OVERSIGHT OF EFFORTS TO REFORM THE EXPORT-IMPORT BANK OF THE UNITED STATES JOINT HEARING BEFORE THE SUBCOMMITTEE ON MONETARY POLICY AND TRADE OF THE COMMITTEE ON FINANCIAL SERVICES AND THE SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND ADMINISTRATIVE RULES OF THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION APRIL 15, 2015 Printed for the use of the Committee on Financial Services and the Committee on Oversight and Government Reform Serial No. 114–12 Financial Services Committee Serial No. 114–9 Oversight and Government Reform Committee ( U.S. GOVERNMENT PUBLISHING OFFICE 95–056 PDF WASHINGTON : 2015 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 HOUSE COMMITTEE ON FINANCIAL SERVICES JEB HENSARLING, Texas, Chairman PATRICK T. MCHENRY, North Carolina, MAXINE WATERS, California, Ranking Vice Chairman Member PETER T. KING, New York CAROLYN B. MALONEY, New York EDWARD R. ROYCE, California NYDIA M. VELA´ ZQUEZ, New York FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California SCOTT GARRETT, New Jersey GREGORY W. MEEKS, New York RANDY NEUGEBAUER, Texas MICHAEL E. CAPUANO, Massachusetts STEVAN PEARCE, New Mexico RUBE´ N HINOJOSA, Texas BILL POSEY, Florida WM. LACY CLAY, Missouri MICHAEL G. FITZPATRICK, Pennsylvania STEPHEN F. LYNCH, Massachusetts LYNN A. WESTMORELAND, Georgia DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri AL GREEN, Texas BILL HUIZENGA, Michigan EMANUEL CLEAVER, Missouri SEAN P. DUFFY, Wisconsin GWEN MOORE, Wisconsin ROBERT HURT, Virginia KEITH ELLISON, Minnesota STEVE STIVERS, Ohio ED PERLMUTTER, Colorado STEPHEN LEE FINCHER, Tennessee JAMES A. HIMES, Connecticut MARLIN A. STUTZMAN, Indiana JOHN C. CARNEY, JR., Delaware MICK MULVANEY, South Carolina TERRI A. SEWELL, Alabama RANDY HULTGREN, Illinois BILL FOSTER, Illinois DENNIS A. ROSS, Florida DANIEL T. KILDEE, Michigan ROBERT PITTENGER, North Carolina PATRICK MURPHY, Florida ANN WAGNER, Missouri JOHN K. DELANEY, Maryland ANDY BARR, Kentucky KYRSTEN SINEMA, Arizona KEITH J. ROTHFUS, Pennsylvania JOYCE BEATTY, Ohio LUKE MESSER, Indiana DENNY HECK, Washington DAVID SCHWEIKERT, Arizona JUAN VARGAS, California ROBERT DOLD, Illinois FRANK GUINTA, New Hampshire SCOTT TIPTON, Colorado ROGER WILLIAMS, Texas BRUCE POLIQUIN, Maine MIA LOVE, Utah FRENCH HILL, Arkansas SHANNON MCGAHN, Staff Director JAMES H. CLINGER, Chief Counsel (II) SUBCOMMITTEE ON MONETARY POLICY AND TRADE BILL HUIZENGA, Michigan, Chairman MICK MULVANEY, South Carolina, Vice GWEN MOORE, Wisconsin, Ranking Member Chairman BILL FOSTER, Illinois FRANK D. LUCAS, Oklahoma ED PERLMUTTER, Colorado STEVAN PEARCE, New Mexico JAMES A. HIMES, Connecticut LYNN A. WESTMORELAND, Georgia JOHN C. CARNEY, JR., Delaware MARLIN A. STUTZMAN, Indiana TERRI A. SEWELL, Alabama ROBERT PITTENGER, North Carolina PATRICK MURPHY, Florida LUKE MESSER, Indiana DANIEL T. KILDEE, Michigan DAVID SCHWEIKERT, Arizona DENNY HECK, Washington FRANK GUINTA, New Hampshire MIA LOVE, Utah (III) COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM JASON CHAFFETZ, Utah, Chairman JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland, Ranking MICHAEL R. TURNER, Ohio Minority Member JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York JIM JORDAN, Ohio ELEANOR HOLMES NORTON, District of TIM WALBERG, Michigan Columbia JUSTIN AMASH, Michigan WM. LACY CLAY, Missouri PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts SCOTT DESJARLAIS, Tennessee JIM COOPER, Tennessee TREY GOWDY, South Carolina GERALD E. CONNOLLY, Virginia BLAKE FARENTHOLD, Texas MATT CARTWRIGHT, Pennsylvania CYNTHIA M. LUMMIS, Wyoming TAMMY DUCKWORTH, Illinois THOMAS MASSIE, Kentucky ROBIN L. KELLY, Illinois MARK MEADOWS, North Carolina BRENDA L. LAWRENCE, Michigan RON DESANTIS, Florida TED LIEU, California MICK, MULVANEY, South Carolina BONNIE WATSON COLEMAN, New Jersey KEN BUCK, Colorado STACEY E. PLASKETT, Virgin Islands MARK WALKER, North Carolina MARK DeSAULNIER, California ROD BLUM, Massachusetts BRENDAN F. BOYLE, Pennsylvania JODY B. HICE, Georgia PETER WELCH, Vermont STEVE RUSSELL, Oklahoma MICHELLE LUJAN GRISHAM, New Mexico EARL L. ‘‘BUDDY’’ CARTER, Georgia GLENN GROTHMAN, Wisconsin WILL HURD, Texas GARY J. PALMER, Alabama SEAN MCLAUGHLIN, Staff Director RACHEL WEAVER, Deputy Staff Director ANDREW DOCKHAM, General Counsel LAURA RUSH, Chief Clerk DAVID RAPALLO, Minority Staff Director (IV) SUBCOMMITTEE ON HEALTH CARE,BENEFITS &ADMINISTRATIVE RULES JIM JORDAN, JR., Ohio, Chairman TIM WALBERG, Michigan, MATT CARTWRIGHT, Pennsylvania, SCOTT DESJARLAIS, Tennessee Ranking Member TREY GOWDY, South Carolina ELEANOR HOLMES NORTON, District of CYNTHIA M. LUMMIS, Wyoming Columbia MARK MEADOWS, North Carolina BONNIE WATSON COLEMAN, New Jersey RON DESANTIS, Florida MARK DESAULNIER, California MICK MULVANEY, South Carolina Vice BRENDAN F. BOYLE, Pennsylvania Chair JIM COOPER, Tennessee MARK WALKER, North Carolina MICHELLE LUJAN GRISHAM, New Mexico JODY B, HICE, Georgia EARL L. ‘‘BUDDY’’ CARTER, Georgia (V) CONTENTS Page Hearing held on: April 15, 2015 ................................................................................................... 