U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

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

95–063 PDF 2015

EXAMINING THE EXPORT-IMPORT 

BANK’S MANDATES 

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 30, 2015 

Printed for the use of the Committee on Financial Services and the Committee 

on Oversight and Government Reform 

Serial No. 114–19 

Financial Services Committee 

Serial No. 114–32 

Oversight and Government Reform Committee 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

JEB HENSARLING, Texas, Chairman 

PATRICK T. MCHENRY, North Carolina, 

Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

ROBERT HURT, Virginia 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

MARLIN A. STUTZMAN, Indiana 

MICK MULVANEY, South Carolina 

RANDY HULTGREN, Illinois 

DENNIS A. ROSS, Florida 

ROBERT PITTENGER, North Carolina 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

KEITH J. ROTHFUS, Pennsylvania 

LUKE MESSER, Indiana 

DAVID SCHWEIKERT, Arizona 

FRANK GUINTA, New Hampshire 

SCOTT TIPTON, Colorado 

ROGER WILLIAMS, Texas 

BRUCE POLIQUIN, Maine 

MIA LOVE, Utah 

FRENCH HILL, Arkansas 

MAXINE WATERS, California, Ranking 

Member 

CAROLYN B. MALONEY, New York 

NYDIA M. VELA ́ ZQUEZ, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

PATRICK MURPHY, Florida 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JOYCE BEATTY, Ohio 

DENNY HECK, Washington 

JUAN VARGAS, California 

SHANNON MCGAHN, Staff Director 

JAMES H. CLINGER, Chief Counsel 

(III) 

SUBCOMMITTEE ON MONETARY POLICY AND TRADE

BILL HUIZENGA, Michigan, Chairman 

MICK MULVANEY, South Carolina, Vice 

Chairman 

FRANK D. LUCAS, Oklahoma 

STEVAN PEARCE, New Mexico 

LYNN A. WESTMORELAND, Georgia 

MARLIN A. STUTZMAN, Indiana 

ROBERT PITTENGER, North Carolina 

LUKE MESSER, Indiana 

DAVID SCHWEIKERT, Arizona 

FRANK GUINTA, New Hampshire 

MIA LOVE, Utah 

GWEN MOORE, Wisconsin, Ranking Member 

BILL FOSTER, Illinois 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

PATRICK MURPHY, Florida 

DANIEL T. KILDEE, Michigan 

DENNY HECK, Washington 

(IV) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK, MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Massachusetts 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MATT CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DeSAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

SEAN MCLAUGHLIN, Staff Director 

RACHEL WEAVER, Deputy Staff Director 

ANDREW DOCKHAM, General Counsel 

LAURA RUSH, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(V) 

SUBCOMMITTEE ON HEALTH CARE, BENEFITS & ADMINISTRATIVE RULES

JIM JORDAN, JR., Ohio, Chairman 

TIM WALBERG, Michigan, 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

CYNTHIA M. LUMMIS, Wyoming 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina Vice 

Chair 

MARK WALKER, North Carolina 

JODY B, HICE, Georgia 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

MATT CARTWRIGHT, Pennsylvania, 

Ranking Member 

ELEANOR HOLMES NORTON, District of 

Columbia 

BONNIE WATSON COLEMAN, New Jersey 

MARK DESAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

JIM COOPER, Tennessee 

MICHELLE LUJAN GRISHAM, New Mexico 

(VII) 

C O N T E N T S 

Page 

Hearing held on: 

April 30, 2015 ................................................................................................... 1 

Appendix: 

April 30, 2015 ................................................................................................... 59 

WITNESSES 

THURSDAY, APRIL 30, 2015 

Hochberg, Hon. Fred P., President and Chairman, Export-Import Bank of 

the United States ................................................................................................. 8 

APPENDIX 

Prepared statements: 

Hochberg, Hon. Fred P. .................................................................................... 60 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Chaffetz, Hon. Jason: 

Reuters article entitled, ‘‘US Ex-Im acknowledges errors in politically 

sensitive small biz data,’’ dated November 14, 2014 ................................. 70 

Heck, Hon. Denny: 

Letter dated April 16, 2015, from Hon. Fred P. Hochberg, President 

and Chairman, Export-Import Bank of the United States, in response 

to a question from Chairman Chaffetz at the April 15, 2015, hearing .... 72 

Letter dated April 24, 2015, from Hon. Fred P. Hochberg, President 

and Chairman, Export-Import Bank of the United States, in response 

to a question from Representative Hice at the April 15, 2015, hearing ... 83 

Moore, Hon. Gwen: 

Joint written statement of the Bankers Association for Finance and Trade 

and the Financial Services Roundtable ....................................................... 89 

Written statement of the U.S. Chamber of Commerce .................................. 91 

Letter from a group of State Governors in support of reauthorizing the 

Ex-Im Bank ................................................................................................... 111 

Hochberg, Hon. Fred P.: 

Written responses to questions for the record submitted by Representative Stutzman ................................................................................................ 115 

(1) 

EXAMINING THE EXPORT-IMPORT 

BANK’S MANDATES 

Thursday, April 30, 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 1:20 p.m., in room 

2154, Rayburn House Office Building, Hon. Bill Huizenga [chairman of the Monetary Policy and Trade Subcommittee] presiding. 

Members present from the Subcommittee on Monetary Policy 

and Trade: Representatives Huizenga, Mulvaney, Lucas, Pearce, 

Stutzman, Pittenger, Messer, Schweikert, Guinta, Love; Moore, 

Perlmutter, Himes, Carney, Murphy, and Heck. 

Members present from the Subcommittee on Health Care, Benefits and Administrative Rules: Representatives Jordan, Gowdy, 

DeSantis, Mulvaney, Walker, Hice, Carter; Cartwright, and 

DeSaulnier. 

Ex officio present: Representatives Hensarling, Chaffetz, and 

Waters. 

Also present: Representatives Massie, Blum, Green, and Ellison. 

Chairman HUIZENGA. 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 will come to 

order. That is quite a mouthful. 

Without objection, the Chair is authorized to declare a recess at 

any time. We all know that we have votes that are rather imminent. 

Because we are dealing with two subcommittees, we also have interest from our full committee Chairs and ranking members, as 

well. I will be giving an opening statement. We will then go to Ms. 

Moore from Wisconsin for her opening statement. Next, we will go 

to Mr. Jordan, and then Mr. Cartwright. At that point, we will go 

to Mr. Hensarling. If he is so moved to decline, that is fine. Ms. 

Waters is interested in having an opening statement. And then Mr. 

Chaffetz, if he so chooses, as well. 

2 

I would like to thank everybody for being here on this important 

issue. And to my friend, Mr. Jordan, I appreciate your willingness 

and eagerness to again hold a joint hearing to further examine the 

Export-Import Bank’s political mandates and its sordid past. 

The Export-Import Bank’s stated goal is to support American 

jobs through exports. However, in my opinion, judging by the 

Bank’s prior financing deals, it appears to be doing quite the opposite oftentimes. American taxpayers have been unwittingly propping up foreign state-owned companies in Saudi Arabia, Russia, 

China, Venezuela, Pakistan, India, Colombia, Mexico, Ethiopia, 

South Africa, and others who have done nothing but, frankly, work 

against the best interests of American citizens. 

In fact, of the 50 largest loans or guarantees approved by the ExIm Bank since Fiscal Year 2007, 46 percent of those by dollar 

amount of the loans have gone to foreign state-owned companies or 

a joint venture that includes a state-owned company. 

Additionally, the Export-Import Bank has a bit of an unsavory 

track record involving corruption, bribery, and fraud. Perhaps the 

most infamous example of illegal behavior is that of former Congressman William Jefferson, a Democrat, and a colleague of ours 

from Louisiana, who was raided by the FBI, convicted, and sent to 

prison for bribery, racketeering, and money laundering. You all 

may remember him better as the Congressman who stuffed his 

freezer with $90,000 in cold hard cash, literally. 

Jefferson was working with an Ex-Im employee, as well as an 

Ex-Im board member, to broker a deal between two Nigerian companies seeking financial support from Ex-Im Bank. This is just one 

example of how the political mandates for particular sectors and regions around the world have invited a culture of corruption by creating perverse incentives for the Bank’s staff to meet arbitrarilystated goals. 

While time has passed, it appears the culture within Ex-Im has 

not, unfortunately. Just last year, Ex-Im removed four employees 

for accepting gifts and kickbacks from companies seeking export financing. In fact, one of these former employees was charged by the 

Department of Justice a little over 2 weeks ago for taking bribes 

numerous times between 2006 and 2013. And he subsequently had 

pled guilty. 

This doesn’t appear to be an isolated incident, either. During our 

previous joint Ex-Im hearing held on April 15th, after more than 

2 hours of testimony, the acting inspector general of the Export-Import Bank announced that there are 47 people who have been convicted of defrauding the Bank in the past 5 years, and that there 

are at least 31 open investigations with the potential for even more 

indictments. 

The more that is unearthed about the Export-Import Bank, the 

more concerned I become. While the goals and objectives of the 

Bank might be admirable, the current state of the Bank is abhorrent at best. Why should Congress spend tax dollars on an organization that has reestablished a track record of corruption? And why 

should American tax dollars be used to finance foreign governmentowned or operated companies that compete against American workers? 

3 

A clean reauthorization which has been proposed by a few up 

here of the Bank does not propose taxpayers with the accountability that is expected from my constituents in Michigan or the 

overwhelming majority of citizens around the Nation. 

I look forward to hearing from you, Chairman Hochberg—and I 

do appreciate you being here, sir—about your plan to clean up the 

Bank and your plan to polish up its image and, frankly, your image 

as well, or it may close up shop. 

So with that, I would like to recognize my ranking member on 

the Monetary Policy and Trade Subcommittee, Ms. Moore of Wisconsin, for 5 minutes. 

Ms. MOORE. Thank you so much, Mr. Chairman, for yielding me 

the time. 

I would like to ask unanimous consent to enter into the record 

statements from the U.S. Chamber of Commerce, and the Financial 

Services Roundtable, as well as a letter from a group of State Governors. 

Chairman HUIZENGA. Without objection, it is so ordered. 

Ms. MOORE. Thank you so much. 

In relation to the reauthorization of the Export-Import Bank, we 

just keep hearing the buzzwords ‘‘regular order,’’ which makes me 

wonder, what kind of regular order is it for the authorizing committee—and maybe it is just pride in authorizing committee jurisdiction—the House Financial Services Committee to take this odd 

detour and basically kind of yield our authority over to the Oversight and Government Reform Committee? 

It is not that I don’t think like my friends on the Oversight Committee. But after hearing comments that ending the Bank is on 

schedule, from Oversight Committee members saying that ending 

the Bank is on schedule, I fear that this irregular order is a furtherance of a strategy of a minority of this body to end the Bank 

by just running out the clock. 

Now, what did we learn at the last hearing? We learned that 

people acted in criminal ways and targeted the Bank, and that the 

Bank’s internal controls work. And those people were discovered 

and punished, which is more than I can say for many of our Wall 

Street banks. If we need to throw more people in jail, let’s do it. 

Let’s not throw the baby out with the bath water. Let’s not throw 

the Bank out with those criminal elements. 

We learned that the Bank is a demand-driven organization that 

buttresses private finance to correct for imperfect markets for the 

benefit of small and large businesses, supporting a huge supply 

chain. People with—10, 15 people who make parts. 

We learned that the Bank does not compete for projects. Rather, 

it works with private finance, as the letters from the U.S. Chamber 

of Commerce and the Financial Services Roundtable will attest. 

We learned that the Export-Import Bank supported 164,000 U.S. 

export jobs in 2014. 

We learned that the Bank has a default rate that would be the 

envy of any Wall Street Bank. 

We learned that the Bank has implemented the reform from 

2012 and met the GAO requirements. 

We learned that there is nothing to the strawman accusation 

that some have leveled at the Bank. 

4 

I am so excited for the prospect of reauthorizing this Bank. I hail 

from Milwaukee, Wisconsin. We have been known as the machine 

makers of the world. And I can take you on a tour miles and miles 

and miles through my district on either side of the street and show 

you small—I mean teeny, tiny—machine shops and welders, some 

of them with 4 employees, some of them with 10 employees who 

are dependent upon reauthorization of this Bank for their survival. 

And I would hope that the majority of this body—and when I say 

‘‘majority,’’ I am not talking Republicans—the majority of those 

people who support the Bank, which is a—if people were honest 

and if they would vote their heart and vote their districts, we 

would have the votes. 

I would like to yield one minute to Mr. Heck. 

Chairman HUIZENGA. Without objection, the gentleman is recognized. 

Mr. HECK. I thank the gentlelady from Wisconsin. 

And before we begin, I would like us all to take a step back and 

remember why we have the Ex-Im Bank. We are indeed a country 

built on free markets. I take as much pride in that fact as the 

Chair of the full committee does. 

Because of that free market history, however, and despite its success, we know they are not perfect. Sometimes, like back in 2008, 

financial markets locked up and credit wasn’t available. Even in 

good times, small businesses often don’t have access to the financial tools that big businesses do, especially including export loans. 

In some parts of the world there are good customers but bad 

legal systems, so credit is not available. Even if there were no foreign competitors, we should still have an Ex-Im because markets 

still would not be perfect. There is still a need for something to 

help small businesses export, to help the developing world access 

credit to buy our goods. That is what these mandates do. Our faith 

in small businesses is why we have the Ex-Im. 

Thank you, Mr. Chairman. 

Chairman HUIZENGA. The gentlelady’s time has expired. 

With that, the Chair recognizes my fellow Chair, the Chair of the 

Subcommittee on Health Care, Benefits and Administrative Rules, 

Chairman Jordan, for 5 minutes. 

Chairman JORDAN. I thank the Chair. 

The gentlelady from Wisconsin asked the question, what did we 

learn 2 weeks ago, at the last hearing? I will tell you what we 

learned. We learned that Ex-Im Bank employee Johnny Gutierrez 

was indicted 36 hours before that hearing. He has now pled guilty. 

Last week, he pled guilty. 

We learned that there are 31 open fraud investigations that both 

the inspector general and the Department of Justice are looking 

into at the Export-Import Bank. 

And most importantly, what we learned from the inspector general, who sat in the same chair Mr. Hochberg is in today, is that 

there may be more indictments coming in the Gutierrez case and 

more indictments coming in those 31 open fraud investigations. 

That is what we learned. 

We also learned that the Administration has failed to meaningfully comply with the requirements passed by Congress and signed 

5 

into law as part of the Ex-Im Bank’s 2012 reauthorization. In fact, 

the Bank continues to resist reforms in that reauthorization. 

The focus of today’s hearing is on the political nature of the 

Bank’s portfolio. While all the Bank’s subportfolios have significant 

problems, I personally am most concerned with the Bank’s support 

of renewable energy. The Bank is mandated to dedicate 10 percent 

of its portfolio to support green energy exports. Here is the trouble. 

The entire market for U.S. exports of green energy technology is 

smaller than 10 percent of the Ex-Im’s portfolio. This creates the 

pervasive incentive at the Bank to rubber stamp green energy applications. 

Back in February 2011, the Ex-Im Bank authorized now-bankrupt Solyndra $10 million in guarantees during the same time period in which the company negotiated and restructured its 1705 

loan guarantee agreement with the Department of Energy. 

John Scott, former vice president of Solyndra, touted the expedited manner in which the Ex-Im Bank granted Solyndra the loan 

guarantee, just 41 days. He said this was ‘‘a fast due diligence 

process.’’ 

Ex-Im also made loans to several other companies that benefited 

from the Department of Energy loan program, including First 

Solar, which this committee investigated in 2012 and found to have 

significant problems. 

The green energy mandate also breeds cronyism and corruption. 

Earlier this year, the Washington Free Beacon reported that ExIm board member Diane Farrell left the Bank to join Azure Power 

after helping it secure $16 million in export assistance to help the 

company purchase solar panels from First Solar. Wow, isn’t that 

convenient. 

Recently, Michael Whalen was hired by the Bank as the vice 

president of structured finance. He comes from Solar Reserve, 

which had a junk bond rating, but still received $737 million from 

this Administration’s program that supported Solyndra and has 

has been a candidate for Ex-Im financing. 

There is Tom Kiernan. He joined the Bank’s advisory committee 

earlier this year, and he is also chief executive of the American 

Wind Energy Association, which represents many companies that 

have received financing from the Bank. 

The Ex-Im Bank is a perfect example of how big business and 

powerful special interests manipulate Washington to get their way. 

Senator Obama was exactly right in 2006 when he called the Bank, 

‘‘little more than a fund for corporate welfare.’’ 

Every Republican presidential candidate is against it. Every outside fiscal conservative group wants this Bank to go. The chairmen 

of the relevant committees in Congress—Chair Ryan of the Ways 

and Means Committee, Chairman Chaffetz of the Oversight Committee, Chairman Price of the Budget Committee, and Chairman 

Hensarling of the Financial Services Committee—support ending 

the Bank. 

The House majority leader supports ending the Bank. The House 

majority whip has also expressed opposition to the Bank. And the 

best part of all this is all we need to do is something Congress is 

pretty good at: nothing. Just don’t reauthorize it. It will naturally 

6 

unwind. All of the loans out there, the terms and conditions will 

be met, some of them as far out as 18 years. 

There is a story out today that the speaker has said we should 

look at this issue and make something happen. And I can remember an issue around this Congress a few years back where important folks said we could never end earmarks. And then along came 

this bridge to nowhere. And suddenly, Congress did what the 

American people wanted us to do and got rid of earmarks. 

I would say the same dynamic is in play here. The American people are fed up with corporate welfare. The bridge to nowhere of corporate welfare is the Export-Import Bank. And it is time it goes. 

And again, all we have to do to end this is to do nothing. Just let 

it wind down in its natural course. 

Mr. Chairman, I yield back. 

Chairman HUIZENGA. The gentleman yields back. 

With that, I now recognize Mr. Cartwright, ranking member of 

the Subcommittee on Health Care, Benefits and Administrative 

Rules for his opening statement. You have 5 minutes. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

And welcome again, Chairman Hochberg. I look forward to your 

testimony again. 

Today’s hearing is intended to examine the Ex-Im Bank’s operation under congressional mandates. These mandates include the 

requirement that no less than 20 percent of its authorization be 

used to finance exports by small businesses, and no less than 10 

percent to finance exports for renewable energy or energy efficiency 

technologies. 

The Ex-Im Bank’s transactions support billions of dollars in exports and hundreds of thousands of American jobs. With a default 

rate of just 0.174 percent, a default rate that I agree, Congresswoman Moore, would be the envy of most banks in the world, this 

Bank responsibly invests taxpayer funds, even generating a surplus to the U.S. Treasury. 

In Fiscal Year 2014, 89 percent of Bank transactions benefited 

small business exports of U.S.-made goods and services. Even when 

the Bank finances the purchase of exports from large corporations 

such as Boeing, you have to realize smaller companies benefit from 

this too. An example of this is Air Products, right in my district in 

northeastern Pennsylvania, which has two large plants in my district and employs hundreds of my constituents. This is a supplier 

of Boeing. 

The Bank is also active in promoting renewables, which will be 

essential in moving the world away from our fossil fuel dependence. 

In Fiscal Year 2013, the Bank supported almost $640 billion in environmentally-beneficial U.S. exports, nearly 60 percent of that for 

renewable energy. 

Just last week, the Bank celebrated Earth Day by presenting its 

deal of the year and renewable exporter of the year awards to Siemens Energy, Inc., for exporting wind turbines and helping the 

United States become an international leader in our renewable energy future. 

