Obama must take a tougher stand against Russia, and he can do that by ending Ex-Im’s deals with Vladimir Putin’s cronies

With tensions boiling over in Ukraine as Vladimir Putin’s regime sends more weapons to separatists, House Financial Services Committee Chairman Jeb Hensarling (R-TX) is calling on President Barack Obama to stop the Export-Import Bank from doing deals with Russian businesses.

Hensarling says that Russia “bears responsibility” for the conflict in Ukraine as well as the “atrocity of the downing of Malaysia Airlines Flight 17,” in which 298 people lost their lives. The Texas Republican noted that Putin’s regime “is supplying the separatists with advanced weapons and encouraging their attacks on aircraft and on the people of Ukraine.”

“Russia’s actions are in direct conflict with our national interests,” Hensarling wrote in a letter to President Obama. “Yet, still, the Export-Import Bank remains open for business in Russia. In fact, total authorizations for deals between Ex-Im and Russia have increased nine-fold since you took office.”

The House Financial Services Committee recently noted that Ex-Im increased funding for Russian projects by 177 percent in FY 2013, translating to a $580 million commitment, a record level. These loans and subsidies are backed by American taxpayers.

While the Obama administration has imposed sanctions on some Russian companies, Ex-Im is still doling out millions of dollars in “sweetheart deals” to others. “Indeed,” Hensarling said, “some of the very same Russian firms that are being sanctioned by the United States have benefitted from Ex-Im: Vnesheconombank (VEB) and Gazprombank – two state-owned Russian banks.”

“As you know, Congress is in the midst of debating whether to reauthorize the Export-Import Bank. But in the face of growing Russian aggression, Ex-Im’s continuing – and even increasing – connections with Russian companies, many of them run by Vladimir Putin’s cronies, has got to stop and stop immediately,” he added.

Hensarling says that President Obama has the authority to “deny applications for financing that would benefit Russian companies.” The Ex-Im Bank’s charter, in Section 2(b)(1)(B), states:

“Only in cases where the President, after consultation with the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, determines that such action would be in the national interest where such action would clearly and importantly advance United States policy in such areas as international terrorism (including, when relevant, a foreign nation’s lack of cooperation in efforts to eradicate terrorism), nuclear proliferation, the enforcement of the Foreign Corrupt Practices Act of 1977, the Arms Export Control Act [22 U.S.C. 2751 et seq.], the International Emergency Economic Powers Act [50 U.S.C. 1701 et seq.], or the Export Administration Act of 1979 [50 U.S.C. App. 2401 et seq.], environmental protection and human rights (such as are provided in the Universal Declaration of Human Rights adopted by the United Nations General Assembly on December 10, 1948) (including child labor), should the Export-Import Bank deny applications for credit for non-financial or noncommercial considerations. Each such determination shall be delivered in writing to the President of the Bank, shall state that the determination is made pursuant to this section, and shall specify the applications or categories of applications for credit which should be denied by the Bank in furtherance of the national interest.”

Hensarling isn’t alone in the call for the White House to take a tougher position against Russia. He notes that three Democratic senators sent a letter to President Obama this week urging him to consider broader sanctions against Putin’s regime.

The Export-Import Bank, of course, is up for reauthorization this year, and the vote is expected to come before September 30. Hensarling has been among the most vocal critics of the Bank, calling it “the face of cronyism” because it doles out billions of dollars to big businesses.

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