Government Watchdog Questions Export-Import Bank’s $75,000 Lease of ‘Luxury’ Vehicle

By Published on April 13, 2016

A new report from the Export-Import Bank’s independent watchdog questions whether a five-year lease of a “luxury vehicle” that cost the agency more than $75,000 qualifies as “essential” to the bank’s mission.

According to an audit conducted by the Export-Import Bank inspector general and released last month, the agency entered into a $75,622 five-year lease of a luxury vehicle intended to transport bank Chairman Fred Hochberg and staff. The bank was required to pay $1,131 per month over a period of 58 months, which included the cost of insurance.

The audit doesn’t describe what kind of vehicle Ex-Im leased. According to the watchdog, Ex-Im’s Office of Contracting Services provided the inspector general with justification for why the vehicle was leased. However, the agency watchdog said the office’s reasoning “did not address why this particular vehicle was ‘essential’ to the bank’s mission.”

The bank did not return The Daily Signal’s request for comment.

“Ex-Im’s chairman is famous for hitting the road, so I’m not surprised by what is in the inspector general’s audit,” House Financial Services Committee Chairman Jeb Hensarling said in a statement to The Daily Signal. “It’s no secret I’m disappointed Congress reauthorized Ex-Im, a flawed agency that clearly needs intense congressional oversight.”

Hensarling, R-Texas, and his committee have jurisdiction over Ex-Im, and he has been one of the bank’s leading critics.

In the report, Ex-Im’s inspector general also questioned why the bank leased a vehicle through a private vendor instead of the General Services Administration and why it paid a contractor for private insurance, since the federal government is self-insured. The audit called on the bank to further explain the costs associated with both the vehicle and insurance.

The inspector general said it will produce a report in the future exploring the bank’s lease of the car.

Ex-Im’s watchdog conducted the audit to determine if the bank was adhering to the federal regulations and guidance that govern its contracting processes.

In addition to questions surrounding Ex-Im’s lease of a luxury vehicle, the audit also found that the bank lacked the adequate internal controls needed to ensure the bank was adhering to federal contracting regulations.

Because of these issues, the bank made two duplicate payments totaling $304,462, which the bank recovered. It also spent $115,295, described as “unnecessary costs,” to train four contracted employees. The employees attended 14 Cisco training classes, which didn’t cover programs unique to the bank and instead provided them with skills “acquired in the general market place.”

Ex-Im provides taxpayer-backed loans and loan guarantees to foreign countries and companies for the purchase of U.S. products.

Hochberg and other bank officials faced scrutiny in the past for their spending. In 2014, documents obtained by the House Financial Services Committee showed Ex-Im officials exceeded their travel budget by $3 million from 2012 to 2014.

In 2012, the bank budgeted $1.7 million for travel expenses and ended up spending $2.7 million. In 2013, Ex-Im budgeted $1.2 million for travel and spent $2.2 million, and in 2014, the bank budgeted $1.3 million and expected its spending on travel to reach $2.3 million.

In response to the disclosure to the Financial Services Committee, Hochberg said travel was needed for both business development and to monitor “efforts associated with a particular transition.”

Though for the majority of the bank’s 81-year history it has existed largely without controversy, conservative lawmakers in the House and Senate have slowly begun to question its existence.

Arguing Ex-Im is an engine of cronyism and corporate welfare, lawmakers like Hensarling who opposed the agency successfully mounted a campaign to allow its charter to expire. After a short-term reauthorization extended Ex-Im’s lifespan from October 2014 to July 2015, the bank’s charter lapsed for nearly five months this summer.

Congress reauthorized the bank in December.

Copyright 2016 The Daily Signal

 

 

Print Friendly, PDF & Email

Like the article? Share it with your friends! And use our social media pages to join or start the conversation! Find us on Facebook, Twitter, Instagram, MeWe and Gab.

Inspiration
Absolute Surrender
Michelle Cushatt
More from The Stream
Connect with Us