For most of its 80 years, the Ex-Im Bank has received support 

from both Republicans and Democrats and has been reauthorized 

without much debate 16 times. And I must mention that very reVerDate Nov 24 2008 12:32 Nov 13, 2015 Jkt 095063 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 K:\DOCS\95063.TXT TERI
7 

nowned Republican conservative commentators are in support of 

reauthorization of the Ex-Im Bank, including the noted conservative economist Douglas Holtz-Eakin, who says the numbers speak 

for themselves. This is a net plus for American taxpayers and ideology shouldn’t rule the day. 

In addition, just this afternoon, the speaker of the U.S. House, 

John Boehner, said this about the Ex-Im Bank, ‘‘There are thousands of jobs on the line that would disappear pretty quickly if the 

Ex-Im Bank were to disappear.’’ I read that from a political report 

from 12:25 p.m. today. 

And I ask unanimous consent that this be entered into the 

record, Mr. Chairman. 

Chairman HUIZENGA. Without objection, it is so ordered. 

Mr. CARTWRIGHT. So we have important Republican and conservative leaders speaking out in favor of reauthorizing the Ex-Im 

Bank, this supporter of so many hundreds of thousands of American jobs. But here we are 2 months away from the deadline to reauthorize the Ex-Im Bank, and the good old shutdown crowd has 

chosen to use this Bank as a political football. They have on their 

side powerful lobbying interests, such as Koch Industries, which 

this past March sent a letter to Congress urging Members to oppose the Bank’s reauthorization. 

And so when my friend Chairman Jordan laments the involvement of big business in this debate, we must never forget that the 

biggest driver of the folks who want to shut down the Ex-Im Bank 

are the Koch brothers. This is hugely ironic. This is just an example of the Kochs attacking renewable energy, while pushing their 

own agenda, which is fossil fuels. While the Koch-funded Americans for Prosperity demands that Congress put an end to the Bank, 

calling its work ‘‘corporate welfare,’’ Koch industries spent thousands lobbying against the President’s Fiscal Year 2010 budget 

proposal in part because it repealed a number of tax incentives for 

the oil and gas industry. 

We have to ask ourselves, what are our priorities? Where do they 

lie? Do we want to support American companies, American jobs, 

and American exports? Do we want to move toward clean energy 

and promote renewable exports, or do we want to kowtow to this 

political ideology that is clinging to old energy solutions that pollute our environment and the environment of the world? 

I hope today’s hearing will highlight the good work of the Bank. 

And I look forward to the testimony of Mr. Hochberg. 

I yield back. 

Chairman HUIZENGA. The gentleman’s time has expired. And 

thank you. 

Now, I would like to recognize our witness. I am pleased to recognize the Honorable Fred Hochberg, president and chairman of the 

U.S. Export-Import Bank. Thank you for being with us today, Mr. 

Hochberg. 

And I will now yield to Mr. Jordan, who will swear our witness 

in. 

Chairman JORDAN. Thank you, Chairman Huizenga. 

Pursuant to Oversight and Government Reform Committee rules, 

all witnesses will be sworn in before they testify. Mr. Hochberg, 

8 

you have done this several times before. Please rise and raise your 

right hand. Thank you. 

[Witness sworn.] 

Let the record reflect the witness answered in the affirmative. 

Thank you. And I yield back to the Chair. 

Chairman HUIZENGA. Thank you. Mr. Hochberg, you will be recognized for 5 minutes, and your entire written statement will be 

made a part of the record. 

With that, I recognize our witness for 5 minutes. 

TESTIMONY OF THE HONORABLE FRED P. HOCHBERG, PRESIDENT AND CHAIRMAN, EXPORT-IMPORT BANK OF THE 

UNITED STATES 

Mr. HOCHBERG. Thank you. Chairmen, ranking members, and 

distinguished subcommittee members, thank you for inviting me to 

testify today about the mandates that Congress has placed upon 

the Export-Import Bank. 

Ex-Im, as has been stated, is demand-driven. We are self-sustaining. We charge our customers interest and fees for our services. 

And the result? In 2014, we supported 164,000 jobs. On top of that, 

we have sent nearly $7 billion to the Treasury over the past 2 decades, making Ex-Im one of the few agencies that actually makes 

money for the taxpayers. 

We have been reauthorized 16 times by overwhelming bipartisan 

majorities. Over that time, Congress has provided oversight and 

added three mandates: one for small business; one for renewable 

exports; and one for sub-Saharan Africa. Mandates have directed 

Ex-Im to provide extra attention to these three areas. 

The first, a benchmark for small business, was added by Congress in 1983 under President Reagan’s first reauthorization of the 

Bank. Equipping U.S. businesses such as Fritz-Pak in Mesquite, 

Texas, or Tooling & Equipment in Livonia, Michigan, is at the 

heart of our work. 

In 2014, nearly 90 percent of Ex-Im’s transactions directly served 

small businesses, accounting for a full 39 percent of the total value 

of all exports supported by the Bank. 

This does not include the thousands of small businesses like 

Tomco that I visited in Loganville, Georgia, or Ace Pump in Memphis, Tennessee, that are part of the supply chains of larger exporters. These small businesses benefit each time a larger company 

beats out a foreign rival for a sale. 

To put this in perspective, Ex-Im has approved more transactions 

in the past 6 years for small businesses than the previous 16 years 

combined. As has been stated, even in strong economic times, small 

businesses have difficulty in securing the financing they need to 

support their exports. However, with Ex-Im’s help, banks are able 

to extend credit, giving U.S. exporters the liquidity they need to 

pursue sales, create new jobs, and compete effectively in global 

markets. 

Second, a requirement to address the environment was first initiated by Congress in 1989 under President Bush. This has been 

modified over the years, and is now a renewable energy export 

mandate. As a result, Ex-Im has equipped U.S. renewable exportVerDate Nov 24 2008 12:32 Nov 13, 2015 Jkt 095063 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 K:\DOCS\95063.TXT TERI
9 

ers to face off against competitors from China, Germany, and Denmark, to name just a few. 

In 1994, we completed 10 transactions; 20 years later, the total 

is 116 renewable exports. 

Third, a congressional mandate was established in 1997 to ‘‘promote the expansion of the Bank’s financial commitments to sub-Saharan Africa.’’ 

Ex-Im plays a critical role in countering China’s aggressive financing of their exporters. Last year alone, China exported $100 

billion to Africa. The EU topped that number. And the Americas 

came in at $38 billion. 

2014 was a record year for Ex-Im with $2.1 billion of financing, 

covering 192 transactions in sub-Saharan Africa. The Bank finances a higher portion of U.S. exports to sub-Saharan Africa than 

any other region of the world. 

In closing, Ex-Im takes its responsibility to protect the U.S. taxpayers very seriously. In those rare instances where there is a default, costs are covered by fees and interest paid to the Bank by 

our customers, not by taxpayers. 

The Bank’s focus on comprehensive risk management is reflected 

in its default rate, which we just reported to Congress, of 0.167 

percent. That was as of March 31, 2015. 

Ex-Im has continually improved its products and services to give 

entrepreneurs the tools they need to compete and win in the renewable energy sector in sub-Saharan Africa and against foreign 

small businesses. That means more U.S. jobs, and more American 

leadership abroad. 

I look forward to continuing to work with the committee on empowering your constituents to export, grow, and hire more American workers. 

[The prepared statement of Mr. Hochberg can be found on page 

60 of the appendix.] 

Chairman HUIZENGA. Thank you, Mr. Chairman. 

At this point, I will ask for unanimous consent that members of 

the Financial Services and Oversight and Government Reform 

Committees who are not members of either one of these two subcommittees be allowed to fully participate in today’s hearing. Without objection, it is so ordered. 

And with that, we will go to Health Care, Benefits and Administrative Rules Subcommittee Chairman Jordan for his 5 minutes of 

questioning. 

Chairman JORDAN. Thank you, Mr. Chairman. 

Mr. Hochberg, are you familiar with a 2010 Export-Import Bankapproved project in New Guinea? 

Mr. HOCHBERG. Sorry. I would need a little more information. 

Chairman JORDAN. I will give you some more. There were several 

partners in it, but the majority partner was Exxon Mobil, with a 

32 percent stake in this venture. Are you familiar with that deal? 

Mr. HOCHBERG. Oh, in Papua New Guinea, yes. 

Chairman JORDAN. Papua, New Guinea? 

Mr. HOCHBERG. Yes. 

Chairman JORDAN. You are familiar with that? 

Mr. HOCHBERG. Yes, I am familiar with that. 

10 

Chairman JORDAN. And do you recall how much of the financing 

the Export-Import Bank was responsible for in that deal? 

Mr. HOCHBERG. We financed about $3 billion. 

Chairman JORDAN. $3 billion. That sounds like a lot of money. 

Is that a big amount of financing for the Ex-Im Bank? 

Mr. HOCHBERG. That is a very large amount. 

Chairman JORDAN. Is it the largest in the Bank’s history? 

Mr. HOCHBERG. No, it is not. 

Chairman JORDAN. Was it the largest in the Bank’s history at 

that time? 

Mr. HOCHBERG. I believe it was up to that point. 

Chairman JORDAN. According to media reports it was the largest 

deal in Ex-Im history in 75 years and up to 2010. So what you are 

saying is, you have done bigger deals since then. 

Were there problems with the deal, any problems with that arrangement? 

Mr. HOCHBERG. This is a large project, in the range of $20 billion. It is proceeding. The cost is still in line with expectations. And 

it is my knowledge— 

Chairman JORDAN. So there are no problems? Are you saying 

there are no problems with the deal? 

Mr. HOCHBERG. Of course, there are problems. It is a $20 billion 

giant infrastructure project in a remote part of the world. 

Chairman JORDAN. How about this problem—your inspector general told Congress last June that the Bank couldn’t account for 

$500 million. Would you define that as a problem? 

Mr. HOCHBERG. Let me explain what the— 

Chairman JORDAN. My guess is the taxpayers would. So, the largest deal in Ex-Im history, largest deal in 75 years, $3 billion, 

and you can’t account for a sixth of it, and that is not a problem? 

Mr. HOCHBERG. $500 million is what is called ‘‘local costs’’ that 

are part of the transaction. We have— 

Chairman JORDAN. No, it is called ‘‘money.’’ It is called taxpayerfinanced money. 

Mr. HOCHBERG. We have certifications from Exxon Mobil that 

those costs were inline. And were incurred in the project— 

Chairman JORDAN. But you can’t account for it? 

Mr. HOCHBERG. We don’t have— 

Chairman JORDAN. Here is— 

Mr. HOCHBERG. We don’t have— 

Chairman JORDAN. Mr. Hochberg— 

Mr. HOCHBERG. —can’t account for it. 

Chairman JORDAN. I have 3 more minutes. So look, we learned, 

as I said in my opening statement, that an employee was indicted 

2 weeks ago. Last week, he pled guilty. We learned of 31 open 

fraud investigations that both the inspector general and the Justice 

Department are looking into. We learned at the last hearing that 

there may be more indictments coming from both the Gutierrez 

case and those open fraud investigations. 

And today, the committee now—I bet many Members are just 

learning for the first time that in the largest deal in Ex-Im history, 

a $3 billion deal, the Ex-Im Bank can’t account for one-sixth of it. 

You can’t account for $500 million in taxpayer-backed money, correct? 

11 

Mr. HOCHBERG. No, I would not agree with that, sir. 

Chairman JORDAN. That is what the press says, not me. The inspector general said you can’t account for $500 million. 

Mr. HOCHBERG. No. Exxon Mobil is entitled to local costs incurred on the project. 

Chairman JORDAN. But this project— 

Mr. HOCHBERG. They submitted certification for $500 million. 

What the inspector general has asked me, is he wants to see the 

actual invoices backing up the subsuppliers. 

Chairman JORDAN. And you don’t have it, right? 

Mr. HOCHBERG. We now require it. We did not require it at that 

time because we rely on— 

Chairman JORDAN. But the point is— 

Mr. HOCHBERG. —certification of a Fortune 500 company to provide that information. 

Chairman JORDAN. The point is that the inspector general said 

you can’t account for it. 

Mr. HOCHBERG. We can account for it. One-sixth of the deal—the 

fact is— 

Chairman JORDAN. Mr. Hochberg, I have a minute and 50 seconds. Let me say this, it gets worse. Before you approved the $3 

billion deal, the largest in the Bank’s history, before you lost onesixth of the money or can’t account for one-sixth of the money, before you can’t account for half a billion dollars of taxpayer money, 

you had four employees who, as they considered whether to approve the deal for Exxon Mobil, had their travel expenses paid for 

by Exxon Mobil. Isn’t that correct, Mr. Hochberg? 

Mr. HOCHBERG. Due diligence trips are paid for by the project 

sponsor. They don’t come out of taxpayer money. So they are paid 

for— 

Chairman JORDAN. Okay. Well, that is a nice way of saying it. 

I think the taxpayers would say the potential recipient of taxpayerbacked financing is paying for the travel of the very people who are 

going to decide whether they get taxpayer-backed financing. Such 

a deal, particularly when it is $3 billion, and particularly when you 

can’t account for one-sixth of that—$500 million. 

Mr. HOCHBERG. That money is not lost. That money is owed to 

us by Exxon— 

Chairman JORDAN. Do you know how much money Exxon Mobil 

spent for those four employees who weighed in on that decision, 

Mr. Hochberg? 

Mr. HOCHBERG. We sent engineers to do due diligence— 

Chairman JORDAN. No, no, no. That is not the question. You are 

not answering the question. How much money did they spend, 

Exxon Mobil, on these four employees who weighed in on the decision that ultimately resulted in half a billion dollars of taxpayer 

money going unaccounted for? Do you know how much? 

Mr. HOCHBERG. The decision is made by the board of directors. 

Chairman JORDAN. I will tell you. The press says—Bloomberg 

says $97,000—$97,367 for 4 employees. Now, that is over $24,000 

per employee. So guess where they went? Do you know where they 

went, Mr. Hochberg? 

Mr. HOCHBERG. They went to Papua, New Guinea. 

12 

Chairman JORDAN. Oh, and also London and Tokyo and the 

South Pacific. Paid vacations by the entity getting $3 billion, and 

you all can’t account for one-sixth of that money. And yet, you 

think we should just automatically reauthorize this Bank with people indicted, people who have pled guilty, and 31 open fraud investigations? 

Mr. Chairman, I yield back my last 2 seconds. 

Chairman HUIZENGA. The gentleman’s time has expired. And on 

that note, just because of the size of this, our timing with votes and 

those kinds of things, I am going to stick very closely to the 5- 

minute limit. I will allow people to end sentences and those kinds 

of things. But we are going to have to stick to that tight timeframe. 

With that, I will recognize Monetary Policy and Trade Subcommittee Ranking Member Moore for 5 minutes. 

Ms. MOORE. Thank you so much. I just want to point out that 

the bill that we have introduced really addresses many of the 

issues that you have just raised, Mr. Jordan. Title 5, strengthening 

project monitoring and due diligence. Section 501, enhanced monitoring and due diligence for structured and project finance transactions. And Section 502, monitoring plans and post-approval assessment for structured project finance transactions. 

And I just want to quickly ask, Mr. Hochberg, do you think that 

will strengthen their hand in terms of the due diligence? 

Mr. HOCHBERG. I actually do believe we have a good due diligence process at the Bank. And we increased our staff on asset 

monitoring in the last year by 33 percent to make sure we have 

even greater oversight of transactions. 

Ms. MOORE. I see that the ranking member has just arrived, so 

I am going to ask a really quick question, and then I am going to 

yield the balance of my time to her. 

I am really excited about the American business opportunities in 

Africa. I have been to Africa, and have seen some of the really terrible conditions under which these people live. And then all of a 

sudden, I will see this big infrastructure project that the Chinese 

built with their resources and their people. China has been in Africa almost since the day I was born. And trust me, I am old. 

Can you highlight efforts by GE and others to build infrastructure and open that market to Americans before we completely get 

shut out of Africa? 

Mr. HOCHBERG. As I mentioned, last year we did 192 transactions in sub-Saharan Africa. But let’s be clear, the European 

Union and China far outdistance anything that America exports to 

that market. 

That is, I believe, partly what was behind the mandate to encourage more companies to export there, to make sure they have 

the financing, so that we can support more jobs here at home. 

Ms. MOORE. And what does Africa have going for it? Three 

things: demographics; demographics; and demographics. There are 

an awful lot of people there who need energy, who need equipment. 

And I just don’t want to concede that all to the Chinese. 

I would like to yield the balance of my time to the ranking member of the full Financial Services Committee, Ranking Member 

Waters. 

13 

Chairman HUIZENGA. Without objection, it is so ordered. Ranking 

Member Waters, you have 2 minutes and 45 seconds. 

Ms. WATERS. Thank you very much. I would like to welcome 

Chairman Hochberg. 

Here we are gathered again to discuss issues that ignore the central fact that the charter of the Ex-Im Bank is set to expire in 26 

legislative days unless this body takes action. This is serious. And 

I can assure you that as eager and driven as some Republicans are 

to let the clock run out on the Export-Import Bank, there are others who are even more hopeful that they will succeed. That would 

be the roughly 60 other governments in the world, countries like 

China and Russia that would love to see the Ex-Im Bank disappear. 

The consequences of failing to reauthorize the Bank are real on 

our Nation’s competitiveness, on U.S. companies, and on the livelihoods of hundreds of thousands of American families who work so 

hard just to make ends meet. 

It is simply shameful that not one single commitment has been 

made by the chairman of the Financial Services Committee to take 

up legislation to reauthorize the Bank. 

I certainly agree with Speaker Boehner’s comments this morning 

when he said, ‘‘There are thousands of jobs on the line that would 

disappear pretty quickly if the Bank were to disappear.’’ To ensure 

this body gets a vote on the Floor, earlier today I joined Representatives Moore and Heck on the Financial Services Committee to initiate a discharge petition that would bring renewal legislation up 

for a vote in the House if the petition is supported by a majority 

of the Members. 

I urge all Members to sign on, especially my Republican colleagues, for whom this is a chance to stand up for American jobs 

and businesses by rejecting the vocal right wing of your party that 

I really don’t believe reflects the values shared by many of us here 

from both parties. 

What we are doing here today isn’t about oversight; it is about 

finding excuses. It is about making up reasons to delay actions. It 

is a disservice to the American public that expects and deserves 

better. 

Thank you. And I just want to reiterate to my Republican colleagues that no matter how much pressure you may be getting 

from certain quarters, no matter how much you fear your Chairman Hensarling, no matter how much you will tend to ignore your 

constituents, you have to stand up and you have to stand for something. 

You are adults. I don’t know why you would be hamstrung by 

one individual who would tell you what you can and what you cannot do. You were elected by the people to represent them. You 

ought to get about the business of doing it. I am sick and tired of 

this. 

And I yield back the balance of my time. 

Chairman HUIZENGA. The gentlelady yields back. 

At this point, it is my turn to have 5 minutes. And I am not 

going to ask permission of my Chair as to exactly what my questions are going to be, because I don’t fear him. I look at him as a 

14 

trusted colleague and someone whose advice I lean on and perspective I lean on. 

So, Mr. Hochberg, I appreciated your response from our last 

hearing on April 15th. At my request and Chairman Chaffetz’s request, you did provide a letter to us dated April 23rd, laying out 

some of the issues and some of your plans and some of the things 

that you have undertaken so far. 

On page four of the letter—I did read the letter, and I appreciated it—‘‘Workplace Environment’’ is the headline. ‘‘Although employee satisfaction with their workplace improved over 2013, favorable ratings were 40 percent below the government-wide average.’’ 

Those are not my words. Those are your words, acknowledging, 

I think, the commonly-known situation. 

