanovic, President and Chairman of Export-Import Bank of the United States (EXIM), about the importance of bringing greater transparency to EXIM and protecting lending against Trump ally and family corruption.
Below is Ranking Member Warren’s opening statement as delivered:
Thank you, Mr. Chairman, and thank you for holding this hearing.
The Export-Import Bank can be a valuable tool for facilitating exports and for supporting small businesses and American workers in some of our most critical industries. At its best, the Bank can help ensure we build more things here in America. EXIM can help us rebuild our manufacturing base and reshore key supply chains. With this reauthorization, we have an opportunity to make sure that we’re structuring EXIM lending in a way that achieves those goals.
Now before the last reauthorization, which occurred in 2019, a small group in the Senate shut down most of the Bank’s lending and operations for nearly four years. But Congress eventually sat down and reauthorized the Bank. I fought for and secured an increase in the Bank’s small business lending mandate from 20% to 25% in 2015 – and on up to 30% in 2019. Congress also provided the Bank new authority to confront the economic threat posed by China’s providing enormous financing for its exports, and I supported those changes.
The stakes now, are even greater – in large part because of President Trump’s chaotic economic policies. The President promised he would create “millions and millions of new manufacturing jobs.” In reality, we’ve lost nearly 90,000 manufacturing jobs since Trump imposed his illegal tariffs. He has slashed clean energy projects, which has driven energy prices higher and cost us thousands of jobs while it has also taken billions of dollars out of the U.S. economy. The biggest beneficiary of Trump’s chaos has been China.
The EXIM Bank can’t solve every economic challenge. I understand that. But we have a responsibility to make sure that it is used effectively to advance our economic and national security. So, I just want to give a couple of examples, and I want to follow on to Chair Scott’s comments that I strongly agree with:
First, we should update the China and Transformational Export Program that requires EXIM to help U.S. exporters who are facing competition from China in sectors like artificial intelligence, biotechnology, and renewable energy. Congress should also evaluate whether EXIM can do more to promote the onshoring of other industries, like pharmaceutical manufacturing or critical minerals, that are crucial to our security.
Second, we should ensure that EXIM’s decisions help promote small businesses, innovation, job creation, and robust competition. That means strengthening programs like Make More in America. EXIM should not simply be providing support to the biggest and most entrenched industry players – or, even worse, making it easier for them to squeeze out the small and mid-sized American businesses or helping to offshore critical manufacturing jobs.
Look, of course there is more that we can do, in a bipartisan way, to reform EXIM as part of this reauthorization. But I don’t want to ignore the elephant in the room here.
The deep corruption that runs through this Administration makes it difficult to give the President and his appointees authority over huge sums of money without some guardrails in place. We’ve already seen companies connected to the President’s family, or to the families and friends of other Administration officials, get hundreds of millions of dollars in federal contracts or loans or the opportunity to take part in federal government deals. Foreign countries have thrown billions of dollars at the President, his family, and their friends to try to buy influence.
This cloud could hang over EXIM too, especially because the Bank lacks necessary safeguards against corruption. President Trump fired EXIM’s Inspector General as part of a larger purge aimed at eliminating transparency and oversight. And he has failed to nominate any, any, Democratic board members to EXIM – leaving an EXIM board that is only two Republican appointees in charge of what is supposed to be an independent agency with a bipartisan board.
So, as we work on reauthorization, we must promote strong ethical standards and prevent the Bank from being another corrupt tool of this President.
I hope we can do that together, Mr. Chairman.
Below is Ranking Member Warren’s exchange with Jovanovic during the hearing:
Thank you, Mr. Chairman.
So, President Jovanovic, EXIM is currently authorized to make up to $135 billion in loans, guarantees, and insurance. It’s a lot of money—and we may even raise the cap higher. So let me start with what I hope will be a softball.
EXIM is required to evaluate specific statutory criteria, like job creation and reasonable assurance of repayment, in deciding whether or not to extend loans or other financial support to companies. Do you commit that EXIM will not extend loans based on whether a business is connected to President Trump, or his family, or his friends or some other member of the administration?
Jovanovic: That’s an easy one. Regardless of who you are Senator Warren, if you come to the Export Import bank of the United States looking for a loan, you face the same rules, the same process, the same criteria.
Warren: I like it when I throw a softball and you hit it out of the park. Look, there is so much corruption right now across this Administration, it is important to ensure that EXIM doesn’t become another piggy bank for friends of the President or other Administration officials.
And that is especially true when the President fires EXIM’s inspector general and when he refuses to appoint democratic members to the bipartisan board of EXIM.
So let me ask you about critical minerals. There’s broad bipartisan consensus that we need to quickly reduce our dependence on China.
Earlier this year, President Trump launched Project Vault, a public-private partnership to stockpile critical minerals for U.S. manufacturers. Now it’s backed by a $10 billion loan from EXIM. I see the value of an initiative like this. But the American people are going to need a lot more transparency to be reassured that their taxpayer dollars are being used to achieve strategic goals and not just to hand out favors for the Trump family or friends.
So President Jovanovic, do you commit to sharing with Congress all the term sheets, the contracts, and the loan agreements with Project Vault?
Jovanovic: Senator Warren, you know me to be a systematic thinker. Someone who takes this obligation very seriously. We designed project vault to actually do exactly what you described. To actually promote transparency, to be entirely demand driven by the market. So it decentralized decision making mechanisms. We held over 30 congressional briefings on this, over a dozen by myself. We’re going to give you all the information you need within the process to better understand what’s happening and what’s going on.
Warren: So, Congress can see the term sheets, the contracts, and the loan agreements associated with project vault?
Jovanovic: We’re going to continue to work with you to make sure you get all the information you need within the process.
Warren: Is that a yes?
Jovanovic: It’s better than yes.
Warren: I’m going to decide- I’m going to decide what I need here okay? Good.
Despite the promise of Project Vault, reports indicate that it is open only to largely, blue-chip original equipment manufacturers, and that leaves out a lot of the small businesses that we’ve been talking about that make up the vast majority of U.S. manufacturers.
Let me ask, is it true that only large, blue chip manufacturers are included in Project Vault?
Jovanovic: Couldn’t be further from the truth actually. And so, there are two things that I think are really worth noting on this. Number one, is that the participation of blue chip companies actually creates the credit profile in the entire project vault that will actually allow small and medium sized companies to participate. That’s number one.
Number two, even the largest blue chip companies, when we talk about their supply chain, that they are actually trying to fortify, that they want to ensure that they can think about the just in case scenarios, not the just in time scenarios. They are made up of all those small companies as well, so couldn’t be further from the truth.
Warren: So, but this underscores the point I’ve been trying to make about transparency. Public reporting suggests that this is a project focused squarely on large established manufactures, that’s what’s available in the public reports. As you know, 99% of U.S. manufacturers are small or medium sized.
We just want to be confident they're not being cut out. I’m perfectly willing to believe you, but transparency is what will make that clear. So, I just want to do one more on project vault. And that is, I urge you to quickly expand Project Vault to small and medium-sized businesses, make sure they’re getting a chance to participate here.
Will you ensure that it is governed by binding ethics and anti-corruption standards, so that Project Vault is not used to benefit the friends and family of President Trump or other senior Administration officials?
Jovanovic: It will adhere with all the highest ethical standards and the best industry practices across the board.
Warren: I appreciate that. I support EXIM and I want to see it out there for our manufacturers. I just want to make sure that the public can maintain confidence in it. Thank you.
Jovanovic: So do I.
Warren: Thank you. Thank you, Mr. Chairman.
###
Next Article Previous Article