1 Appendix: April 15, 2015 ................................................................................................... 67 WITNESSES WEDNESDAY,APRIL 15, 2015 Gianopoulos, Kimberly, Director, International Affairs and Trade, U.S. Gov- ernment Accountability Office ............................................................................. 13 Hochberg, Hon. Fred P., President and Chairman, Export-Import Bank of the United States ................................................................................................. 8 McCarthy, Michael T., Acting Inspector General, Export-Import Bank of the United States, accompanied by Mark S. Thorum, Assistant Inspector Gen- eral for Inspections and Evaluations, Export-Import Bank of the United States .................................................................................................................... 11 Sheets, Hon. Nathan, Under Secretary for International Affairs, U.S. Depart- ment of the Treasury ........................................................................................... 10 APPENDIX Prepared statements: Cartwright, Hon. Matt ..................................................................................... 68 Gianopoulos, Kimberly ..................................................................................... 70 Hochberg, Hon. Fred P. .................................................................................... 89 McCarthy, Michael T., and Thorum, Mark S. ................................................ 130 Sheets, Hon. Nathan ........................................................................................ 141 ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Heck, Hon. Denny: Written statement of a group of State Governors who support reauthor- ization of the Ex-Im Bank ............................................................................ 145 Huizenga, Hon. Bill: Article from The Wall Street Journal entitled, ‘‘Justice Department Charges Former Export-Import Bank Official With Bribery,’’ dated April 14, 2015 ................................................................................................ 149 Article from The Wall Street Journal entitled, ‘‘Officials at Ex-Im Bank Face Investigations,’’ dated June 23, 2014 ................................................. 152 Moore, Hon. Gwen: Slides pertaining to Ex-Im Bank ..................................................................... 155 Article from the Free Republic entitled, ‘‘Cruz under fire from Texas businesses (Export-Import Bank),’’ dated February 27, 2015 ................... 158 Written statement of the National Association of Manufacturers ............... 160 (VII) OVERSIGHT OF EFFORTS TO REFORM THE EXPORT-IMPORT BANK OF THE UNITED STATES Wednesday, April 15, 2015 U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MONETARY POLICY AND TRADE, COMMITTEE ON FINANCIAL SERVICES, JOINT WITH THE SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND ADMINISTRATIVE RULES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM Washington, D.C. The subcommittees met, pursuant to notice, at 10:01 a.m., in room 2154, Rayburn House Office Building, Hon. Jim Jordan [chairman of the Health Care, Benefits and Administrative Rules Subcommittee] presiding. Members present from the Monetary Policy and Trade Sub- committee: Representatives Huizenga, Mulvaney, Lucas, Pearce, Stutzman, Pittenger, Messer, Schweikert, Guinta, Love; Moore, Foster, Carney, Sewell, Murphy, Kildee, and Heck. Members present from the Health Care, Benefits and Adminis- trative Rules Subcommittee: Representatives Jordan, Walberg, DesJarlais, Gowdy, Meadows, DeSantis, Mulvaney, Walker, Hice, Carter; Cartwright, and Watson Coleman. Ex officio present: Representatives Hensarling, Chaffetz, Waters, and Cummings. Also present: Representatives Posey, Duffy, Blum, Clay, and Green. Chairman JORDAN. The subcommittees will come to order. We have interest from several of the members of the respective full committees who would like to participate. So I ask unanimous con- sent that those colleagues be allowed to fully participate in today’s hearing. Without objection, it is so ordered. I want to welcome our witnesses today. We will get to your intro- ductions in just a minute. But we want to start—and you know