We started to dive into it. And I want to explore it a little bit 

more. As we discussed, in this recent survey conducted by the Partnership for Public Service on the best and worst places to work in 

government, Ex-Im unfortunately ranked 26th and is literally dead 

last, 28 of 28, for effective leadership, is the category in the most 

recent survey of small agencies. In that, there was also an amazingly high fear of retribution for whistleblowers and things that 

came out of this. 

Additionally, according to the Bank’s own 2013 Federal employee 

survey, the Bank’s staff have little faith in the leadership. When 

asked if their organization’s leaders maintain high standards of 

honesty and integrity, only 42 percent said yes. 

When I asked you about this disturbingly low morale and faith 

in leadership, your response was, ‘‘We had a number of stresses on 

the agency, we were under construction for the past 2 years.’’ You 

highlight that on page four, as well, that the employees continue 

to work in a construction zone. You then moved on to say the renovated space is about 20 percent denser than the former space. Individual offices are smaller, and more employees are sharing open 

space. 

I have to tell you, when my staff read that, there was literally 

audible laughter. I don’t know if you have been in any of our offices. My office at 1217 Longworth—I invite you to come back to 

the palatial 213 square feet that encompasses my legislative shop, 

which five people share. That breaks down to 42.6 square feet per 

person. 

And it seems to me that this argument sort of lines up like saying well, I guess everybody who is in the Cannon House Office 

Building gets a pass from legislative duties because of the construction that is going on. Or since the Capitol is under construction and 

it is harder to get in and out of than normal, that somehow we are 

going to have this pass. And that just clearly isn’t the case. 

You said your top priority is to improve the workplace environment. Specifically, what is your plan to improve employee morale, 

besides you had mentioned having coffee and doing some other 

things like that. Personally, I don’t believe just having coffee hour 

with you is going to suffice. It seems to me the current course of 

action hasn’t been overly successful. So I would like to hear what 

you have to say. 

Mr. HOCHBERG. I thank you for bringing that up. And obviously, 

we are not happy with the ratings we have gotten. And we are 

15 

working to improve them. We have enumerated four goals for this 

year, one of which at the top of the list is to make Ex-Im a firsttier place to work. We have done a lot of management development 

and training. 

We had about 20, 25 of our senior leadership go through a 4-day 

professional development program. We are continuing that at different levels of the organization. We are doing more job rotation. 

We are doing a number of things. We are listening to our employees. When I say ‘‘coffee,’’ it is to listen to their concerns— 

Chairman HUIZENGA. I appreciate that. I have one minute left, 

and I do want to hit on one other thing and I am sure we will continue this. 

Why did the Bank approve a $75.8 million loan to a subsidiary 

of the state-owned Industrial Commercial Bank of China, when on 

April 23rd at your annual conference you said, ‘‘It isn’t easy going 

up against China, Russia, or anyone else to win export sales. The 

jobs come with them.’’ You stated, ‘‘More and more U.S. companies 

just aren’t competing against their counterparts in China, Japan, 

and elsewhere. They are forced to compete against China, Inc.’’ 

Why are we helping? 

Mr. HOCHBERG. Sir, it is a complicated world out there. Some 

countries— 

Chairman HUIZENGA. I am very aware of that. But why in the 

world are you helping China? 

Mr. HOCHBERG. Countries like China are both a competitor of the 

United States and a customer of the United States. Japan, Germany, and Korea are competitors and they are customers. So in 

some places we treat them as a competitor, and in other places we 

are selling them goods and services. China is the third-largest destination after Canada and Mexico for U.S. exports, and we cannot 

abandon that market. 

Chairman HUIZENGA. And to hold myself to my own rule, my 

time has expired. 

With that, I will recognize Health Care, Benefits and Administrative Rules Subcommittee Ranking Member Cartwright for 5 

minutes. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

Mr. Hochberg, I want to quote again the Speaker of the United 

States House of Representatives, John A. Boehner, who said that 

there are thousands of jobs on the line that would disappear pretty 

quickly if the Ex-Im Bank were to disappear. 

And that is what the Speaker of the House said today. Chairman 

Hochberg, have you seen that quotation? 

Mr. HOCHBERG. I have. Yes, I have. 

Mr. CARTWRIGHT. Is it true? 

Mr. HOCHBERG. Without question. 

Mr. CARTWRIGHT. Without question, it is true that thousands of 

jobs would disappear pretty quickly if the Ex-Im Bank were to disappear. Those are the words of Speaker Boehner. Do you agree, 

Mr. Hochberg? 

Mr. HOCHBERG. Last year, we supported 164,000 jobs in the 

United States. 

Mr. CARTWRIGHT. How important is it to you that we support 

those American jobs, 164,000 of them? 

16 

Mr. HOCHBERG. It is certainly important to those 164,000 people 

and their families and dependents. So that is a lot of families who 

are supported by these export jobs that we alone finance. 

Mr. CARTWRIGHT. And it appears to be important to Speaker 

Boehner, as well. So I commend him for those words. 

I also have to apologize. I find myself in a familiar position of 

having overstated the default rate of the Ex-Im Bank. The last 

time you testified I said it was 0.175 and you corrected me, it was 

0.174. Today, it is even lower. I said it was 0.174 today and, in fact, 

it is 0.167 percent, is that right? 

Mr. HOCHBERG. That is correct. That is the most recent report. 

Mr. CARTWRIGHT. Again, please accept my sincerest apologies for 

the slander. 

[laughter] 

I want to talk about renewables a little bit. Since 2002, Congress 

has directed the Ex-Im Bank to promote the export of goods and 

services related to renewable energy sources. Although it is not explicitly part of the Bank’s charter, since 2008 appropriators have 

included language directing the Bank to make available not less 

than 10 percent of its aggregate authority to finance renewable energy exports. 

Now, Chairman Hochberg, can you please describe how the the 

Bank finances renewable energy and environmentally-beneficial exports? 

Mr. HOCHBERG. Thank you. For one, we apply the exact same exacting credit standards for large transactions and small, for renewable transactions or other transactions. 

Renewable transactions—according to the Organisation for Economic Co-operation and Development (OECD), globally the United 

States and other export credit agencies can extend loans as long as 

18 years. 

And in fact, Jim Rogers, former chairman of Duke Energy, said 

just recently that we need export credit agencies essentially to finance power projects, conventional and renewable, because banks 

will only lend for 5 to 7 years. So we provide a longer term to make 

sure this capital equipment can be paid off. 

Mr. CARTWRIGHT. Can you describe in detail the procedures the 

Bank has in place to ensure that only well-qualified renewable energy projects are approved and taxpayers are protected? 

Mr. HOCHBERG. We do extensive due diligence. As Chairman Jordan referred to, we send people out into the field, engineers and 

underwriters, to actually see the project so that we are not just relying on a paper representation; we are actually seeing it with our 

own two eyes, walking the site. So we review that. 

We work with the State Department, and we work with Treasury, to make sure there are no violations. 

And on top of which, in the case of renewable, where they are 

often a 18-year loan, we require a 20-year power purchase agreement, so we know there is 20 years of cash flow, more than enough 

to satisfy the terms of the loan. 

Mr. CARTWRIGHT. Despite the mandate to devote at least 10 percent of your aggregate financing to renewable energy exports, the 

Bank has consistently fallen short of that target. Chairman 

Hochberg, why is that? 

17 

Mr. HOCHBERG. First of all, it is a target, it is not a quota. It 

is simply a target. And frankly, currently, the total amount of U.S. 

renewable exports last year was $1.4 billion. We would have had 

to finance essentially 150 percent of all U.S. exports in order to 

meet that target. So it is a target. It is not a quota. It is not 

someting we do anything unusual to reach. It is simply a target 

that is out there. 

Mr. CARTWRIGHT. So what steps is the Bank taking to increase 

awareness of the financing products that are available to qualified 

U.S. renewable energy and environmental exporting businesses? 

Mr. HOCHBERG. We have a team of people who actually do business development in that field. Most importantly is getting countries to have those 20-year power purchase agreements. We have 

done a lot of work in India because India will sign 20-year power 

purchase agreements so we can finance those kind of projects. 

India has been very good. In Latin America, we have done a lot 

of wind. In countries like Turkey, which only have year-to-year, we 

have done very little work because it is not financially—it can’t be 

financed properly. 

Chairman HUIZENGA. The gentleman’s time has expired. 

And with that, I recognize Mr. Mulvaney of South Carolina for 

5 minutes. 

Mr. MULVANEY. Mr. Hochberg, welcome back. I know that the 

Speaker of the House is very excited about the Democrat support 

he has today for his comments. 

And the comments that have been repeated here a couple of 

times are that, ‘‘But there are thousands of jobs on the line that 

would disappear pretty quickly if the Export-Import Bank were to 

disappear.’’ 

I think you stated already that you agree with that statement, 

correct? 

Mr. HOCHBERG. Yes, sir. 

Mr. MULVANEY. And you are hoping that we would rely on that 

statement in making a decision about reauthorizing the Bank to 

the tune of $130-odd billion, correct? 

Mr. HOCHBERG. Yes, sir. 

Mr. MULVANEY. Okay. By the way, when did you see this for the 

first time? 

Mr. HOCHBERG. Just a few hours ago, when it came out. 

Mr. MULVANEY. Before you got here, before you left to come over 

here? When did you see this the first time? 

Mr. HOCHBERG. I just got it at 12:29; it came out at 12:25. 

Mr. MULVANEY. All right. I would hate to think that you coordinated with the Speaker’s Office on this. 

Mr. HOCHBERG. I don’t think he coordinates with me. 

Mr. MULVANEY. Okay. So let’s go back to the statement, then. 

Because you want us to rely on it in making a $130 billion decision. 

Thousands of jobs on the line that would disappear. How many jobs 

would disappear, Mr. Hochberg? 

Mr. HOCHBERG. Last year, Congressman Mulvaney, as I mentioned, we supported— 

Mr. MULVANEY. —supported 164,000. I have heard that. But how 

many of those would go away if you went away? 

18 

Mr. HOCHBERG. It depends on what the demand for our services 

is next year. I obviously can’t predict it. It depends. We are demand-driven, sir. 

Mr. MULVANEY. You haven’t done any studies in your office as 

to how many of those jobs would go away if you cease to exist? 

Mr. HOCHBERG. No. We are demand-driven, sir. First, I believe 

we are going to reauthorize the Bank. 

Mr. MULVANEY. So you don’t know if it is 1,000 jobs that would 

disappear or 100,000 jobs that would disappear? 

Mr. HOCHBERG. The number of companies that rely on us for financing may be well boxed-out of foreign sales. 

Mr. MULVANEY. But you don’t know if it is at 1,000 or 100,000? 

Mr. HOCHBERG. Last year, we supported 164,000— 

Mr. MULVANEY. 164,000, yes, I have that one, Mr. Hochberg. We 

can skip that. 

But you don’t know. And when its says ‘‘pretty quickly,’’ that is 

pretty loose language, isn’t it? How soon would those jobs disappear, Mr. Hochberg? 

Mr. HOCHBERG. A lot of those jobs are in small businesses where 

we provide export credit insurance. And those policies will—anything written up to June 30th— 

Mr. MULVANEY. In fact, if you disappear, what is the longest loan 

you have on your books right now? Isn’t it like 20 years, 28 years, 

something like that? 

Mr. HOCHBERG. No, no. The longest loans we are allowed to 

make are 18 years. 

Mr. MULVANEY. 18 years. So if you disappear on June 30th, there 

is still going to be an Export-Import Bank presence supporting jobs 

for the next 18 years? 

Mr. HOCHBERG. But nothing new. Those jobs are— 

Mr. MULVANEY. How much do you spend to support a job, Mr. 

Hochberg? Do you know? Not create a job, by the way. Let’s make 

sure we understand each other’s language. We have never used the 

word ‘‘create.’’ You don’t use it, I don’t use it. You have never contended that you create jobs. You have always contended that you 

support jobs, which is a word that I have never fully understood. 

How much do you spend to support an American job? 

Mr. HOCHBERG. We are self-sustaining, sir. So we actually turn 

money over to the Treasury— 

Mr. MULVANEY. $125,000. You authorized, for those 164,000 jobs, 

about $25 billion in authorizations. That is about $125,000 a job. 

You are not very good at this, are you? 

Mr. HOCHBERG. No, no. We don’t cost any money, sir. There is 

a zero appropriation from Congress for the Export-Import Bank. 

Mr. MULVANEY. But your loan guarantees were $25-odd billion. 

And with that— 

Mr. HOCHBERG. And it supported— 

Mr. MULVANEY. —you paid for 164,000 jobs. 

Mr. HOCHBERG. It is paid for by the users of our services. 

Mr. MULVANEY. Right. 

Mr. HOCHBERG. They pay— 

Mr. MULVANEY. $125,000 a job. 

19 

Mr. HOCHBERG. They pay points on a mortgage—like points on 

a mortgage. And that is what it takes—the underwriting, due diligence. 

Mr. MULVANEY. Let’s talk about your small business jobs for a 

second. I used to be on the Small Business Committee, and we had 

a couple of different definitions for what was a small business. 

What was yours? 

Mr. HOCHBERG. What was my—say that again, sir? 

Mr. MULVANEY. What is your definition of a small business? 

Mr. HOCHBERG. For my definition of a small business, I rely on 

the Small Business Administration. They define it for us and the 

entire Federal Government. And it varies industry to industry. 

Mr. MULVANEY. It does vary industry to industry, that is right. 

Some places it— 

Mr. HOCHBERG. A dry cleaner has a different standard than a car 

dealership— 

Mr. MULVANEY. Absolutely. 

Mr. HOCHBERG. —or another manufacturer. 

Mr. MULVANEY. Is Bechtel a small business? 

Mr. HOCHBERG. It is a large company, sir. 

Mr. MULVANEY. Did you count it as a small business, Mr. 

Hochberg? 

Mr. HOCHBERG. Obviously, you are referring to a Reuters article 

in which some companies were miscategorized. It was about 3 percent of the total, sir; 97 percent were accurate. We had a 3 percent 

error. We ought to be at 100 percent, but we are striving to get 

there. 

Mr. MULVANEY. Let’s talk about mischaracterization. I like that 

word. Because it is not really lying, and it is not really telling the 

truth. Let’s talk about mischaracterization. 

If you look at the screen, sir, there is a graph that we have 

drawn up on your small business lending. In your last annual report, you said that 25 percent of your total authorizations went to 

small businesses. And that was an increase over the previous 2 

years. That is represented by the red line. Do you see that, Mr. 

Hochberg? 

Mr. HOCHBERG. I do. 

Mr. MULVANEY. Look at the total lending that you—the authorization that you did to small businesses. That is the light blue bar. 

Would you agree with me, sir, that you loaned less money or authorized less money to small businesses in 2014 than you did in 

2013, and less in 2013 than you did in 2012? Your small business 

authorizations have gone down for 2 years in a row. 

Mr. HOCHBERG. The mandate looks at a percentage of our authorizations— 

Mr. MULVANEY. I understand that. I am talking about—I am not 

talking— 

Chairman HUIZENGA. Time has expired. I will allow him to very 

briefly answer. 

Mr. MULVANEY. I can’t do it. Mr. Hochberg, it is always a pleasure. 

Mr. HOCHBERG. Thank you, sir. 

Chairman HUIZENGA. With that, I should make a note that votes 

have not been called yet. And I am monitoring and watching that. 

20 

But once votes have been called on the House Floor, we will recess, 

and allow Members to vote and come back. And I will make an announcement at that time, as well. 

With that, the Chair recognizes the ranking member of the full 

Financial Services Committee, Ms. Waters of California, for 5 minutes. 

Ms. WATERS. Thank you very much. There is oftentimes a lot of 

discussion about who is getting the support from Ex-Im. And there 

are those who would like to characterize it as subsidies for big 

business. Even though we have debunked that argument over and 

over again, I would like to get a better sense of how the Bank indirectly supports small businesses through the supply chains of the 

larger companies that you support. 

For one company alone, they support in my district 152 small 

and medium-sized companies. They are part of the supply chains. 

Have you ever tried to quantify the supply chain benefits of the financing you provide? How many suppliers, if you know, do the 

larger users of the Bank have across the country? If Congress fails 

to reauthorize the Bank, what impact will this have on the thousands of small suppliers across the country that indirectly benefit 

from the Bank’s support? 

And finally, am I the only one in the Congress of the United 

States or on the Democrat side who has all of these suppliers that 

benefit from the support of larger businesses by the Export-Import 

Bank? Could you help us out with that, some of this information? 

Mr. HOCHBERG. I am going to try. We work with a lot of suppliers. When Boeing or GE makes an export, they are really a system, they really are assembling a product. Just the way Ford 

Motor Company assembles automobiles. Ford doesn’t manufacture 

a car; it assembles them. 

I visited a company called Tomco right outside of Atlanta. They 

make fire suppression equipment. They are a small business. They 

supply to GE power turbines and export around the world. Because 

of that work, they are now getting strong enough that they want 

to start exporting directly. So sometimes, the supply chain helps 

them actually learn about those export markets. 

I visited a company called Click Bond in Nevada that provides 

essentially the—is used in Boeing to attach the skin to the structural support of the aircraft. There is a company called LMI in 

Saint Charles, Missouri, also in the supply chain. Small businesses, 

sometimes they are small machine shops. There is a company I visited called Ace Aerospace in Memphis. Same thing. These are small 

businesses that are directly supplying to larger companies and 

thereby exporting. 

It is hard to get a precise number, Ranking Member Waters. I 

think it is probably in the range of about another 10 percent of our 

small businesses are in that supply chain. 

Ms. WATERS. I would like to just share with you some information. It comes from my district, from—let’s take a look at Hanson 

Engineering Company. Hanson Engineering Company is one of the 

many small businesses. 

‘‘Dear Congressman Waters, Hanson Engineering Company is 

one of the many small businesses in the south Bay area of Los Angeles, California, that is dependent on Boeing contracts to support 

21 

our business. Hanson Engineering is a manufacturer of machine 

aerospace report parts and assemblies with 90 percent of our contracts supporting Boeing aircraft either directly or indirectly 

through our other prime aerospace companies throughout the 

world. 

‘‘My company staffs approximately 60 employees who live in the 

south bay and surrounding areas and depend upon the support of 

Boeing for the well-being of their families. Without the reauthorization of the Ex-Im Bank, it would have a big impact on the health 

of our business, its employees, and their families.’’ 

Mr. Hochberg, you need to know, and I think you do know that 

I have held several meetings in my district with small businesses 

who are directly benefiting from Ex-Im. But I have held meetings 

where the suppliers have come. And these suppliers have come to 

talk about how important it is to maintain their businesses. And 

even though they are small numbers of employers—60, 50, 40, 

what have you—they cannot understand what is going on in Congress and why anybody would put their businesses at risk this 

way. 

They wanted to know from me why my colleagues on the opposite 

side of the aisle and, particularly, the chairman, was so opposed to 

the support for suppliers through these companies. And I could not 

explain it. But I asked them to pay close attention. Because Mr. 

Hensarling, my chairman and my friend, has absolutely said he 

wants to close down Ex-Im. He wants it to go out of business. 

And so I think that he will probably reiterate that today, despite 

the fact that his leader has said to get something out of committee, 

do something, don’t let this Bank expire. And so everybody is waiting to see what Mr. Hensarling is going to say, what he is going 

to do, or whether he is out to just kill this Bank. 

I yield back the balance of my time. 

Chairman HUIZENGA. The gentlelady’s time has expired. 

And with that, we will let Financial Services Committee Chairman Hensarling have his say. 

Chairman HENSARLING. I thank the gentleman. Good afternoon 

to the ranking member. 

