The Ex-Im Bank’s mission “is to assist in financing the export of U.S. goods and services to international markets.” Essentially this means it provides low-interest loans or loan guarantees to foreigners to help them buy things from U.S. companies. In the deal described above, the Ex-Im Bank presumably would have helped NDTV finance its purchase of products and services from iGate.
This is where a former Bank official named Maureen Scurry, a.k.a. Maureen Edu, enters the picture. In 2006, the DOJ sent a letter to the Nigerian government requesting assistance in its investigation into Jefferson’s activities. Among the things DOJ requested were “Bank Records of accounts held by Maureen Scurry, also known as Maureen Edu, from January, 2003 to the present.”
The Nigerian government’s report back to DOJ included a summary of a statement that Scurry provided. According to Scurry, NDTV chairman Otunba Fasawe gave her a “gift” of $100,000 in early 2004. Scurry said this was to help pay for her brother’s cancer treatments. Scurry received the money after she arranged and attended a meeting with Jefferson, Jackson, Fasawe, and a member of the Ex-Im Bank’s board, but before the deal between iGate and NDTV fell through. In other words, Fasawe gave Scurry $100,000 at the height of Jefferson’s efforts to secure a U.S. taxpayer-backed loan for NDTV. And according to the indictment, Jefferson encouraged his partners in these schemes to dole out bribes as frequently as he asked for them.
Phil Cogan, a spokesman for the Ex-Im Bank, declined to comment for this article, except to say that the Ex-Im Bank has been and still is cooperating with the investigation. He told the New Orleans Times-Picayune last year that Scurry did work at the Bank during the period in question. He also told the paper that iGate never applied for or received a loan from the Bank.
Jefferson’s efforts to influence the Ex-Im Bank went beyond the deal between iGate and NDTV. According to the indictment, he continued to lobby the Bank on behalf of an investor he found to replace NDTV, which had pulled out of the deal in mid-2004. He also went to the Bank to obtain financing for a sugar plant in Nigeria for another businessman who was bribing him.
According to Ian Vásquez, director of the Center for Global Liberty and Prosperity at the Cato Institute, the Ex-Im Bank is vulnerable to these types of corrupt designs because it bases its lending primarily on political rather than financial calculations. “The Bank has always been an insiders’ game, so that lends itself to abuse,” Vásquez says. “If you look at the lending pattern, it really is an agency that is set up for people who are politically connected.”
Earlier this year, journalist Tim Carney reported that, “In fiscal years 1998 through 2005… 52 percent of Ex-Im’s money went to help just one company.” That company, Boeing, is one of the most powerful and well-connected firms in Washington.
Enron was another notable recipient of the Ex-Im Bank’s low-interest loans and U.S. taxpayer-backed loan guarantees. In a column published shortly after the energy-trading giant collapsed in 2002, Robert Novak reported that the Clinton administration had given “more than $650 million in Export-Import Bank loans to Enron-related companies.” Most of these loans went to Enron-owned overseas companies, which proceeded to purchase energy from Enron itself. Thus, the Bank facilitated a classic example of the style of accounting that now bears Enron’s name.
Vásquez says that, despite such well-publicized embarrassments, the companies that benefit from the Bank’s largesse have successfully prevented concerned taxpayers from shutting it down. “Nobody likes corporate welfare except the insiders who benefit,” he says, “and there have been coalitions in the past against corporate welfare that have tried to put an end to the Export-Import Bank, but they’ve failed. The resources on the other side have been too great.”
One might argue that if the collapse of Enron and the ensuing bad publicity for the Bank didn’t kill it, nothing will. But if the DOJ investigation of the Jefferson scandal uncovers more incidents of Bank officials taking bribes, its opponents in Congress might have the ammunition they need to go after it.
Their argument should be simple. The Ex-Im Bank, a relic of the Great Depression, has outlasted its usefulness. In a world that’s awash with private capital, projects that can’t find funding anywhere but the Bank probably shouldn’t be funded at all. Furthermore, the Jefferson scandal demonstrates the institution’s susceptibility to corrupt players who could never get the private sector to finance their schemes. Finally, as Vásquez puts it, “This is an agency that privatizes profits and socializes losses. Why would we want that?”
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