Senator Elizabeth Warren has urged the chair of the Export-Import Bank of the United States (US Exim) to ensure it does not become “another piggy bank” for people connected to US President Donald Trump.
Speaking at a hearing of the US Senate Committee on Banking, Housing and Urban Affairs to discuss oversight of US Exim, Warren said the bank lacked “necessary safeguards against corruption”.
“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,” she said.
“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,” she said, adding that it risks becoming “another corrupt tool of this president”.
President Trump fired US Exim’s inspector general, Parisa Salehi, last year. A replacement in the role, which oversees how funds are spent, has not been confirmed.
John Jovanovic, US Exim’s president and chairman, testified before the committee on how US Exim can support the country’s exporters and critical supply chains, as he seeks to secure the organisation’s reauthorisation.
Under the Export-Import Bank Act of 1945, US Exim has to be reauthorised periodically in order to operate fully – including to approve new transactions. This happened when its charter lapsed back in 2015 and was not renewed until 2019.
The US Congress last extended its authority for seven years, which means the current period runs out after December 31, 2026.
Senators Mark Warner and Kevin Cramer introduced legislation in February to reauthorise US Exim for the next decade, which would be its longest reauthorisation in history.
During questioning, Warren asked Jovanovic to confirm that US 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 confirmed that “regardless of who you are…you face the same rules, the same process, the same criteria”.
Warren also pressed Jovanovic on Project Vault, the US$10bn supply chain security initiative between the US government and several private companies to store raw materials in facilities across the nation.
“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 favours to the Trump family or friends,” she said.
“Do you commit to sharing with Congress all of the term sheets, the contracts and the loan agreements [for] Project Vault?”
Jovanovic responded that “we’re going to give you all the information you need within the process to better understand what’s happening”.
SME support
Discussing the provision for smaller exporters, Warren noted that US Exim’s reauthorisation provides an opportunity to ensure the bank meets its goals of rebuilding the nation’s manufacturing base and shoring up key supply chains, as well as funnelling support to SMEs.
She asked Jovanovic if it was true that “only large, blue-chip manufacturers are included in Project Vault”.
It “couldn’t be further from the truth”, he answered. “The participation of blue-chip companies actually creates the credit profile in the entire Project Vault that will allow small and medium-sized companies to participate.”
“Project Vault is just the beginning of the set of solutions that we need. We need more stockpiling. We need more thought about resiliency. We need more support of small and medium-sized enterprises as they look to navigate these supply chains,” he added.
Jovanovic emphasised that US Exim has returned US$9.7bn to the US Department of the Treasury since 1992, while almost 90% of its total transactions support small exporters.
Senators also raised the lack of Democrats on US Exim’s board of directors, which currently comprises three Republican representatives. A total of five members can be appointed, with no more than three from the same political party.
Senator Raphael Warnock encouraged Jovanovic to “make a stronger effort” to secure a bipartisan board. “Without the White House actually nominating Democrats and honouring the historic bipartisan nature of many of these boards, they undermine your work, and the reauthorisation process, which I support, becomes difficult,” he said.
As well as asking Congress to reauthorise US Exim, and the China and Transformational Exports Programme – which supports exporters facing competition from China – Jovanovic is also asking for the “constraints” of the current default rate cap to be addressed.
Currently, if the default rate exceeds 2%, it limits US Exim’s ability to lend, which could mean its capacity for supporting riskier projects is curtailed.
Another request is for flexible hiring to enable US Exim “to recruit the specialised expertise required to execute increasingly complex transactions”.
Jovanovic added: “For the first time in 10 years, US Exim is projected to fully repay its appropriation. Even further, US Exim is on track to authorise more transactions and support more US jobs than in any year in its history.
“Our current pipeline includes more than US$71bn in active transactions spanning critical minerals, civil nuclear energy and advanced manufacturing.”