It is interesting, when you quote one part of the article. It is interesting what the headline is on the Reuters article concerning the 

speaker. The headline is, ‘‘Boehner says he would support U.S. ExIm Bank closure.’’ So that is what Reuters considers to be newsworthy in the speaker’s comments. 

Mr. Hochberg, as always, welcome. And again, you are always 

welcome in the Fifth District of Texas, which you have been kind 

enough to visit. Next time you come, perhaps I could suggest where 

the best cheese and onion enchiladas are to be found. It is Matt’s 

in Lakewood, by the way, should you come back again. 

You spoke about Ex-Im supporting 100,000-plus jobs. But it is interesting, because Delta Airlines says you are costing American airlines jobs. Cliff Natural Resources says you are costing American 

iron ore jobs. Valero says that you are costing American oil refining 

jobs. So that is a dubious claim on your part of ‘‘supporting jobs.’’ 

You say you return money to the taxpayers. According to the 

Congressional Budget Office, as you well know, if you use fair 

value accounting, main street accounting, that just about every 

22 

business which you ‘‘support’’ uses, you would be costing the taxpayer $2 billion over the budget window. 

With respect to the small businesses that the ranking member 

was kind enough to point out to me, well, here is a small business. 

Sonic Air Systems in Brea, California, 40 employees. Their owners 

said, ‘‘Ex-Im is arguably another form of corporate welfare.’’ I understand bigger companies want that cheaper money for their customers to buy planes and bulldozers, but should the taxpayers fund 

that? 

Here’s another small businessman, Chris Roofer from 

Morningstar company, also in California: ‘‘Ex-Im is a case study in 

corporation welfare. When a company profits from the Bank’s support, it pockets the money. If it defaults, taxpayer pockets get 

picked. It is private gain at the expense of public pain.’’ 

So that is the voice of small business that many of us are listening to, as well. 

I wish to follow up on a question that was asked by Chairman 

Huizenga. I still don’t quite get it. So Chairman Hochberg, you 

speak about China, Inc. You frequently talk about this and being 

competitive with China. We had an $18.4 million guarantee to the 

state-owned Ex-Im Bank of China in 2014. Ex-Im authorized $292 

million guaranteed for state-owned China Southern Airlines. In December of 2013, Ex-Im authorized $68.5 million for Semiconductor 

Manufacturing International, in Shanghai, also state-owned. A 

$300 million guarantee for state-owned ICBC Financial Leasing 

Company. 

Is it your assertion, Mr. Hochberg, that the best way to compete 

with China is to subsidize China? 

Mr. HOCHBERG. Congressman, we don’t subsidize any transaction. Customers pay a fee— 

Chairman HENSARLING. Well, Mr. Hochberg, I think the Congressional Budget Office has a different opinion. I will respect your 

opinion, but I am going to pay a little bit more attention to their 

opinion. 

Since we last spoke, as has been pointed out, at the time that 

you last appeared before us, Mr. Gutierrez had been indicted for 

accepting bribes. He has now pled guilty to 19 counts of bribery 

and kickbacks. 

According to the Partnership for Public Service—their survey of 

small government agencies has already been alluded to—your employees were asked whether they could disclose a suspected violation of any law, rule, or regulation without fear of reprisal, and 

only 50 percent said ‘‘yes,’’ which is a pretty staggering figure to 

me. 

Since you have taken the helm of Ex-Im, 65 matters have been 

referred to prosecution, 31 arrest warrants, 85 indictments, 48 

criminal judgments, decades of combined prison time, and a quarter of a billion dollars in fines, restitution, and forfeiture. 

And when we look at this same group of small government agencies, you are almost leading the pack when it comes to investigations and when it comes to indictments. At the end of the last fiscal 

year, I believe you had 41 pending investigations. The Farm Credit 

Administration had three. The Commodity Futures Trading ComVerDate Nov 24 2008 12:32 Nov 13, 2015 Jkt 095063 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 K:\DOCS\95063.TXT TERI
23 

mission had zero. The Pension Benefit Guaranty Corporation had 

24. 

And so when I look at all the various small agencies of which you 

are compared—I believe you have roughly 480-some-odd employees, 

is that correct, Mr. Hochberg? 

Mr. HOCHBERG. That is correct. 

Chairman HENSARLING. You didn’t quite get the gold medal. Apparently, that goes to the Railroad Retirement Board— 

Mr. HOCHBERG. —Chairman— 

Chairman HENSARLING. —but in the area of small agency— 

Chairman HUIZENGA. Sorry, Mr. Chairman. The gentleman’s 

time has expired. 

Chairman HENSARLING. Give me 5 seconds to wrap up. 

In the competition of corrupt and sordid matters, you clearly take 

the bronze medal. And should this agency be reauthorized, Mr. 

Hochberg, I hope you will spend less time traveling and lobbying, 

and more time running the Bank. 

I thank the chairman. I yield back. 

Chairman HUIZENGA. The gentleman’s time has expired. 

With that, the Chair recognizes Mr. Perlmutter of Colorado for 

5 minutes. 

Mr. PERLMUTTER. Good afternoon, Mr. Hochberg. It is deja vu all 

over again. Each year your organization makes loans to American 

companies to manufacture goods to sell overseas, which basically 

creates American jobs. 

And my friends on the Republican side of the aisle seem to not 

like small businesses that you loan money to, or medium-sized 

businesses that you loan money to. And I have listened to them 

today say they don’t like the loans to Bechtel, to Exxon Mobil, to 

Boeing. I don’t understand why they hate those companies. That 

makes no sense to me. 

Let’s talk about—Mr. Jordan cross-examined the heck out of you 

about this Papua, New Guinea, loan that has been made where 

Exxon Mobil is one of the partners in that job. You used the word— 

you took ‘‘certification’’ from Exxon Mobil. Can you explain that? 

He didn’t give you the opportunity to answer a single question. 

Mr. HOCHBERG. Thank you. Yes. Exxon Mobil was the project 

sponsor. They certified that the $500 million was incurred and expended locally. We rely on corporate officers. I don’t believe a corporation is going to commit fraud by sending us a false certification. They certified those numbers. And as a result, that money 

was loaned. That money will be paid back when the project starts. 

At this point, there is not a question in terms of that transaction. 

Mr. PERLMUTTER. So one of the biggest corporations in the world, 

Exxon Mobil, an American company, certifies to you, the lender— 

or the Export-Import Bank, the lender—that that money is going 

to get paid back? 

Mr. HOCHBERG. Correct. 

Mr. PERLMUTTER. Is that what they do? 

Mr. HOCHBERG. They certify the money is expended and that 

they then will pay it back when the project— 

Mr. PERLMUTTER. Okay. And as the lender, you rely on that kind 

of certification, do you not? 

24 

Mr. HOCHBERG. We did, as did all the other lenders in the consortium that was involved in the lending. Many other export credit 

agencies—we had the same rights as all the others had. 

Mr. PERLMUTTER. I look at the same thing that Mr. Jordan was 

asking you questions about. And they say the inspector general 

says in the aggregate, our inspection found that PNG LNG, which 

I guess is a liquid natural gas— 

Mr. HOCHBERG. Correct. 

Mr. PERLMUTTER. —facility transaction was well-structured and 

properly documented with Ex-Im Bank confident of full repayment. 

And you are confident of full repayment because you have sponsors 

like Exxon Mobil? 

Mr. HOCHBERG. Correct. 

Mr. PERLMUTTER. This is not some fly-by-night organization that 

is certifying to you, is it? 

Mr. HOCHBERG. No, it is not. 

Mr. PERLMUTTER. So his questions were really calling into question the integrity of Exxon Mobil? 

Mr. HOCHBERG. Correct. 

Mr. PERLMUTTER. All right. Let me ask you some other questions. You have said that the Bank loans money to American companies to manufacture goods to be exported, and that in loaning 

those moneys, companies to whom you have loaned money have 

164,000 people working for them, is that right? 

Mr. HOCHBERG. Throughout that supply chain. 

Mr. PERLMUTTER. So today, I came across something in 

Bloomberg News that as of today, there were 262,000 new jobless 

claims. That is the lowest number of new jobless claims since Bill 

Clinton was President—since April 15th of 2000. 

So is it your belief—and I know you were asked questions for 

specificity—that if you could not make loans to American companies, there would be additional job losses? 

Mr. HOCHBERG. Without question. Let me just say one thing, 

that we don’t actually make loans to American companies. We provide mostly loan guarantees, insurance. And frequently to their 

customers. But our financing— 

Mr. PERLMUTTER. Is what allows them to get loans or to— 

Mr. HOCHBERG. —and to support those exports and support those 

164,000 jobs. 

Mr. PERLMUTTER. I also want to let the record reflect that in that 

same article in Bloomberg News, today, under Barack Obama, 

there are 5.13 million jobs unfilled and about 1.7 million people unemployed. That is the highest number of jobs unfilled and the lowest number of unemployed people since Bill Clinton was President. 

And so something is going right using Export-Import Bank, as 

well as this Administration, in terms of getting people back to 

work. And my friends seem to want to undercut that. 

I yield back. 

Chairman HUIZENGA. The gentleman yields back. Just to inform 

everybody, votes have been called. They have just been called a moment ago. 

We are going to go to Chairman Chaffetz for his 5 minutes. After 

that, we will recess to allow Members to vote and come back. The 

joint hearing will reconvene upon conclusion of the vote series. 

25 

It looks like there are three votes, including a journal vote. So 

if you would do all of us a favor, find your whip and tell them 

whatever question they are asking you, we might get that journal 

vote canceled. 

So with that, Oversight and Government Reform Committee 

Chairman Chaffetz is recognized for 5 minutes. 

Chairman CHAFFETZ. Thank you. 

Mr. Hochberg, Ex-Im Bank is a Federal entity, right, created by 

Congress? 

Mr. HOCHBERG. Yes, it is. 

Chairman CHAFFETZ. So being a Federal entity, do you need to 

abide by the ethics, for instance, that are put forward by the Federal Government? 

Mr. HOCHBERG. And we fully do, sir. 

Chairman CHAFFETZ. Do you follow the travel policies put forward by the Federal Government? 

Mr. HOCHBERG. Yes, we do, sir. 

Chairman CHAFFETZ. Do you have the same travel policies as 

other Federal entities? 

Mr. HOCHBERG. We do, sir. 

Chairman CHAFFETZ. Do you ever allow Ex-Im employees to have 

their travel paid for by potential clients? 

Mr. HOCHBERG. For due diligence trips, if we have engineers or 

people actually verifying the work being done, that is sometimes 

paid for by a project sponsor, versus coming out of fees from the 

agency. 

Chairman CHAFFETZ. And you think that is consistent with Federal law and Federal employment practices? 

Mr. HOCHBERG. My understanding, and on the advice of counsel, 

is that is totally within the confines of the law, that we don’t 

incur—that those expenses are paid for by the actual project. 

Chairman CHAFFETZ. So that would be true for potential clients 

as well, correct? 

Mr. HOCHBERG. When we are doing due diligence before we approve a deal. Plus, we don’t want to expend funds on a deal that 

may not go through. 

Chairman CHAFFETZ. Will you provide to this committee a detailed listing for the last 6 years of what you have paid for and 

what has been paid for by outside entities? 

Mr. HOCHBERG. We can do that, sir. 

Chairman CHAFFETZ. When will you provide that to us? 

Mr. HOCHBERG. 2 weeks. 

Chairman CHAFFETZ. 2 weeks. Fair enough. I look forward to 

having that. 

I am going to go to a video here. One of the criticisms that we 

have is your characterization of small business. You claim and tout 

that you do so much for small business. In fact, your charter says 

that 20 percent is supposed to go to small business. 

Yet, as I look at that article from Reuters dated November 14, 

2014—I ask unanimous consent to enter that into the record. 

Chairman HUIZENGA. Without objection, it is so ordered. 

Chairman CHAFFETZ. You have given out some loans to some 

fairly large entities, have you not, that don’t fall in that category? 

Let me show you a video. Go ahead and show the video here. 

26 

[Video plays.] 

This is you in 2014. Oops. Sorry. We are going to recue that 

and— 

Mr. HOCHBERG. I am not good at lip reading. 

Chairman CHAFFETZ. I need some volume. 

This is you talking about SpaceX: 

‘‘Nearly 90 percent of authorizations directly serve small business, another historic high. Gaining access to global markets is 

what empowers small companies to become big companies. One of 

those is SpaceX. And tomorrow, you will be hearing from Elan 

Musk, the visionary CEO.’’ 

So you think that SpaceX, Elan Musk, is a small business? You 

think that SpaceX is a small business? How do you qualify SpaceX 

as a small business? 

Mr. HOCHBERG. I said small companies become large. In 2002— 

Chairman CHAFFETZ. And one of those is SpaceX. 

Mr. HOCHBERG. In 2002. 

Chairman CHAFFETZ. But with the time you are giving out—you are involved in loans, in 2013 and 2014, totaling $110 million, you 

categorize $2.5 million of those as small business authorized 

amounts. And they had employees in the neighborhood of 3,000 

people. So they may have been a small business when you weren’t 

involved with them. But when you did engage with them, they 

weren’t a small business, were they? 

Mr. HOCHBERG. When we characterize a company—it is when we 

make the authorization that we determine— 

Chairman CHAFFETZ. And you made the authorization in 2013 

and 2014. Were they a small business? 

Mr. HOCHBERG. No. We didn’t characterize them as one— 

Chairman CHAFFETZ. Yes, you did. You put $2.5 million on your 

listing of that. And this is a pattern. If you look at what Reuters 

has put out, you had more than—according to their analysis, more 

than 200 companies you categorized as small businesses that were 

not. These are businesses owned by GE, Warren Buffet, Carlos 

Slim. There is a lot listed out there. And if you look at this chart, 

there is the authorization. And you put roughly $2.5 million in the 

small business from a company that employed over 3,000 people. 

Mr. HOCHBERG. The data you are refer to from Reuters, there 

were 200 that— 

Chairman CHAFFETZ. No, I want to talk about SpaceX. 

Mr. HOCHBERG. SpaceX is not a small business. 

Chairman CHAFFETZ. But you categorized $2.5 million as a small 

business? 

Mr. HOCHBERG. I will have to look at that. That is not—if that 

is so, that is incorrect. 

Chairman CHAFFETZ. Go back then to Reuters. Is Reuters wrong? 

Mr. HOCHBERG. Reuters said—97 percent of the data was correct. 

We strive for 100 percent. Mr. Chairman, we strive for 100 percent, 

I ran a company. They found a 97 percent correct ratio. We have 

actually updated as of April 15th our applications to get better information so we can supply more information on small businesses. 

Chairman CHAFFETZ. I would appreciate 100 percent clarification 

if you would, sooner rather than later. You have overstated this 

case time and time again. We have seen lots of evidence of that. 

27 

With that, I will yield back to go vote on the Floor. 

Thank you. 

Chairman HUIZENGA. The gentleman’s time has expired. 

Okay. We are going to squeeze one more in. And with that, I recognize Mr. Green for 5 minutes. 

Mr. GREEN. Thank you. Mr. Chairman, I believe I heard you say 

Mr. Green from Texas, is that correct? 

Chairman HUIZENGA. Yes. 

Mr. GREEN. Thank you very much. And I thank the ranking 

member. 

I would like to yield now at this time to the ranking member of 

the Financial Services Committee, the Honorable Maxine Waters. 

Ms. WATERS. Thank you very much, Mr. Green. 

Chairman Hochberg, in our last joint subcommittee hearing on 

the Ex-Im Bank, a number of the Bank’s critics asserted that the 

Bank is a scandal-plagued institution, and have used this excuse 

to call for the expiration of the Bank’s charter in June. 

These critics have also misleadingly suggested that because there 

are pending investigations of external actors who were seeking to 

take advantage of the Bank, that this in some way reflects in every 

single case on the charter and integrity of the employees within the 

Bank. 

Can you help set the record straight here? Are most of the instances of fraud the result of external actors or Bank employees? 

Do most indictments of external actors result in subsequent indictments of Bank employees, as well? What policies and procedures do 

you have in place to minimize fraud by Bank employees, as well 

as the broader public? 

Mr. HOCHBERG. Thank you, Ranking Member Waters. 

Frankly, in addition, the inspector general said and told me that 

no Bank employees are involved in third-party fraud cases he is 

currently investigating. The 31 cases he is investigating are outside 

companies that tried to defraud the government of funds and loans. 

So these are outside companies. Frequently, they are identified by 

our employees who have seen something wrong. But he has also 

said at the current time, he does not believe there is any—he has 

no reason to believe and he does not expect any indictment of the 

Ex-Im employees. 

Ms. WATERS. What evidence do you have to support the view 

that Ex-Im has a strong culture of high ethical standards and integrity? 

Mr. HOCHBERG. The evidence I would support is the fact that— 

and the case we have discussed here, this hearing with Johnny 

Gutierrez—first, it began in 2006: A, before we had an inspector 

general; and B, under President Bush. It came to light in this Administration. And he has been indicted and has pled guilty. 

And a case like that and others are brought to the attention of 

either the general counsel or the inspector general by employees 

who see something that does not look proper and, therefore, warrants further investigation. 

Ms. WATERS. I guess you may have alluded to it, but would you 

agree that the inspector general’s aggressive approach to going 

after individuals who seek to defraud the Bank is actually indicative of a system that works? 

28 

Mr. HOCHBERG. Without question, I think it is a message to everybody when someone like Johnny Gutierrez is not only indicted, 

but pleads guilty, and probably will be sentenced shortly. 

Ms. WATERS. Okay. There are a couple of things that have been 

said here today in discussion and questions by the Members. Would 

you please recite your percentage of defaults that you have? Because I don’t think that has been heard. 

And you were actually accused in one of the conversations by one 

of the Members of having—I think he alluded to you having high 

default rates or something. Would you straighten that out for us? 

Mr. HOCHBERG. Absolutely. We report our defaults, as the last 

charter required, as one of the requirements and mandates of the 

last charter, every 90 days. We just sent a report this week for the 

period through March 31st. And it is currently 0.167 percent. It is 

actually less than one-fifth of 1 percent. 

Ms. WATERS. And I must say something about SpaceX. It happens to be in my district. And many Members of Congress on both 

sides of the aisle have commended Mr. Musk and have saluted his 

accomplishments and have talked about how futuristic he is in 

talking about travel. 

I just want to say that I am pleased at the relationship that 

SpaceX has with Boeing and that they are able to supply some of 

Boeing’s needs. And it all works very, very well. 

Would you just conclude that SpaceX is a good investment and 

deserves support by Ex-Im? 

Mr. HOCHBERG. We are very proud to support SpaceX. They are 

competing tooth and nail against a French-government backed, and 

Russian and Chinese-launched vehicles. So frankly, this is really 

good for America. There are, I believe, about 8,000 employees at 

SpaceX right now, plus a very vast supply chain. 

Ms. WATERS. And lastly, I would like to commend you for going 

out into America and visiting companies to learn more about who 

they are and what they do so that it will enhance your ability to 

make decisions. And so I don’t think you can do your job without 

getting out and going to these companies and understanding what 

they do. 

So whatever happens—and I think we are going to reauthorize 

this Bank—I want you to keep going out into America and seeing 

what these companies are all about. 

Thank you. And I yield back the balance of Mr. Green’s time. 

Chairman HUIZENGA. The ranking member yields back. The gentleman’s time has expired. 

With that, votes have been called. We will recess to allow Members to vote and come back. The joint hearing will reconvene upon 

conclusion of the vote series. And the subcommittees stand in recess. 

[recess] 

Chairman HUIZENGA. We will let Mr. Hochberg get seated here 

and then we will reconvene. 

