Braun Introduce Legislation To Prohibit Export-Import Bank From Financing Individuals With Tax Debts

0

U.S. Senator Mike Braun (R-IN) and U.S. Senator John Kennedy (R-LA) introduced legislation that will prohibit individuals delinquent on their taxes from using the Export-Import Bank.

“The Export-Import Bank should not serve as an ATM for tax delinquents and this legislation will address this loophole, while also rooting out potential fraud from dozens of companies,” said U.S. Senator Mike Braun. 

“American taxpayers shouldn’t be forced to subsidize businesses that haven’t even paid their own taxes, and I’m proud to work with Sen. Braun to bring accountability to the Export-Import Bank,” said U.S. Senator John Kennedy.  

BACKGROUND:

The Export-Import Bank of the United States (EXIM) requires companies applying for certain financing to self-certify that they do not have delinquent federal debt. The Government Accountability Office (GAO) analyzed federal data and identified billions of dollars in authorized EXIM transactions associated with dozens of companies that potentially fraudulently applied for financing.

GAO FINDINGS:

  • Federal law states that applicants who are delinquent on federal debts may not receive federal direct loans, loan guarantees, or loan insurance until the delinquent debt is satisfactorily resolved.
  • Financial pressures potentially incentivize participants or employees to commit fraud on applications to use the EXIM.
  • Using data from the System for Award Management (SAM), GAO found that, from calendar years 2014 through 2016, EXIM authorized transactions with an aggregate authorization value of about $1.7 billion that were associated with 32 U.S.-based companies that had a delinquent federal debt indicator in SAM in the same month EXIM authorized these transactions.

CHANGES TO EXIM:

  • The EXIM bank could use SAM data and data-analytical approaches to detect applicants and participants with potential delinquent federal debt and work with the Internal Revenue Service to confirm delinquencies.
  • Companies who have fraudulently certified not having federal debt would lose access to the EXIM funding, and applicants would similarly be denied if they held such federal debt.
  • The bill allows the President to waive the prohibition if the President determines that the work being carried out by an entity with delinquent federal debt significantly affects the interests of the United States.
  • The bill does not consider seriously delinquent federal debt as debt that is being repaid in a timely manner.
  • EXIM concurred with GAO’s recommendation to use available data instead of self-certification to prevent companies with delinquent federal debt from using the EXIM.

 

RELATED ARTICLESMORE FROM AUTHOR