US Export-Import Bank officials investigated over gifts

The U.S. Export-Import Bank has suspended or removed four officials as investigators look into allegations of improper gifts and kickbacks as well as efforts to direct contracts to favored businesses, the Wall Street Journal reported on Monday.

The Ex-Im Bank, which helps finance exports of U.S. goods and services, issued a statement declining comment on "personnel matters" and saying it has "a comprehensive system of internal controls."

The Journal, citing unidentified sources familiar with the matter, reported that Johnny Gutierrez, an official in the Ex-Im Bank's short-term trade finance division, allegedly took cash payments in exchange for attempting to assist a Florida company in getting federal financing to export construction equipment to Latin America.

The newspaper quoted Douglas McNabb, Gutierrez's lawyer, as confirming that Gutierrez was placed on leave after an investigation by the agency's inspector general, but said he declined to comment on details of the probe.

Two of the other officials were being investigated over allegations of improperly awarding contracts while the third was being investigated over accusations of "accepting gifts on behalf of a company seeking financing," the newspaper reported.

The report comes at a time of heightened scrutiny of the Ex-Im Bank as U.S. lawmakers debate whether to reauthorize the 80-year-old agency. The newly elected No. 2 Republican in the House of Representatives said on Sunday he opposed renewing its charter.

"The Export-Import Bank has zero tolerance for waste, fraud and abuse. Due to provisions of the Privacy Act, we are prohibited from commenting on any specific personnel matters," Ex-Im Bank spokesman Matt Bevens said in a statement.

"That said, the Export-Import Bank takes extremely seriously its commitment to taxpayers and its mission to support U.S. jobs. The Bank takes thorough and immediate action when any hint of misconduct or fraud is detected by the safeguards we have in place, including working closely with our Inspector General," Bevens said.

The Ex-Im Bank statement said it operates a confidential fraud, waste and abuse hot line to allow anonymous reporting and that its management "acts quickly to enforce and prosecute wrongdoing."

Representative Kevin McCarthy, the incoming House majority leader, said on Sunday the bank's role should be taken over by the private sector. Asked if he would allow the bank's charter to expire at the end of September, McCarthy said: "Yes, because it's something that the private sector can be able to do."

The chairman of the House Financial Services Committee, Jeb Hensarling, previously called on fellow Republicans to oppose renewing the charter. He said the bank helps some companies at the expense of others.

Hensarling's spokesman, David Popp, issued a statement saying Fred Hochberg, chairman and president of the Export-Import Bank, "should come fully prepared to discuss all details surrounding these troubling accusations" during a hearing before the committee on Wednesday.

Scrapping the bank would be a blow to Boeing Co, Caterpillar Inc, General Electric Co and other U.S. companies that rely on Ex-Im financing to make sales in export markets where commercial lending is scarce. (Reporting by Will Dunham; Editing by Mohammad Zargham)