So with that, I would like to gavel back in our subcommittees. 

I now recognize Mr. Carter of Georgia for 5 minutes. 

Mr. CARTER. Thank you, Mr. Chairman. 

Mr. Hochberg, thank you for being here again. I believe we saw 

you not too long ago. And as a follow up of the question that I had 

29 

asked you earlier that I just didn’t get the answer I was looking 

for, and I want to make sure I understand. And I am going to try 

to be as succinct as I can and ask you to do the same. It is a pretty 

simple yes-or-no question. 

And the question is, does the Ex-Im Bank, in any instance, 

whether you are lending money or whether you are guaranteeing 

a loan or whatever, do you ever participate in a loan that results 

in a lower interest rate than would be available on the open market? 

Mr. HOCHBERG. Congressman, what we do is we provide a guarantee. So the banks will determine what the interest rate is. We 

don’t determine it. So we make a guarantee, the bank pays essentially an insurance premium to us for a guarantee. And then they 

set the interest rate. We don’t— 

Mr. CARTER. Okay. Wait. Yes or no, do you ever participate in 

a loan that results in a lower interest rate than would be available 

on the open market? 

Mr. HOCHBERG. Probably in the few cases we do a direct loan, 

they might be. They are intended to replicate the market. But 

could be above, or it could be below. It is an imprecise measurement. 

Mr. CARTER. So I am going to take that as a yes. 

Mr. HOCHBERG. I would say sometimes yes, sometimes no. I— 

Mr. CARTER. If it is any time yes, that is where I have a big problem, let me tell you. Because in my mind—and you correct me if 

I am wrong—the Ex-Im Bank should be a source of last resort. 

Mr. HOCHBERG. Right. 

Mr. CARTER. Is that correct? Is that the way you understand it? 

Mr. HOCHBERG. That is exactly the way we run the Bank, sir. 

Mr. CARTER. Okay, so whenever someone applies for a loan, is 

that part of the process when you approve a loan? Is it, ‘‘We have 

been to three banks before and they wouldn’t approve it and you 

are our last resort?’’ 

Mr. HOCHBERG. That is correct. 

Mr. CARTER. That is correct. Because you are using the full backing of the United States Government to guarantee a loan or to lend 

money. And that, in my mind, has a price that goes along with it. 

I am a small businessman. I own three independent retail pharmacies. When I go to the bank, I do not get the same interest rate 

that a big company gets. And I understand that. I recognize the 

reason for that. 

But this is what is bothering so many people in my mind is that 

we hear stories about companies that are utilizing the Ex-Im Bank, 

and it is resulting in a lower interest rate than what they could 

get on the open market as a source of last resort. That is not the 

way that it is supposed to work. 

Mr. HOCHBERG. I think what we are referring to is loans that are 

made to buyers of U.S. goods. So when a buyer has a choice between goods from the United States or Japan, China, Germany, 

you name it, all of those export credit agencies charge the same 

rate. We all charge the same rate because we want to have a level 

playing field, to let people choose the best product. 

30 

Mr. CARTER. But again, the point that I am trying to make—and 

I think you understand it—is that as a lender of last report, that 

means that the price is higher. 

Now, if I could—and you and I have spoken before and you know 

where I am coming from, because you know that I am interested 

in the fact that you continue to say that you are returning a billion 

dollars to the U.S. Treasury. And I like that. Because to me, again, 

as I have said before, the national debt of $18 trillion, even more 

than that right now, is the greatest threat to our national security 

that I know of. And that concerns me. 

And I want to do something to try to get that down. I hate to 

throw the baby out with the bath water. And I don’t want to do 

that. If you are generating a billion dollars—and I understand 

what the critics have said. They have said well, if you had to use 

the same accounting principles that are being used by the other 

banks, it wouldn’t be that way. Well, you are not having to use the 

same accounting principles. 

So if you are truly returning a billion dollars, I want to know— 

I don’t want that to go away. And truthfully, I think you can do 

better. I am here to tell you I don’t think you are doing your job 

well enough. If you were to charge the interest rate that is due to 

someone who is getting a loan as a result of being the last resort, 

then it ought to be more. 

Mr. HOCHBERG. Sir, our job is to support U.S. jobs. That is first 

and foremost. And when we are making—providing a loan guarantee or a direct loan for a foreign buyer to buy U.S. goods, we are 

charging the same interest rates as, say, the French ECA, the Germans, and others. The Chinese may charge even lower. But we are 

trying to keep competitive so we support the jobs here. That is our 

mandate. Our mandate is about jobs, not— 

Mr. CARTER. I understand you are trying to be competitive. But 

my point, again, as I have said before, is that as a lender of last 

resort, that comes with a price. And I don’t care what China is 

charging. If you have a company that comes to you, and you are 

their last resort, it ought to be more. 

Mr. HOCHBERG. Frequently, the extra cost comes into the fees 

that are required, like points on a mortgage. On some of those 

projects, we may charge 12 cents on the dollar in terms of fees. So 

the interest rate may be low, but the fees are very high in order 

to— 

Mr. CARTER. I understand that. But you can go up on the fees 

so that the interest rate comes out— 

Chairman HUIZENGA. The gentleman’s time has expired. 

Mr. CARTER. Thank you, Mr. Chairman. I yield back. 

Chairman HUIZENGA. With that, the Chair recognizes Mr. Heck 

of Washington for 5 minutes. 

Mr. HECK. Thank you very much, Mr. Chairman. 

Chairman Hochberg, thank you so very much for being here. Indeed, thank you for your public service, sir. 

I think most of us have a fairly firm grasp, or at least an intuitive grasp, about how it is Ex-Im interacts with larger businesses. 

But I think it would be instructive for this conversation for you to 

elaborate a little bit on how they interact with smaller businesses, 

be it traffic cones or mint extract or pickles. And the products. 

31 

And the reason I am asking this question is I have been involved 

in a lot of these conversations. And it always seems like an ‘‘aha’’ 

moment when they realize it is not always just a direct loan that 

fuels sales and growth. So maybe you can talk briefly about those 

products, sir. 

Mr. HOCHBERG. Certainly. For our small business clients, the two 

products they primarily use, though not exclusively, is credit insurance, which is similar to fire and theft insurance, where they get 

insurance to cover their overseas receivables so they can ship 

goods. Like Jenny’s Pickles, as an example. They will make the 

shipment on an open account and get paid, say, 60 days later. So 

that is one product we provide. And many insurance companies 

have very high minimums and they won’t take some of these small 

clients. 

The other one is working capital loans. We provide a working 

capital loan for a number of companies whereby they get the cash, 

we guarantee a bank up to 90 percent to induce the bank to make 

that working capital loan so that they can buy the raw material so 

that they can essentially assemble the goods, and extend the credit 

to their customer. 

Those are the two primary products we provide to small businesses. 

Mr. HECK. So do you apply the same standard of, that those 

products must be—you must be the last resort for those products, 

as well? 

Mr. HOCHBERG. In both cases, both the insurance—usually, an 

insurance broker is bringing us in and saying okay, can I use the 

private sector or Ex-Im? So they are working with their broker to 

do so. 

It is the same with the bank. The bank, if they could make the 

loan on their own, they would. They only call us in, frankly—there 

is additional paperwork, additional transparency, and additional 

scrutiny when you work with a government agency. So if the bank 

can do it on their own, they prefer to do it on their own. They come 

to us when the risk level is just outside of their normal risk parameters. 

Mr. HECK. So, Mr. Hochberg, that begs the obvious question 

about some of these working capital loans. It is my understanding 

that these are generally for 1 year? 

Mr. HOCHBERG. Generally speaking, they are for 1 year. 

Mr. HECK. And if the Bank expires on June 30th and if these 

working capital loans are of the last resort and therefore have been 

made available only through you, what is going to happen to those 

small businesses when they hit the 365th day? And do you have 

any sense about the number who currently have working capital 

loans? 

Mr. HOCHBERG. The working capital loan—I will give you one example, actually, in Ranking Member Waters’ district, a company 

called Ceilings Plus owned by a woman named Nancy Mercolino. 

She provides the ceiling to the Doha Airport. She used our working 

capital loan to support that export, because she had to assemble all 

that material, ship it over to the airport, get it installed, and then 

get paid. She needed the working capital to keep that company 

32 

going. And she has been a very extensive user of our working capital loan. 

On the 365th day, the problem is we would not be there to guarantee that loan. And that has made a number of banks very anxious about extending working capital loans while this bill is being 

debated, because they don’t want to be in a position when they 

don’t want to have a—they are concerned about how that company 

will pay back that working capital loan when we are not there to 

guarantee it. 

Mr. HECK. Do you think there would be a consequence to employment levels for those companies? 

Mr. HOCHBERG. I do. And I will read you a quote from a customer, Don Nelson, who was on the letter the U.S. Chamber of 

Commerce sent. And he said, ‘‘This is Don Nelson, from ProGauge 

Technologies in Bakersfield, California. Nobody is going to take the 

place of Ex-Im. We are already working with a private bank. Without Ex-Im, we wouldn’t have the collateral required for our project 

and revenues would go down by about 75 percent. I would have to 

lay off between 50 and 60 people. Ex-Im is critical to our business.’’ 

Mr. HECK. I am glad you referred to some of those addendum 

quotes to the letter from the Chamber. Because it is not clear to 

me that those were necessarily entered into the letter with the 

broader letter. But some of them are very instructive. They are all 

basically small businesses. 

And I just might point out that we are virtually on the eve of 

national small business week next week. A couple I found particularly instructive, for example, A.J. Rose Manufacturing in Ohio: 

‘‘We have used Ex-Im loan guarantees to build our business for engine parts. Normally, banks will not extend loans to cover a small 

company’s overseas orders. But Ex-Im’s guarantees allow us to do 

that. With those guarantees, we exported an additional $2.7 million 

in engine parts and hired 19 people.’’ 

Davenport Aviation, low and behold also in Ohio: ‘‘We are in 

turbo growth right now and we need cash. Cash life cycles can be 

long when dealing with markets in developing countries.’’ It was 

Ex-Im that he points to as the reason for the success and the 

growth. 

NOSHOK, Inc.—I am pretty sure I butchered that—also from 

Ohio: ‘‘Ex-Im provides loans, loan guarantees, et cetera. It helps 

level the playing field for U.S. companies seeking new sales in 

fiercely competitive global markets. I urge Congress to support ExIm’s swift reauthorization.’’ 

Nearly 90 percent of your activity and transactions are for small 

businesses on the eve of national small business week. I literally 

pray that we reauthorize the Bank. Thank you. 

I yield back the balance of my time. 

Chairman HUIZENGA. The gentleman’s time has expired. 

With that, the gentleman from North Carolina, Mr. Pittenger, is 

recognized for 5 minutes. 

Mr. PITTENGER. Thank you, Mr. Chairman. I yield to the chairman of the full Financial Services Committee, Chairman Hensarling. 

Chairman HENSARLING. I thank the gentleman for yielding. 

33 

Chairman Hochberg, you have been speaking about Ex-Im’s mandates. So we have mentioned the green energy mandate, the renewable mandate, the sub-Saharan small business. 

But you also have guidelines on high carbon intensity that many 

have dubbed the ‘‘no-coal rule.’’ In the Bank’s press release dated 

December 12, 2013, you said, ‘‘I strongly support the Administration’s efforts to build an international consensus such that other 

nations follow our lead in restricting financing of new coal-fired 

power plants. 

Now, as opposed to your other mandates, the no-coal mandate, 

Congress did not vote on that, correct? 

Mr. HOCHBERG. Congress voted on an environmental standard 

that was put in 23 years ago into our charter, sir. 

Chairman HENSARLING. Okay. Where did the no-coal policy come 

from? Because you were the one who announced that on December 

12th, 2013. It had not previously been imposed, correct? 

Mr. HOCHBERG. We actually support coal mining equipment, we 

support coal exports, we support coal-fired power plants in poor 

countries. 

Chairman HENSARLING. Well, in poor countries. But in other 

countries, you do not. So I understand the asterisk. But the bottom 

line is you, and I assume your board, unilaterally made the decision not to support the other coal financing projects, correct? 

Mr. HOCHBERG. The board reviewed it and— 

Chairman HENSARLING. Did Congress vote on it? 

Mr. HOCHBERG. The Congress voted an environmental standard. 

The Bank— 

Chairman HENSARLING. So that is where you draw your authority from? 

Mr. HOCHBERG. The Bank was sued under the Bush Administration for not applying the environmental standard sufficiently. And 

in the consent agreement— 

Chairman HENSARLING. Oh, I know there are lots of groups that 

sue frequently. So I understand that. But the bottom line is Congress did not pass a standard to prohibit you from financing coalfired projects. 

Mr. HOCHBERG. Congress passed a statute that we had to take 

the environment into account. And we were sued— 

Chairman HENSARLING. Okay. So you also talked about how this 

leads to a question of balance, I think is the word. Yes. You said, 

‘‘The Bank engages in an important balancing act in supporting 

our exports, and weighs potential impacts of the environment associated with our financing.’’ 

So if you and the other board members decide to do another important balancing act, you can make other decisions. For example, 

to have a no-petroleum policy, I presume. I understand what Congress passed with their renewable mandate. But that is not the 

mandate we are talking about, is it? 

Mr. HOCHBERG. We actually support the oil and gas industry. It 

is one of our largest— 

Chairman HENSARLING. No, but you could make the decision 

based upon the earlier authorization. And as you have decided to 

essentially do a no-coal policy, you could make the decision to do 

a no-petroleum policy. 

34 

Mr. HOCHBERG. We don’t have a no-coal policy, sir. 

Chairman HENSARLING. Okay. With the exception of poor countries. How about a mostly no-coal policy? The bottom line is Congress didn’t authorize it, Mr. Hochberg. You decided to do it. 

Mr. HOCHBERG. Congress put it in our charter 23 years ago. The 

Bank was sued before I got there. And part of the consent degree 

before I got there was— 

Chairman HENSARLING. Okay. Well, again, you were the one who 

came out with the statement. So I am just asking you to think 

about this particular hypothetical. Coming from Texas, it could be 

that November after next, we may be, at least in my state, celebrating the election of either President Perry or President Cruz. 

And say we appoint a new head of the Ex-Im Bank and new board 

members. At that point, I assume nothing would prevent that head 

of the Ex-Im Bank giving the authority you have assumed to say 

that Ex-Im Bank can no longer offer assistance to build any clinic 

that intends to provide abortions. 

Under the same authority, I assume then the Bank could decide 

it will no longer provide assistance to countries that limit Second 

Amendment rights because maybe somebody sued the Ex-Im Bank. 

Maybe they decide that they will no longer extend credit to countries that have debt-to-GDP ratios worse than ours, although I 

don’t think there are many on the list at the moment. 

So again, this is not a congressional mandate. This is one that 

you and the board decided to do. And I just wanted to point out 

to all Members that once Ex-Im assumes this authority, it is Katybar-the-door on self-imposed mandates of political lending, ideologically-based lending. And that can cut both ways. That is the main 

point I needed to make. 

Mr. Chairman, I thank the gentleman from North Carolina. And 

I yield him back his 1 second. 

Mr. PITTENGER. And I yield back. 

Chairman HUIZENGA. And the gentleman’s time has expired. 

Seeing no Democrats at this time who have not been recognized 

for the first round, we will go to Mr. Gowdy from South Carolina 

for 5 minutes. 

Mr. GOWDY. Thank you, Mr. Chairman. Chairman Hochberg, I 

was a very mediocre lawyer in a previous life. But I was mediocre 

for a long time, which means I got to watch lots and lot of juries. 

And I look in 2012 and I see that 330 Members of Congress voted 

to reauthorize the Bank. And now I talk to my colleagues. And 

trust me when I tell you this, it is on life support. 

So how in the course of 3 years could you go from a three-to-one 

majority in the people’s House and then be on life support? What 

happened? 

Mr. HOCHBERG. Sir, I am not sure I am in the position to answer 

that question— 

Mr. GOWDY. If you can’t answer that question, then you might 

as well call the coroner. You are the one that people are going to 

be looking to. 

So let’s start with this. I think you will agree with me that there 

are three categories of folks, generally. There are folks who are 

going to be opposed to the reauthorization for very principled reasons, many of whom are my friends. They have just—they have 

35 

made up their minds. And there are going to be folks who are going 

to vote for reauthorization no matter what. No matter how many 

indictments, no matter how many anything. 

And then there is a group in the middle who would like to vote 

for reauthorization, provided there was some reforms. And that is 

the group in 2012 that gave you a 330-person vote. So I think what 

they are looking for is, how are you doing on the reforms? How did 

you do for the last 3 years on the legally-mandated reforms? 

Do you agree that Chairman Hensarling is a reasonable person 

who would be open to factual persuasion? 

Mr. HOCHBERG. He is smiling. I will let the chairman decide that 

question. 

Mr. GOWDY. No. I am asking you. Because you have Chairman 

Hensarling, you have Chairman Ryan, you have Kevin McCarthy, 

all of whom—even though I am on the opposite side of the issue 

from them, I find them to be open to factual persuasion, or at least 

they will give me an audience, they will at least let me make the 

case. 

So what is the case that you did what Congress asked you to do 

in 2012? 

Mr. HOCHBERG. When I was here just 2 weeks ago, I enumerated 

every reform that was put in, in 2012. And I enumerated—and I 

am happy to do again—each report and each change that was 

asked for and the date we did that. So we have complied with each 

and every reform of the 2012 reauthorization act. 

Mr. GOWDY. All right. I want to just start with one reform that 

I remember a lot of my colleagues discussed, which is the eventual 

goal of winding down the Ex-Im Bank. 

Mr. HOCHBERG. That responsibility was given to the Secretary of 

the Treasury. 

Mr. GOWDY. Who, by the way, was among the most dreadful witnesses from whom I have ever had the displeasure of hearing testimony. And he, honestly, right now is the best argument against reauthorization. So I am glad that he is not with you. 

Can you make the case that Treasury has done what we asked, 

that it is a high priority that the Bank be wound down? 

Mr. HOCHBERG. I can say the following, sir. I am actually meeting with—I have met with my colleagues just about a month ago, 

I am meeting with some more colleagues in the next 10 days, to 

talk about exactly that subject. Because I have decided I take the 

will of Congress seriously. I am talking to my colleagues about 

what do we do about winding this down. 

Mr. GOWDY. You can count as well as I can count. And 330 was 

a good, strong vote. Now, we are struggling to get to 218. And if 

you do get to 218 this time and the reforms are not implemented 

that lots of my colleagues want to see implemented, then it won’t 

even be close in a couple of years. 

So I don’t mean to put undue pressure on you, but the follow up 

from the Treasury is not going to help. Unless they send somebody 

else from the Treasury, that one is not going to help. You are going 

to have to make the case sometime between now and the expiration 

date of how you are doing what Congress asked you to do in 2012. 

Mr. HOCHBERG. All the reforms that this committee has asked us 

to do at Ex-Im Bank—and there were more than a dozen—we have 

36 

complied with, whether it is the Federal Register, whether it is a 

full report to Congress, whether it is an expansion in textiles. Each 

one of those reforms, I enumerated at this committee hearing 15 

days ago— 

Mr. GOWDY. Okay. But Mr. Chairman— 

Mr. HOCHBERG. —Treasury Department, it is outside of my authority. 

Mr. GOWDY. I am with you. But you and I are watching the jury 

together. And we have gone from 330 to life support. So we can 

quarrel and quibble over whose responsibility that is. Maybe the 

Treasury. Maybe not the Treasury. But you have to make a really 

compelling case between now and the expiration date or we may 

not get to 218. 

Mr. HOCHBERG. We do have—Congressman Fincher has a bill 

with close to 60 cosponsors. Ranking Member Waters has a bill 

with 190 cosponsors. There are 250 on those two different bills. 

They are not identical, but 250 cosponsors between those two bills 

just to start with. 

Chairman HUIZENGA. The gentleman’s time has expired. 

Mr. GOWDY. Yes, sir. 

Chairman HUIZENGA. Again, seeing no colleagues on the Democrat side who have not had their opportunity to ask a question in 

the first round, we will go to Mr. Schweikert of Arizona for 5 minutes. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. 

And some of the mechanical questions. Let’s do something that 

we would find interesting, or some of us would. Discuss with me 

the definition you would use for ‘‘impairment’’ of both guaranteed 

debt and actual debt you have extended. Because you keep using 

‘‘default.’’ And I am not after default. I am asking, what is impairment? Is it when there is a violation of reps and warrants, when 

a payment is delayed? Give me a definition of what you use as impairment. 

Mr. HOCHBERG. We report our defaults to Congress. 

Mr. SCHWEIKERT. I am not asking defaults. One more time. Impairment, just like every other institution has to do with when 

there is a violation of reps and warrants. I have already looked 

through the statements. And you used some very interesting definitions. So walk me through why your definitions are so different 

than the rest of the world. 

Mr. HOCHBERG. When we issue a default report to Congress— 

Mr. SCHWEIKERT. Not default. One more time. Impairment. 

Mr. HOCHBERG. In that report, we have an aging report. We have 

amounts that are overdue, that are not in default, they may be in 

technical default. 

Mr. SCHWEIKERT. Okay. So when I looked at your report and I 

started saying, here is my violation of reps and warrants, where do 

I find that line on there? 

Mr. HOCHBERG. I will have to get back to you on that. 

Mr. SCHWEIKERT. When I go through your reports and I look for 

where I find the number of folks who—excuse me—the number of 

debt you have outstanding that have missed a payment, are delayed in the payment or have not fully paid the payment, where 

do I find it? 

37 

Mr. HOCHBERG. We have an aging report that is— 

Mr. SCHWEIKERT. Not aging. 

Mr. HOCHBERG. This indicates when someone is in arrears: less 

than 30 days; 60 days; 90 days; or 150 days. 

Mr. SCHWEIKERT. And within there, I can see where it is saying 

this is part of the scheduled agreement within the reps and warrants— 

Mr. HOCHBERG. No. They are overdue. 

Mr. SCHWEIKERT. Okay. So when you are marking it as a 30-day 

delay, that is absolute impairment on there? 

Mr. HOCHBERG. That is impairment. But then we are looking— 

Mr. SCHWEIKERT. So if I were to look at your complete loan book 

right now of everything, what is your actual percentage of all impairments and all reps and warrants violations? 

Mr. HOCHBERG. I will get back to you. I am not going to, I don’t 

want to speculate— 

Mr. SCHWEIKERT. —it borders on almost sort of a fraudulent discussion around here when we say well, we only have this percentage of default, but if I had a money center bank here, you all know, 

all of you from the banking business, we would not be talking 

about default. We talk about impairment on the book. 

Mr. HOCHBERG. The report we send to you, sir, GAO has approved that it is consistent with congressional intent and we are 

following the law. So we are reporting— 

Mr. SCHWEIKERT. Okay. No, no, no, no. I look forward to you 

going through it and walking me through the numbers. Because I 

have dug. I have a 5-hour flight home. I have taken your stuff and 

dug and tried to understand where—because it doesn’t look the 

same as every other money center institution I would look at how 

they would provide me with that data. 

Could you walk me through just a couple of other mechanics, just 

so I understand? How much of your book right now is direct loans, 

and how much of is it actually enhancements, guarantees? 

Mr. HOCHBERG. I will give you a number off the top of my head. 

I don’t have that number memorized. 

Mr. SCHWEIKERT. Okay. Just give me your best guess. 

Mr. HOCHBERG. Roughly speaking— 

Mr. SCHWEIKERT. And I won’t hold you to it. 

Mr. HOCHBERG. Roughly speaking—and I will confirm this in 

writing—it is about 10 percent of our loans are direct and the rest 

are guarantees. 

Mr. SCHWEIKERT. Okay. So I am holding 90 percent over here are 

enhancements. Now, on much of the enhancements you are doing, 

you are doing actually 90 percent of the liability ladder? 

Mr. HOCHBERG. No. Well, banks pay us a fee. They pay essentially an insurance fee— 

Mr. SCHWEIKERT. Look, everyone in this room understands mortgage insurance and those things. And so we are all familiar. So you 

are covering the top 90 percent of the liability? 

Mr. HOCHBERG. No. We provide a 100 percent guarantee. 

Mr. SCHWEIKERT. Oh, you do a 100 percent guarantee? 

Mr. HOCHBERG. And they pay a fee for that. 

Mr. SCHWEIKERT. Okay. So unlike any other loan enhancement 

I have ever heard of, you are guaranteeing 100 percent—actually, 

38 

the American taxpayers are ultimately guaranteeing 100 percent of 

that. Now, on your syndication, do you do any syndication of that 

risk? 

Mr. HOCHBERG. Currently, we are part of larger syndications, 

but— 

Mr. SCHWEIKERT. Okay. But— 

Mr. HOCHBERG. —our loan book, we do not syndicate our loans. 

Mr. SCHWEIKERT. No, no, no, no. I only have, like 40 seconds— 

Mr. HOCHBERG. We do not— 

Mr. SCHWEIKERT. —I wish we had more time because this is— 

Mr. HOCHBERG. I would be happy to come to your office— 

Mr. SCHWEIKERT. But the syndication of your risk to private entities is how much of that 90 percent of your book? 

Mr. HOCHBERG. The loans that we guarantee, we guarantee 100 

percent of those loans to foreign buyers. 

Mr. SCHWEIKERT. That wasn’t the—how much of then that 90 

percent, on the 90 percent, are you syndicating the risk to outside 

entities? 

Mr. HOCHBERG. We do not syndicate to outside entities. 

Mr. SCHWEIKERT. Why? 

Mr. HOCHBERG. We have— 

Mr. SCHWEIKERT. There is a vibrant syndication market out 

there of doing enhancements. So remember, there is another 99 

percent of our Nation’s exports that go out with surety bonds, and 

other types of exports credit. So there is this robust world out there 

happening. Why aren’t you reaching out and participating in some 

of that? 

Mr. HOCHBERG. Because generally speaking, we are in the deal 

because the private sector cannot— 

Mr. SCHWEIKERT. Even if you were taking part of the ladder of 

risk, they wouldn’t participate? 

Chairman HUIZENGA. The gentleman’s time has expired. 

Mr. SCHWEIKERT. I’m sorry. I know I am over, Mr. Chairman. 

But it is an interesting question of why they don’t participate. 

Thank you, sir. 

Chairman HUIZENGA. Thank you. We are hoping to do a second 

round, so if you want to stay close, you might have another chance. 

With that, we will go to Mr. DeSantis of Florida for 5 minutes. 

Mr. DESANTIS. Thank you, Mr. Chairman. 

Good morning, Mr. Hochberg. I noticed that Ex-Im beneficiaries 

have donated to the Clinton Foundation. Was there any communication between Hilary Clinton when she was Secretary of State 

and you or your staff about any authorizations? 

Mr. HOCHBERG. Not that I recall. 

Mr. DESANTIS. Would you be able to check and get back to us 

about that on the staff level? 

Mr. HOCHBERG. We would be happy to. 

Mr. DESANTIS. Okay. Thank you. The survey in 2013—I think 

you have been asked about this at previous hearings. But 50 percent of the employees at the Bank said that—only 50 percent said 

they were free to disclose a suspected violation of any law, rule, or 

regulation without fear of reprisal. 

39 

Do you think that that culture is problematic and is linked to 

some of the instances that have been discussed where there may 

be impropriety? 

Mr. HOCHBERG. In each case where there has been some impropriety—and let me remind everybody that in all but four cases, 

they are outside of the Bank, they are customers and companies 

trying to defraud the U.S. Government—they were identified by 

and large by employees who saw something that was suspicious 

and brought it to someone’s attention. 

Mr. DESANTIS. Very well. Understood. People were going to try 

to look at different data about the Bank earlier in this year. Because I guess you had listed the Bank with the funds. But then the 

data was removed without warning. So one, what was the reason 

for that? And two, has the data been put back up? 

Mr. HOCHBERG. All of the data has been put back up. It was 

down for about 21⁄2 weeks. This was a government regulation that 

goes back to 2007–2008 where we posted data, and it came to our 

attention that a customer, an exporter, felt that there was too 

much business confidential information on the Web. We took the 

data down, reviewed it, and we made adjustments so we would not 

hurt any U.S. exporter, at the same time trying to be transparent. 

And so we are trying to balance those two. 

Mr. DESANTIS. Understood. The Ex-Im authorized more than 

$450 million in loan guarantees for First Solar, which I guess was 

selling, as I understand it, solar panels to itself. So how do those 

transactions and that setup benefit U.S. exports? 

Mr. HOCHBERG. Every transaction that—if there is a related 

part, they are all done at an arm’s length transaction. This was a 

company set up in Canada. It was a special purpose vehicle (SPV) 

that was then going to sell power to the Canadian grid. That was 

approved by the Bank. In fact, at the end that bank, we did not 

disburse that loan. That loan, the project was able to secure private 

sector financing, which we were happy to do. And so we never implemented that loan. 

Mr. DESANTIS. There has been talk with the impending reauthorization that if the Bank is not reauthorized, you have a lot of transactions that have been done, and that somehow the jobs linked to 

Ex-Im financing are ‘‘at risk.’’ 

But as I understand it, if the Bank is not reauthorized, that does 

not shut down any of the current streams of financing that have 

already been authorized, correct? 

Mr. HOCHBERG. Well, yes. If we have authorized a loan, we have 

made a firm commitment and we will execute that. We will not do 

any new loans. 

Mr. DESANTIS. Exactly. So any of the jobs that are specifically 

linked to the financing that has already been done, if people are 

saying that it is going to cost jobs, they have to put that aside and 

show how without having the Bank operating, originating new 

loans, then how that would cost jobs. But you can’t say that the 

jobs that are linked to the current financing are going to be in jeopardy, is that correct? 

Mr. HOCHBERG. Right. The quote I read about Don Nelson in 

California said that he would have to lay off between 50 and 60 

people if Ex-Im Bank Bank is not there. That is just his quote. 

40 

Mr. DESANTIS. But what he is saying is that he wants to have 

the financing for future deals. 

Mr. HOCHBERG. For future transactions. 

Mr. DESANTIS. And he is, I guess, implying that there will not 

be financing on the private market for those transactions. And I 

think that is a matter that is subject to dispute. I know you would 

probably agree with him. I know many members of the panel would 

think that you may see that. 

But I appreciate your testimony. I have a little bit of time left, 

but I will go ahead and yield back, because I know some people 

want to get in round two. 

Chairman HUIZENGA. The gentleman yields back. 

And again, seeing no new Members on the Democrat side of the 

aisle, we will continue on the Republican side with Mrs. Love of 

Utah for 5 minutes. 

Mrs. LOVE. Thank you, Mr. Chairman. 

I have a couple of questions. I am new here, so you are going to 

have to help educate me on some of these things. Is it your goal 

to wind down the Bank so that the private sector can participate 

in some of the export finance? 

Mr. HOCHBERG. Our goal is to fill in gaps in the private sector. 

During the financial crisis, we were called to do more of that. 

Mrs. LOVE. Did you ever talk about winding down the Ex-Im 

Bank? 

Mr. HOCHBERG. No, I didn’t talk— 

Mrs. LOVE. In 2012, you never talked about getting to a point 

where you can wind down so that the private sector can take up 

more of the export financing? 

Mr. HOCHBERG. We step back when the private sector steps forward. That is why our loans are off by almost 50 percent from 2 

years ago. 

Mrs. LOVE. But you never talked about winding down the Bank 

at all? 

Mr. HOCHBERG. I guess I don’t—maybe I don’t fully understand 

the question, then. 

Mrs. LOVE. Oh, okay. Well, that is interesting. Because I have all 

sorts of memos here that talk about what you are required to do, 

what the reauthorization in 2012, how you got a broad support and 

things that you had promised that you were going to do. And one 

of the things that you talked about was—one of the things that was 

discussed was winding down. 

Mr. HOCHBERG. The Treasury Department was called to do that 

if the Bank is not reauthorized. 

Mrs. LOVE. Okay. So I am trying to figure out what the goal— 

how do you reach that goal so you are not in direct competition 

with our private sector here? 

Mr. HOCHBERG. Exactly. We are brought in, in almost every single case, by the private sector. A bank says to their customer, we 

can’t make this loan unless we get a guarantee. An insurance 

broker says, I can’t find you private sector insurance, let’s go to the 

Export-Import Bank. 

So it is private sector insurance brokers, private sector banks 

that say we need to guarantee a loan because we cannot make the 

loan on our books without it. 

41 

Mrs. LOVE. Okay. So do you have a set of steps, a set of stages, 

different things that you can actually give to this body for perusal 

on how you are going to get to that goal to allow some of the private sector to get into this? 

Mr. HOCHBERG. The private sector is in every one of those deals. 

So they bring us in. The private sector says we need a— 

Mrs. LOVE. Do you have any goal at all to limit your footprint 

in this market? Or do you have a goal to expand it? 

Mr. HOCHBERG. No. I have tried to say, our loan volume is running almost half what it was 2 years ago because there is less need 

for us today. 

Mrs. LOVE. Okay, so over a 6-year period from 2008 to 2014, the 

Bank’s outstanding financial commitments nearly doubled, growing 

from $59 billion to $112 billion. This unprecedented growth has 

been attributed largely to the financial crisis and resulted as a retreat of the private sector lending from that market. 

I have a problem with that. I think the biggest problem that we 

have with Ex-Im Bank is that it is not listening to Congress, not 

implementing the reforms that it has said that it would implement. 

And I would like to talk about something else before I lose my 

time. 

Advocates for the Bank like to point out that the Bank is needed 

to counter foreign competition, that is to say that foreign ECAs, 

counter foreign ECAs, thereby leveling the playing field for U.S. 

companies. Yet, according to the Bank’s own data, only about a 

third of the Bank’s activity is characterized as countering foreign 

competition. 

So does that mean that two-thirds aren’t to counter foreign competition? 

Mr. HOCHBERG. No, the other two-thirds are filling in the gap 

when the private sector won’t make the loan. 

Mrs. LOVE. Okay. 

Mr. HOCHBERG. For example, in sub-Saharan Africa, there are 

very few private banks that will do a deal with Africa. That is why 

we have such a large portfolio in sub-Saharan Africa. 

Mrs. LOVE. Okay. Again, I am having a really hard time here. 

The biggest problem—when everybody asks me what is the biggest 

surprise, the biggest surprise is that entities like this aren’t accountable to Congress. They don’t keep promises that they make. 

And then they come back and they say yes, we need your reauthorization. We understand that we are in trouble, we understand that 

there is all sorts of fraud going on. But we need you to trust us. 

When do we get to the point where we trust the American people 

again— 

Mr. HOCHBERG. We have complied with every single— 

Mrs. LOVE. —to fill in the gaps? 

Mr. HOCHBERG. —every single requirement that this committee 

has asked us to do. And I enumerated that in the committee hearing 2 weeks ago. 

Mrs. LOVE. Okay. Here is what I am saying. I just got a text 

from my 15-year-old. She has eight classes that she is taking right 

now, and is getting seven As and one C. And right after that text 

that she said to me, ‘‘Mom, by the way, don’t worry, I am getting 

that C up. It will be done by the end of the year. I am making up 

42 

this paper, and this is a plan, and I will have straight A’s.’’ Great. 

There is a plan from a 15-year-old. I think we can do a better job 

in making sure that we are showing a clear plan on how we are 

going to limit our footprint and allow the private sector to become 

more involved in what we are doing here. 

Thank you. I yield back the remainder of my time. 

Chairman HUIZENGA. The gentlelady’s time has expired. I will 

now recognize Mr. Ellison from Minnesota for 5 minutes. 

Mr. ELLISON. I would like to thank the chairman and the ranking member for the time. 

Sir, welcome to the committee. And we do appreciate your presence here and do want to observe that it is the protocol to be respectful to all of the witnesses who appear before us. So I want to 

let you know that I personally make that commitment. Thank you 

for your presence, and thank you for your hard work on behalf of 

the American people. 

Mr. HOCHBERG. Thank you. 

Mr. ELLISON. If Congress didn’t reauthorize the Ex-Im Bank, 

would there be a job impact? I don’t want to put you on the spot 

and ask, how many jobs? Because, of course, if you know, that is 

fine. But I wouldn’t expect you to know. But would there be a job 

impact? And can you kind of describe what it might look like? 

Mr. HOCHBERG. It would be a large impact. Last year, as I mentioned, we supported 164,000 jobs. I read a letter from Don Nelson 

that talked about laying off as many as 50 to 60 employees. I visited a company in the State of Illinois, the Matthews Company, 

that makes grain silos. With our support, instead of laying people 

off in the winter months when there is not a demand in the United 

States, they do exporting. 

So sometimes I get questions about support. That way, he keeps 

his employees year round on a 12-month basis versus having to lay 

them off 4 or 5 months a year. So all those jobs would go out the 

window. 

Mr. ELLISON. Do you think there would be an impact in the manufacturing sector? 

Mr. HOCHBERG. This grain silo is a manufacturer. Don Nelson is 

a company that manufactures. I was talking to Congressman Gibbs 

about a company in New Hampshire that is now 90 percent exports. We worked with a company in Congressman’s—the Congressman has left—in Florida, that sells medical supplies, medical 

technology. He is 90 percent exports at this point. And we help 

them finance this insurance to places like Egypt, Iraq, and Sri 

Lanka, very difficult markets where he cannot get private sector 

insurance. 

Mr. ELLISON. If you don’t mind me interrupting for a moment, 

I have a business in my district, which is an engineering company, 

that does business in Senegal, that employs a number of people, 

not just engineers. And they have nothing but good things to say 

about the help they have received from the Ex-Im Bank. So I can 

tell you from my own district, the work you do is well-appreciated. 

Now, I have a question for you. There has been some questioning 

that has implied that this committee has asked the Export-Import 

Bank to do certain things, and there is some implication that you 

43 

didn’t do them. Are you aware of any outstanding demands the ExIm Bank has been charged with, but has yet to complete? 

Mr. HOCHBERG. This hearing was originally on mandates. The 

last hearing was on the requirements of the 2012 reauthorization. 

And I brought with me that time a stack of every single report the 

committee asked for, a copy of the report, and the date we submitted it to the committee, whether it was on defaults, the Federal 

Register, the textile report, the small business report. Every one of 

those that were enumerated we have complied with and sent copies 

to this committee. 

Mr. ELLISON. Yes, I am looking at a document here that looks 

like— 

Mr. HOCHBERG. Yes. 

Mr. ELLISON. —kind of a list of all the things we have asked you 

to do. 

Mr. HOCHBERG. Precisely. 

Mr. ELLISON. I see the word ‘‘closed’’ or ‘‘responded’’ after a lot 

of them. ‘‘Fully implemented’’ is commonly observed. And it looks 

like you have been doing what we asked you to do. 

Mr. HOCHBERG. We got 16 recommendations from GAO, for example, and we have complied with 15 and we are working on the 

16th. 

Mr. ELLISON. Yes, yes. 

Mr. HOCHBERG. Some of them were received more recently. They 

were not all received in 2012, obviously. 

Mr. ELLISON. Yes, I understand. Let me ask you this though, in 

2002 Congress had directed the Bank to promote export of goods 

and services relatable to renewable energy sources. And although 

it is not explicitly part of the Bank’s charter, since 2008 appropriators have included language directing the Bank to make available 

not less than 10 percent of its aggregate authority to finance renewable energy exports. 

What type of financing does Export-Import Bank make available 

to exporters in renewable energy products? 

Mr. HOCHBERG. Most of the work that we do in the renewable 

energy sector has been on guaranteeing loans to foreign buyers: 

wind turbines in Central America and South America; solar panels 

in India. There is a solar project in South Africa. So they are usually guaranteed loans so the foreign buyer chooses an American 

product versus solar panels from Germany or China or Japan or so 

forth. 

Mr. ELLISON. Does that help domestic makers? 

Mr. HOCHBERG. One, it puts the jobs here. Two, it provides them 

with sufficient volume that they also can provide those products 

here, as well. 

Mr. ELLISON. Yes. And why are the loan terms generally longer 

for energy projects? 

Mr. HOCHBERG. By international agreement, the renewable energy can go as long as 18 years. That is the global standard. So 

to be consistent, and to have a level playing field, we provide that 

as well. 

Mr. ELLISON. I want to thank the gentleman and I yield back the 

time that I think I don’t have any more left of. 

44 

Chairman HUIZENGA. That is accurate. But we were being generous. 

With that, we are going to go to a second round of questioning. 

And the Chair will recognize Mr. Mulvaney, from South Carolina, 

for 5 minutes. 

Mr. MULVANEY. Thanks, Mr. Chairman. 

Mr. Hochberg, I probably won’t take the whole 5 minutes. I want 

to clean up and follow up on some questions that some other folks 

have started with you. 

Mr. Jordan was asking you about the Ex-Im project in Papua, 

New Guinea. And I think you said—and I couldn’t get a transcript 

since you made the comments earlier this morning—that the IG’s 

office asked you for invoices on the $500 million of local expenditures, is that correct? 

Mr. HOCHBERG. $500 million was certified by Exxon Mobil. 

Mr. MULVANEY. Right. 

Mr. HOCHBERG. That money was extended for the project. 

Mr. MULVANEY. But what did the IG ask again? I am just asking 

what— 

Mr. HOCHBERG. The IG was asking to see the actual invoices 

that Exxon Mobil had. 

Mr. MULVANEY. And you said? 

Mr. HOCHBERG. We do not have those, nor did any of the banks 

in the consortium. There were over— 

Mr. MULVANEY. Why couldn’t you—why not? 

Mr. HOCHBERG. None of the banks in the consortium required 

that. So we were at odds with the rest of the— 

Mr. MULVANEY. But you changed your policy on that sense or— 

Mr. HOCHBERG. We are now asking for more in-depth, yes. 

Mr. MULVANEY. So you were able to do it before, and you just 

chose not to do it? 

Mr. HOCHBERG. It was not part of our standard. Listen, one of 

the good things about the inspector general, why I work with him 

closely, why I meet with him, is to get better ideas of how to operate the Bank. 

Mr. MULVANEY. Again, when I am accusing you, you will probably know. I am just actually trying to figure out what the followup was to Mr. Jordan’s question. 

Mr. Schweikert asked you a question about the aging report. And 

here I will be a little more tongue-in-cheek with you, because you 

and I have done this before. Where is Cuba on that aging report— 

pre-Castro Cuba? How many days would that be? 

Mr. HOCHBERG. That would be very long, sir. 

Mr. MULVANEY. What about the loans to government Chiang 

Kai-shek’s in—before Mao took over mainland China—that are still 

on your books? How long have those been there? 

Mr. HOCHBERG. I will have to get back to you on that, sir. 

Mr. MULVANEY. Okay. They are still there, aren’t they? Both of 

those are still there? 

Mr. HOCHBERG. Those are still— 

Mr. MULVANEY. Those are still deemed to be performing loans at 

the Export-Import Bank, the loans to pre-Castro Cuba and Chiang 

Kai-shek— 

45 

Mr. HOCHBERG. No, they are not performing. They are just not 

written off. 

Mr. MULVANEY. They are not default. They are not— 

Mr. HOCHBERG. No, they are not performing loans, but we don’t 

write them off because we are actually—in some cases, we can collect, believe it or not, 20 years later. So we don’t write them off, 

but they are written down. 

Mr. MULVANEY. Speaking of which, by the way, you haven’t 

asked the Administration to talk about the loans Cuba owes us 

from before Castro as part of the current discussions about changing relations with Cuba, have you? 

Mr. HOCHBERG. We have not had any discussion on that. 

Mr. MULVANEY. Okay. Just checking. Mrs. Love asked you a 

question about the 2012 reauthorization and you said—I thought 

I heard you say that it was your interpretation that it was up to 

the Secretary of the Treasury to talk about winding down the 

Bank, was the term you were using, but getting out of various segments of your business, if the Bank was not reauthorized. That is 

not your testimony, is it? 

Mr. HOCHBERG. I thought there were two separate questions, if 

I understand it, sir. 

Mr. MULVANEY. Yes. 

Mr. HOCHBERG. One was about if we are not authorized, the 

Treasury winds down the Bank. A second requirement of the reauthorization was to negotiate an end to export credits in general 

globally. 

Mr. MULVANEY. Correct. And that second piece is a legal obligation of the Treasury Secretary right now under the current law, 

correct? 

Mr. HOCHBERG. And they have sent three reports to Congress on 

their performance on that— 

Mr. MULVANEY. How often do you talk to Mr. Lew about that? 

Mr. HOCHBERG. I have talked to Mr. Lew, I have talked to Under 

Secretary Sheets about it. 

Mr. MULVANEY. No. How often have you talked with Mr. Lew 

about that? 

Mr. HOCHBERG. I talk with Mr. Lew perhaps twice a year on 

that. And I talk to Under Secretary Sheets far more frequently. 

Mr. MULVANEY. So your testimony is that several times a year, 

you will sit down with representatives of the Treasury to go over 

the implementation of Section 11 of the 2012 reauthorization? 

Mr. HOCHBERG. Without question, several times. 

Mr. MULVANEY. And who is the Under Secretary of whom you 

are speaking? 

Mr. HOCHBERG. It is now Nate Sheets. Before that, it was Lael 

Brainard. 

Mr. MULVANEY. Were you aware that the CEO of Delta was here 

and testified under oath that Lael Brainard told him that she 

never intended to implement those reforms in the 2012 law? Are 

you aware of that testimony? 

Mr. HOCHBERG. I heard about that. I am not aware of the specifics of it, sir. 

46 

Mr. MULVANEY. And I recognize the fact that she is no longer 

employed by you. But did you follow up on that? Did that surprise 

you? Is that consistent with the law, in your mind? 

Mr. HOCHBERG. She was the Under Secretary of the Treasury. 

Mr. MULVANEY. Right. 

Mr. HOCHBERG. That is not—I Chair the Export-Import Bank. 

Mr. MULVANEY. And I recognize, as I say, that she doesn’t work 

for you. And I guess I said she doesn’t work for you anymore. That 

is right, she has never worked for you. 

But was it unusual? Did you think it was unusual for the Under 

Secretary of the Treasury to say—or at least allegedly to say, pursuant as we have it from sworn testimony—that she was not going 

to implement the law? 

Mr. HOCHBERG. That has not been my experience with the Treasury Department. I think they have acted very aggressively and 

have submitted a report to this committee every year in November. 

Mr. MULVANEY. Lastly, I know we made a big deal earlier this 

morning about the newspaper articles with Mr. Boehner’s quotes in 

it about the importance of the Bank. I was just wondering if you 

were aware of older newspaper articles regarding the Bank where 

Boeing actually said that if the Export-Import Bank were to go 

away, it would not affect their deliveries, and that the company 

was, ‘‘confident they could find alternative funding sources for customers that would not require it to boost its support of aircraft 

sales.’’ Are you aware of that position by Boeing? 

Chairman HUIZENGA. The gentleman’s time has expired, but I 

will allow you to answer. 

Mr. HOCHBERG. The position that—I am not going to comment on 

that. I don’t have the specifics in front of me, sir. 

Mr. MULVANEY. Okay. 

Chairman HUIZENGA. And the gentleman’s time has expired. 

With that, we will go to Ms. Moore of Wisconsin for 5 minutes. 

Ms. MOORE. Thank you so much, Mr. Chairman. 

Mr. Hochberg, you just have been a marvelous witness under fire 

here. You just have been pilloried here today about everything from 

fair value accounting to this being corporate welfare. I never heard 

of welfare where you return money to the Treasury and support 

jobs. 

But you have been under particular attack with regard to the 

mandate of the Bank to support environmentally-sustainable 

projects. So I will give you a chance to sip some water, because I 

am just going to sort of talk for a couple of my minutes here. 

We once had a speaker here who was oft-quoted by both Democrats and Republicans who said that all politics was local. So it 

really doesn’t surprise me that between these two committees, by 

my count—and it is a rough count—there are no less than seven 

Members from Texas, and they are valiantly protecting the petroleum business. 

Koch Industries, for example, is the second-wealthiest, I guess, 

company in the Nation. And they manufacture and refine fossil 

fuels, chemicals. And we have talked a whole lot about lawsuits. 

Just between 1999 and 2003, they have been fined at least $400 

million in fines, penalties, and judgments. People have died because of oil spills across six States. They have paid almost $300 

47 

million in wrongful death suits because of a ruptured pipeline. And 

of course, most of the people in the fossil fuel energy support stuff 

like the Keystone Pipeline, even though they are very dangerous. 

Koch has had the largest civil fine ever under Federal environmental law. I just want you to understand that it is not personal, 

Mr. Hochberg. They are defending the oil ‘‘‘bidness,’’ as they say. 

In 2000, a Federal grand jury returned a 97-count indictment 

against Koch Industries for environmental crimes. So I just wanted 

you to know the environment that you are in so that you can appreciate that it is not personal. People are just simply decrying one 

of the mandates that you have. 

Just quickly, would Koch Industries qualify for support under 

the Ex-Im Bank? They say we pick winners and losers and so on. 

And if Koch Industries were to engage in any of the other activities 

as other smaller businesses, would they qualify for your financing? 

Mr. HOCHBERG. Yes, they would. And they, in fact, have been a 

beneficiary of Ex-Im financing in the past. 

Ms. MOORE. Okay. Very good. There was also discussion of your 

financing Solyndra. There was a lot of criticism around their solar 

modules. Did you finance Solyndra? I wasn’t aware that you had 

done that. 

Mr. HOCHBERG. I am glad you asked that question. There have 

been a lot of rumors to that effect. No, we did not. We financed a 

company in Belgium that was looking to buy solar panels. They 

had a choice between German, Chinese, and American. And they 

chose panels from the United States, and they chose panels actually manufactured by the Solyndra Corporation. We lent money to 

the Belgian company. And as a result they bought American panels 

and supported jobs in our country versus China or Germany. 

Ms. MOORE. And so those rooftop solar panels are providing energy for a distribution center, an international supermarket chain? 

Mr. HOCHBERG. Yes, and the loan is performing and is being paid 

back. 

Ms. MOORE. Okay. Very good. I wanted to know that. 

I would like to yield my last minute to Mr. Heck. 

Mr. HECK. I didn’t see that one coming, but I am grateful for it. 

Thank you. 

There was a lot of talk in my earlier question about small business. And we have had previous talks about where our country 

would be rendered as the only developed country without an export 

credit authority, should we allow it to expire. 

Just briefly, however, to put it in another perspective, how big 

would our Export-Import Bank have to be in order to be comparable to the four that China has? 

Mr. HOCHBERG. Oh, goodness. Well, China has one called 

SINOSURE that does their credit insurance like we do, and they 

do it in the range of $325 billion, $350 billion a year. We did in 

total—not just insurance, but in total—$20 billion last year. 

Thankfully, we have a better private sector. We have a better 

banking system so that—we are a capitalist society. Companies can 

rely on the private sector and don’t have to only look to us. They 

look to us when the private sector is not there. 

Chairman HUIZENGA. The gentlelady’s time has expired. 

48 

And with that, we will recognize Mr. Hice of Georgia for 5 minutes. 

Mr. HICE. Thank you, Mr. Chairman. You said that you have 

complied with every request of this committee. I just find that to 

be absolutely false. We have not received, for example, a response 

to any of my requests from a couple of weeks ago regarding a full 

accounting of all the missing Ex-Im data on data.gov 2 weeks ago. 

Why have we not received that, sir? 

Mr. HOCHBERG. I thought the question, sir, was about the requirements of the 2012 reauthorization act. I was referring to, we 

have fully complied with every requirement of the 2012 act. 

We have received over 24 letters from this committee and subcommittee since July. And we are replying to every one of those as 

quickly as possible. 

Mr. HICE. When can we expect to have it? 

Mr. HOCHBERG. Actually, we have responded to your letter, sir. 

We sent you a letter—we did respond. 

Mr. HICE. Why have we not received it? 

Mr. HOCHBERG. We sent it to the committee on Friday. 

Mr. HICE. Okay. We will check into that and we will getting back 

with you if that is not here. But as of a few moments ago, it had 

not been received. 

Let’s go on. Also at our last hearing, you promised to provide this 

panel with information explaining how Boeing knew about Delta’s 

FOIA request for communications between Boeing and Ex-Im. You 

said that Boeing had knowledge of the request because the Bank 

notified Boeing that its information was being sought. But yet, this 

information was not included in your response to the panel. Again, 

why have you not provided that information? 

Mr. HOCHBERG. What I tried to explain is that under FOIA 

rules—and I am not a lawyer—if a company is the subject of a 

FOIA request, we are obligated to inform the party that we are 

providing information subject to a FOIA request. 

Mr. HICE. And that was not done? 

Mr. HOCHBERG. We did provide that information— 

Mr. HICE. You didn’t provide it to us, and you didn’t provide it 

to Delta, either. Again, as of— 

Mr. HOCHBERG. Delta was the one who asked for it. So we had 

to— 

Mr. HICE. We asked for it as well in this committee. And we did 

not receive it. And I want to know why. 

Mr. HOCHBERG. That letter was sent to the committee on Friday, 

April 24th. 

Mr. HICE. All right. So you are saying again that that has been 

received? 

Mr. HOCHBERG. We sent the letter to the committee on the 24th. 

Mr. HICE. All right. Why was Delta not notified? 

Mr. HOCHBERG. I am not sure I understand the question—notified about— 

Mr. HICE. According to your rules, your policies regarding FOIA 

requests and regulations, the Bank shall notify the requester—in 

this case Delta—in writing whenever a business—that would be 

you, the Bank—is given a pre-disclosure notification. And that has 

never been received by Delta. Even up to the last few minutes beVerDate Nov 24 2008 12:32 Nov 13, 2015 Jkt 095063 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 K:\DOCS\95063.TXT TERI
49 

fore I walked in here, Delta has never heard anything. And why 

is that? 

Mr. HOCHBERG. If I understand correctly, sir, and if I am not— 

I will get back to you. But if a company request, a FOIA request 

or—we inform the company that—whose data we are therefore 

sharing with an outside party. Delta was the requester, not the 

subject of the FOIA. 

Mr. HICE. Delta submitted a FOIA request in October of 2012. 

In February 2013, Boeing submitted its FOIA request for Delta’s 

FOIA. On April 2013, Ex-Im published a FOIA log showing Delta’s 

request was not started. So it didn’t even acknowledge that Delta 

had put forth a request. We are clearly missing some communication here from the Bank to Boeing between October of 2012 and 

February of 2013. And we expect a response. 

Mr. HOCHBERG. The letter I sent to the committee on April 24th 

explained—fully outlined all of the answers to the questions you 

are asking. I am sorry that somehow from the committee to your 

office, that letter didn’t— 

Mr. HICE. This has been going on for years. 

Mr. HOCHBERG. We just got the letter request from you at the 

hearing 2 weeks ago. And I submitted a response on April 24th. 

Mr. HICE. Why has it taken so long to fill the request? 

Mr. HOCHBERG. Sir, listen, we have gotten from this committee 

and from Chairman Issa—we have submitted 100,000 pages of documents over the last several year, 50,000 of those in the last— 

Mr. HICE. All right. Let me go back to this one, because I have 

just barely over 30 seconds. 

On November 19, 2014, Delta submitted FOIA request number 

two. On January 12th of this year, they paid an over $90,000 invoice. As of April of this year, April 20th, the latest status update 

from Ex-Im, there has still been no response to Delta. Why is it 

taking so long? 

Mr. HOCHBERG. Sir, we have gotten this year already as many 

FOIA requests as all of last year. We are running at double the 

level. And we have also, as I have said—we prioritize responses to 

Congress over FOIA requests. So we just submitted 50,000 pages 

to Congress in the last 6, 7 months. 

That said, I would like to improve our FOIA response. I think we 

need to get better at it and move faster. 

Mr. HICE. I think you do, as well. 

Chairman HUIZENGA. The gentleman’s time has expired. 

Mr. HICE. Thank you, sir. 

Chairman HUIZENGA. With that, we will recognize the ranking 

member of the Health Care, Benefits and Administrative Rules 

Subcommittee, Ranking Member Cartwright, for 5 minutes. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

Mr. Hochberg, I want to pick up on some questioning from Mr. 

Hensarling who, unfortunately, has stepped out. But he raised the 

possibility that I have misquoted the Speaker of the House on the 

question of support for the Ex-Im Bank and the jobs that it creates. 

And I can tell you that I have now looked at both Politico and 

Reuters, and they are quoting the same thing exactly word-forword from Mr. Boehner, who said this: ‘‘There are thousands of 

50 

jobs on the line that would disappear pretty quickly if the Ex-Im 

Bank were to disappear.’’ 

Both Politco and Reuters said that. And I take it you still agree 

with that statement, Mr. Hochberg? 

Mr. HOCHBERG. Yes, I do, sir. 

Mr. CARTWRIGHT. All right. And I want to talk about the bipartisan support the Ex-Im Bank and its mandates have received over 

the past few decades. Congress has reauthorized the Ex-Im Bank 

16 times, am I correct in that? 

Mr. HOCHBERG. That is correct. 

Mr. CARTWRIGHT. All right. And as Business Insider has noted, 

14 of the 16 times the Bank’s reauthorization has come up for a 

vote, it has passed by either a unanimous consent or voice vote, 

which is tantamount to a unanimous vote, in at least one chamber 

of Congress. 

In addition, H.R. 597, the Reform Exports and Expand the American Economy Act—and I think you talked about this a little bit— 

which would reauthorize the Bank while instituting certain reforms, has 60 Republican cosponsors, as of now. 

Also, H.R. 1031, the Promoting U.S. Jobs Through Exports Act 

of 2015, which would also reauthorize the Bank, has 189 Democratic cosponsors. 

Taken together, these two bills make it clear that the Ex-Im 

Bank has the support of a majority of the House of Representatives, and that those who are raising their voices against it in this 

committee here today are a very, very small but very vocal minority. 

Chairman Hochberg, I would like to turn now to the specific 

Bank mandates under discussion today and their support by both 

Democratic and Republican leaders. First, the devoting a portion to 

small businesses. The Ex-Im Bank Act Amendments of 1983, the 

bill that first directed the Ex-Im Bank to devote a portion of its financing to small businesses, was signed into law by President 

Reagan, correct? 

Mr. HOCHBERG. That is correct. 

Mr. CARTWRIGHT. And the Ex-Im Bank Reauthorization Act of 

2002, which increased the small business lending target to 20 percent of the Bank’s authority, was signed into law by President 

George W. Bush, am I correct in that? 

Mr. HOCHBERG. That is correct, yes sir. 

Mr. CARTWRIGHT. And that same 2002 act signed by President 

Bush also established the Bank’s renewable energy mandate, am I 

correct in that? 

Mr. HOCHBERG. Exactly, sir. 

Mr. CARTWRIGHT. The same mandate that has been objected to 

by my colleagues across the aisle today. 

I would also like to discuss the history of the Ex-Im Bank’s subSaharan African mandate, which requires the Bank to expand its 

commitments in that region. Chairman Hochberg, this mandate 

was established in an amendment adopted under Republican Financial Services Committee Chairman Jim Leach, am I correct in 

that? 

Mr. HOCHBERG. That is correct, sir. 

51 

Mr. CARTWRIGHT. And this amendment received bipartisan support before being incorporated into the Ex-Im Bank Reauthorization Act of 1997, correct? 

Mr. HOCHBERG. That is correct, sir. 

Mr. CARTWRIGHT. Is it fair to say then that Members of both parties, including Republican and Democratic Presidents, have supported this Bank and its specific commitments to small businesses, 

renewable energy, and also sub-Saharan Africa? 

Mr. HOCHBERG. That is absolutely correct, sir. 

Mr. CARTWRIGHT. Thank you, Chairman Hochberg. I find it hard 

to say, speaking for myself, that I understand why, after this longstanding bipartisan support for something that is a win-win for 

American taxpayers and American jobs, this Bank is suddenly the 

focus of political controversy at all. So I thank you for appearing 

here today— 

Mr. HOCHBERG. Thank you. 

Mr. CARTWRIGHT. —and putting up with this committee. 

And I yield back, Mr. Chairman. 

Chairman HUIZENGA. The gentleman yields back. 

And with that, we recognize Health Care, Benefits and Administrative Rules Subcommittee Chairman Jordan, from Ohio, for 5 

minutes. 

Chairman JORDAN. Thank you, Mr. Chairman. 

Mr. Hochberg, how much financial assistance did the Export-Import Bank provide to Solyndra—or actually, not to Solyndra; you 

told the gentlelady from Wisconsin that it was a Belgian company 

that you provided assistance to who bought panels from Solyndra. 

How much was that package, that authorization? 

Mr. HOCHBERG. The loan was $10 million. 

Chairman JORDAN. $10 million. And do you recall when the Bank 

approved this financing that benefited the Belgian company, which 

then benefited Solyndra? 

Mr. HOCHBERG. It was a loan to the Belgian company that was 

approved by the board in February of 2011. 

Chairman JORDAN. And at that same time, our records show that 

Solyndra was in serious trouble and it was renegotiating a loan 

guarantee it already had with the Department of Energy. Are you 

aware of that. 

Mr. HOCHBERG. I am aware of that, sir. 

Chairman JORDAN. You are aware of it now. But I am asking, 

were you aware of it then? 

Mr. HOCHBERG. I can’t recall. That was over 4 years ago whether— 

Chairman JORDAN. No, no, no. This is kind of important. This is 

the company that went bankrupt. This was the poster child for 

those of us who thought this 1705 program at the Department of 

Energy was goofy, where they had 23 companies get $15 billion and 

they all had junk bond credit ratings, double D-minus ratings. 

So Solyndra is in trouble. They are refinancing, and redoing their 

loan with the Department of Energy. And at the same time that 

happens, you are saying it is just coincidence that the Ex-Im Bank 

is doing a $10 million financing deal with the Belgian company 

who is going to buy solar panels from Solyndra? 

52 

Mr. HOCHBERG. Without question, sir. That Belgian company, I 

tried to mention, was looking at Chinese, German, and American 

panels— 

Chairman JORDAN. When you— 

Mr. HOCHBERG. —and they chose American panels— 

Chairman JORDAN. —approved the $10 million in financing to 

help the Belgian company buy panels from Solyndra, did you know 

that Solyndra was in the process of refinancing with the Department of Energy? 

Mr. HOCHBERG. I can’t answer that question, sir, because I don’t 

know the answer. 

Chairman JORDAN. Did anyone at the Ex-Im Bank, to your 

knowledge, get on the phone and call people at the Department of 

Energy and ask what may be happening with this Solyndra loan 

at the Department of Energy at the same time you were getting 

ready to approve a deal that was going to benefit Solyndra? 

Mr. HOCHBERG. The loan was made to the Belgian company. The 

panels were put in place, ensured that they were actually operating 

as planned before any disbursement was made. That loan is on the 

books. It is being paid back on time. So that loan is a good loan— 

Chairman JORDAN. But that is not—my question is not about the 

loan. My question is, was Solyndra benefiting from what you were 

doing? I want to know if you also knew they were getting other taxpayer assistance from the Department of Energy? And did that factor into your decision? 

Mr. HOCHBERG. That normally would not factor into our decision. 

Chairman JORDAN. I am not asking if it normally did. I am asking if it did? 

Mr. HOCHBERG. Sir, that was over 4 years ago. In my tenure at 

the Bank— 

Chairman JORDAN. No, but Mr. Hochberg, you knew in February 2011 when you did this, that it was $10 million, which was— 

Mr. HOCHBERG. Actually, it was— 

Chairman JORDAN. —kind of a high-profile issue at the time. 

Mr. HOCHBERG. I stand corrected. It was— 

Chairman JORDAN. This was the company that went—it was sort 

of the poster child for this program at the Department of Energy. 

It went bankrupt, costing the taxpayers millions of dollars. And at 

the same time that was going on, you were financing a company 

that was going to buy Solyndra panels. 

Mr. HOCHBERG. And that loan is being paid back and the jobs 

were created and we are getting paid back in full. 

Chairman JORDAN. I know. I didn’t dispute that. I am just asking, did you know and did you coordinate with the Department of 

Energy when all this was happening? 

Mr. HOCHBERG. No, we don’t coordinate with the Department of 

Energy— 

Chairman JORDAN. Did you talk to anyone at the White House, 

anyone at the Department of Energy, when you were doing this 

Belgian deal that benefited Solyndra? 

Mr. HOCHBERG. Oh, absolutely not. 

Chairman JORDAN. All right. Let’s go back to this. 

Mr. HOCHBERG. And the loan was made in June or July of that 

year. I just want to make sure— 

53 

Chairman JORDAN. How many project authorizations does the 

Ex-Im Bank do in a typical year? How many did you do last year? 

Mr. HOCHBERG. In the range of 3,500. 

Chairman JORDAN. 3,500. For how many of those 3,500 did the 

recipient pay for some travel for Ex-Im employees while those ExIm employees were in that timeframe of deciding whether this entity was going to get financing? 

Mr. HOCHBERG. Sir, as I mentioned, we have travel that is paid 

for by our sponsor for large projects so that— 

Chairman JORDAN. I am asking—3,500? How many of them did 

the recipients pay for travel? 

Mr. HOCHBERG. I would be happy to get back to you on that. I 

don’t have the precise numbers. 

Chairman JORDAN. Take a guess. 

Mr. HOCHBERG. I have no—I am not going to take a—I don’t 

want to mislead you. 

Chairman JORDAN. Half of them? 

Mr. HOCHBERG. No. I don’t want to mislead you. 

Chairman JORDAN. 20 percent? 

Mr. HOCHBERG. I am not going to speculate. 

Chairman JORDAN. What we do know is the one I referenced in 

my opening questions—$97,000, 4 employees. And those four employees got to travel to places like Tokyo, London, and the South 

Pacific paid for by Exxon, and Exxon got a $3 billion deal. 

Mr. HOCHBERG. Sir, those travel—it is just like a codel. This is 

about going to investigate. Negotiations happened in London, they 

happened in Japan, and then there were visits to Papua, New 

Guinea. This was a large project with a large— 

Chairman JORDAN. Mr. Hochberg, I would like for you to supply, 

or provide to the committee how many of the 3,500 deals you did 

last year involved travel paid for by the entity getting the loan, getting the guarantee, getting the financing, I want to know how 

many of those 3,500 had that practice in place. 

Mr. HOCHBERG. I would be happy to provide that. And that practice is consistent with law. I should also add that board members 

who vote on these transactions never take part in those trips. 

Chairman JORDAN. I yield back, Mr. Chairman. 

Chairman HUIZENGA. The gentleman’s time has expired. 

The gentleman from Washington, Mr. Heck, is recognized for 5 

minutes. 

Mr. HECK. Thank you, Mr. Chairman. 

I seek unanimous consent to insert in the record letters from the 

Export-Import Bank dated April 16th and April 24th to these combined subcommittees to remove any mystery about receipt of these 

letters. The committee has received them, with your permission, 

sir. 

Chairman HUIZENGA. Without objection, it is so ordered. 

Mr. HECK. Secondly, my friend, Mr. Mulvaney, made reference to 

a dated comment by the Boeing company about the impact of the 

elimination of Ex-Im. I don’t know what the date was on that. But 

let me give you one from the last several days from Reuters. 

‘‘Boeing Company may have to relocate U.S.-based businesses 

and manufacturing jobs overseas if Congress eliminates funding for 

the U.S. Export-Import Bank. On Thursday, Chief Executive Jim 

54 

McNerney said, ‘Most of my engineering and manufacturing jobs 

are in the United States and I would like to keep it that way. But 

without Ex-Im, you would have to start asking the question about 

where they should be.’’’ 

I have said before and I say in the most serious and somber of 

tones, we are playing with fire. We are playing with fire of the 

heart of the manufacturing base in America if we continue down 

this path. 

My friend from South Carolina, whom I am very sorry left, asked 

a pretty spectacular question earlier; namely, in the 3 years since 

the Ex-Im was reauthorized, what happened to cause it to go on 

life support? What happened to cause it to go from 330 votes in 

favor of to life support? 

The problem with that, of course, as the Chair of the Export-Import Bank began to outline, is that it is not on life support. It does, 

in fact, have 250 cosponsors of two bills. And my friend—I think 

Ms. Moore referred to 189. That is wrong. It is 190. And there are 

60 from the other side of the aisle for Mr. Fincher’s version. 

The problem here isn’t that it is on life support. The problem is 

that it hasn’t been subjected to a vote. There is not a person sitting 

in this room who would dispute the fact that the votes are there 

to reauthorize the Export-Import Bank if it will but come to a vote. 

But it is a fair question. What happened since that reauthorization? That Chair hasn’t changed. That Chair has. Mr. Baucus, who 

chaired this committee when it was reauthorized, led it through 

regular order. Last year, when it was reauthorized for a short period of time, it was outside of regular order. Earlier in this term, 

this winter, we had an amendment to the committee oversight bill, 

very innocuous, very neutrally-worded, suggesting that consideration of reauthorization of the Export-Import Bank ought to be subjected to regular order. 

And the new Chair, the factor that has changed, opposed it and 

it was defeated. Now, if I were a cynic, I would say that is because 

he is afraid. He knows the votes are here. He knows darn well the 

votes are here. That is why he won’t bring it to regular order. 

Mr. Gowdy asked another interesting question of Mr. Hochberg. 

Not a terribly fair one, but an interesting one: Did he think that 

facts would persuade the Chair of the committee? Well, the truth 

is, they don’t. And the truth is, I don’t even blame the Chair for 

that. This is a matter of philosophy and values. And the Chair of 

the committee, who is opposed to regular order, who has publicly 

announced he is opposed to reauthorization of the Export-Import 

Bank will not have his mind changed by facts because it is a matter of philosophy. 

And he is 100 percent entitled to that philosophy. But it does not 

represent the majority point of view of the United States House of 

Representatives by any stretch of the imagination. If that were 

true, then he would bring Mr. Fincher’s bill to markup. But he 

hasn’t. And he hasn’t scheduled it. And I think it is highly unlikely 

that he will schedule it. 

Because, again, he knows the votes are there: 190 Democrats on 

Ms. Water’s version of the bill, Ms. Moore’s and mine; 60 on Mr. 

Fincher’s. The votes are there to reauthorize the Export-Import 

Bank. He has his foot on the air hose as a matter of philosophy. 

55 

He doesn’t believe in Ex-Im. He is entitled to that point of view. 

I don’t believe he is entitled to keep the will of this body from 

manifesting in consideration of this institution, this 80-year-old institution that creates jobs for Americans. 

And with that, I yield back the balance of my time. 

Chairman HUIZENGA. The gentleman’s time has expired. And 

with me being the last questioner, I appreciate your time. I recognize myself for 5 minutes. 

But I do want to quickly explore something that was maybe 

touched on, but you said you talk to Secretary Lew about twice a 

year about particular projects. 

Mr. HOCHBERG. A few times a year. I don’t keep a journal on how 

many times— 

Chairman HUIZENGA. All right. How many times do you talk to 

Under Secretary Sheets? 

Mr. HOCHBERG. Many times. 

Chairman HUIZENGA. How about the State Department interaction? Who and how often do you speak with at State Department? 

Mr. HOCHBERG. Currently, I work with Under Secretary Novelli, 

who is in the economics. Obviously, interaction, I just saw Secretary Kerry when I was in— 

Chairman HUIZENGA. So you do speak with the Secretary level, 

correct? 

Mr. HOCHBERG. If I am on a trip—sometimes we have traveled 

together. I was with him coming back from Panama, in fact. 

Chairman HUIZENGA. Yes, I had seen that in the paper. I assumed you had talked to him then. 

So did you do any of those types of trips with Secretary Clinton, 

as well? 

Mr. HOCHBERG. I traveled with Secretary Clinton once to China 

and once to Africa. 

Chairman HUIZENGA. And how often would you talk to her beyond that? 

Mr. HOCHBERG. Oh, I speak to Secretary Kerry more frequently. 

Chairman HUIZENGA. Okay. Well, she very publicly talked about 

the Russian airline deal and had said in 2009 that the Export-Import Bank would be looking for their application. 

So is there interaction directly? Did she have interaction on that 

particular deal with you? 

Mr. HOCHBERG. No. Not to my knowledge. 

Chairman HUIZENGA. But she threw it out there rhetorically? 

Mr. HOCHBERG. We are a part of—part of our State Department 

is also part of economic state to craft economic diplomacy. So when 

we are overseas, we are trying to sell products, we are trying to 

advance American interests. So it is not unusual for other members 

of the Administration to invoke our name. 

Chairman HUIZENGA. So to invoke your name and presumably 

follow up on that? 

Mr. HOCHBERG. Sometimes— 

Chairman HUIZENGA. I would hope so. 

Mr. HOCHBERG. Sometimes there is, sometimes there isn’t. 

Chairman HUIZENGA. All right. How about Cuba? Have you 

granted any deals into Cuba? 

56 

Mr. HOCHBERG. No. We have been closing Cuba. And it is in our 

charter, a prohibition on Cuba. And it is also we have—this Congress has sanctions on Cuba. We do no business in Cuba. 

Chairman HUIZENGA. Okay. But obviously, the Administration is 

changing that. Do you plan to approve any deals into Cuba? 

Mr. HOCHBERG. Our charter prohibits it. 

Chairman HUIZENGA. Okay. I am also just a little bit curious, 

and the hearing was supposed to be a little more on the mandates, 

the elements that you are required to do, both the renewable energy portfolio, as well as sub-Saharan lending. 

Do you acknowledge that there are not enough deals to hit your 

10 percent mandate? 

Mr. HOCHBERG. In the— 

Chairman HUIZENGA. In renewables? 

Mr. HOCHBERG. Yes. There are not enough exports to hit that 

number. 

Chairman HUIZENGA. Okay. So do you believe that should be in 

there? 

Mr. HOCHBERG. I think the mandates have been good. I think 

they—what we have done— 

Chairman HUIZENGA. But they are not achievable. 

Mr. HOCHBERG. That is a target that is in there. But— 

Chairman HUIZENGA. But you could argue that you are mandated to do that, just as you are mandated to not do deals into 

Cuba. What if there is a renewable energy deal in Cuba? You have 

conflicting— 

Mr. HOCHBERG. No. No, we would not—there are a number of 

countries we do not do business in. We don’t do business in Cuba. 

We don’t do business in Venezuela, North Korea. There are a large 

number— 

Chairman HUIZENGA. Okay. 

Mr. HOCHBERG. There are a number of countries. I am not going 

to quantify that. 

Chairman HUIZENGA. So you are not open to removing the renewable energy mandate? 

Mr. HOCHBERG. Mr. Chairman, that is in the hands of Congress. 

Now, these three mandates were put in place by Congress, and we 

will execute them. It is their decision—your decision to make 

whether you want to continue them or not. 

Chairman HUIZENGA. In general, what are the parameters of the 

sub-Saharan lending, and are you able to achieve those? 

Mr. HOCHBERG. The sub-Saharan lending does not have a particular target in mind. So that we simply make extra effort. I travel 

there once a year. Our vice chair, that is part of her portfolio. We 

have two people who do business development there to make sure 

that companies understand if they are afraid of exporting there because of financing, we can let them know what tools we have. 

Chairman HUIZENGA. And I am being requested for 5 seconds. So 

I will recognize my friend from Wisconsin. 

Ms. MOORE. Thank you so much, Mr. Chairman. 

I just wanted to point out there are a billion people in Africa. We 

really do need their business. 

Chairman HUIZENGA. All right. And with that, I would like to 

recognize my friend from South Carolina for my remaining time. 

57 

Mr. MULVANEY. Mr. Cartwright asked why this wasn’t an easy 

thing to do, why it was a big deal. I want to read something: 

‘‘The purpose of the Export-Import Bank is to create American 

jobs for American workers. Unfortunately, the Bank has a history 

of providing assistance to companies that have been exporting 

American jobs and hiring cheap foreign labor. For example, the Export-Import Bank insured a $3 million loan to help General Electric build a factory where Mexican workers will make parts for appliances that will be exported back to the United States. As a result, 1,500 American workers will lose their jobs to Mexican workers who will be paid only $2 an hour. I urge my colleagues to oppose S.1372, the Export-Import Bank Reauthorization Act.’’ 

That was the gentlewoman from California, Maxine Waters, in 

June of 2002. So it is of interest, no doubt. 

Chairman HUIZENGA. And at this time, I would like to thank 

Chairman Hochberg for being here, for taking your time today to 

be with us. There is no further business. 

The Chair notes that some Members may have additional questions for this witness, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to this witness 

and to place his responses in the record. Also, without objection, 

Members will have 5 legislative days to submit extraneous materials to the Chair for inclusion in the record. 

The hearing is adjourned. 

[Whereupon, at 4:48 p.m., the hearing was adjourned.] 

(59) 

A P P E N D I X 

April 30, 2015 

60 


95063.001
61 


95063.002
62 


95063.003
63 


95063.004
64 


95063.005
65 


95063.006
66 


95063.007
67 


95063.008
68 


95063.009
69 


95063.010
70 


95063.011
71 


95063.012
72 


95063.013
73 


95063.014
74 


95063.015
75 


95063.016
76 


95063.017
77 


95063.018
78 


95063.019
79 


95063.020
80 


95063.021
81 


95063.022
82 


95063.023
83 


95063.024
84 


95063.025
85 


95063.026
86 


95063.027
87 


95063.028
88 


95063.029
89 


95063.030
90 


95063.031
91 


95063.032
92 


95063.033
93 


95063.034
94 


95063.035
95 


95063.036
96 


95063.037
97 


95063.038
98 


95063.039
99 


95063.040
100 


95063.041
101 


95063.042
102 


95063.043
103 


95063.044
104 


95063.045
105 


95063.046
106 


95063.047
107 


95063.048
108 


95063.049
109 


95063.050
110 


95063.051
111 


95063.052
112 


95063.053
113 


95063.054
114 


95063.055
115 


95063.056
116 


95063.057