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Beyond the Rhetoric: U.S. Export Bank Subsidizes Fortune 100

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HarryAlford2

By Harry C. Alford
NNPA Columnist

 

This seems like an odd question. Capital access is the lifeblood of business growth and job creation. Thus, all vehicles that provide such should be welcomed. As the President/CEO of the National Black Chamber of Commerce, it is assumed that I would support all avenues of capital access. However, I am starting to have big doubts about one vehicle.

The Export-Import Bank is a government-owned organization that was started by President Franklin D. Roosevelt as an apparatus for American firms to have more opportunity to export business to the Soviet Union. Most modern nations have their own EX-IM bank and even developing nations such as Ghana have just opened their own to help their businesses export to Europe, Asia and the United States.

Unlike most nations our EX-IM Bank has become controversial. It has just lost its charter as of June, and funding is frozen until or unless Congress reauthorizes funding through legislation. By now, you have seen television ads asking for your support in telling Congress to reauthorize the EX-IM Bank. Immediate action is required and if it does not happen within the next six months the doors of the EX-IM Bank will come permanently shut.

Most businesses are not familiar with the EX-IM Bank and that is a flaw in its marketing or outreach. It may also be an indicator that it is not inclusive. I don’t know of one Black owned firm that has received financing from this entity. Many billions of dollars have been provided and not one Black owned firm has received a penny. I am still searching for proof that I may be wrong but no one, including the EX-IM Bank has corrected me.

The bank claims to have a small business program. Supposedly, 20 percent of its financing goes to such firms. However, its definition of a small business is not inconsistent with the Small Business Administration size standards. They accept businesses with more than $21.5 million in sales and up to 1,500 workers as being small. This is hardly small. Still the same, none of them are Black owned.

Three years ago, the bank sent a representative to give a presentation on their services and announce that they were having a new directed outreach initiative to recruit Black owned firms to take part in their services. That person, who was a vice president, was soon gone from the bank and we haven’t heard a sound since. Some of our members voiced discontent at that meeting noting their negative experiences in trying to get financing from the EX-IM bank. Discontent is a conservative description.

The services of the EX-IM Bank are overwhelmingly enjoyed by the Fortune 100 corporations. Giants such as Boeing, Bechtel, General Electric, Caterpillar, etc. The big problem here is that they don’t need government assisted financing. They can do well in the normal financial sectors. In essence, this is a kind of corporate welfare. That is the claim opponents of this entity allege and I can’t argue against that.

Then there is another big issue with this entity. It seems to be filled with mismanagement, fraud and corruption. There is a vast amount of news articles about the history of such activity at the EX-IM Bank.

According to the Daily Signal newspaper: “An examination of EX-IM fraud cases reveals a disturbing pattern of carelessness in doling out taxpayer subsidies. For example, the bank approved 96 loan transactions in a two-year period for Gangland, USA, which purported to export electronics from Miami to South America. According to prosecutors, company owner Jose L. Quijano received more than $3.6 million in fraudulent loans from the bank.”

“Similarly, the bank approved 18 loans involving $13.6 million to Leopoldo Parra, who pleaded guilty in 2012 to wire fraud and conspiracy to commit money laundering. According to prosecutors, Parra and his co-conspirators fraudulently obtained the loan proceeds and used them for personal gain. These and dozens of other cases reflect the hazards inherent in government subsidies.

That is, agencies such as EX-IM do not engage in meaningful due diligence when taxpayers are on the hook for any or all losses. The Inspector General noted in a 2012 report to Congress that the bank failed to collect adequate credit information and history from borrowers and lacked sufficient compliance personnel relative to the increasing size of the bank’s finance portfolio, which is expected to exceed $140 billion by September 30, 2014. It also concluded that EX-IM risk management framework and governance structure are not commensurate with the size, scope and strategic ambitions of the institution.”

Yes, it never fails. Discrimination and corruption are “first cousins.” Where there is one you will most certainly find the other. It appears that the EX-IM Bank is no exception. The NBCC position is this: We will not fight to keep or kill the EX-IM Bank. This entity has no impact on our membership. Maybe it would change its ways if it survives. This is quite doubtful.

 

Harry C. Alford is the Co-founder, President/CEO of the National Black Chamber of Commerce. Website:www.nationalbcc.org Email: halford@nationalbcc.org.

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Commentary

First in a Series on Jobs in Oakland. City Government; Please Do No (More) Harm

Oakland city government declares war on the unemployed. An overstatement? Not really.

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High Quality stock aerial photos of downtown Oakland with Lake Merritt in the foreground.

Oakland city government declares war on the unemployed. An overstatement? Not really.

City administration professes concern for its residents who need help with access to jobs and training, while at the same time failing to issue contracts to the community organizations that stand ready to provide needed services.

The city council approved these contracts in June. As of late September, they have not been issued by the city administration.

Q: What does this mean? A: Non-profit organizations, operating on shoestring budgets in the best of times, have been required to advance their own funds in July, August, and September to serve the unemployed, with no reimbursement by the city because as the administration says, “Your contract has not been signed yet.”

Another impact: the workers who provide front line job services may not receive their paychecks on time…. creating unnecessary instability in their own households.

And who is responsible for issuing these contracts? Yup…it’s the city…. painfully tone deaf to the needs of the community, particularly those on the economic margins. Most of those served with job help are Black and Latinx residents who consistently suffer double digit unemployment. Many are returning home after incarceration.

And for this level of harmful disregard, the city receives  28 percent of scarce job training funds. Astonishing, since the city provides no direct services to job seekers.

As Oakland struggles with its horrific crime wave, it seems that attention would be paid to root causes, joblessness being paramount among them. Instead, the city administration seems intent on hobbling the very groups who stand ready to help. This happens year after year…. with no apparent consequences to an impenetrable bureaucracy.

Oakland, we can do  better than this.

We must.

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

 

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Let’s Talk Black Education; Governor Newsom Should Close the Vaccination Loophole for School Employees

It leaves the rest of us — including the students — without a teacher, cafeteria worker, or janitorial staff. We have to throw on five or six hats in order to ensure that our students are educated.

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Let's Talk Black Education with Margaret Fortune

The honeymoon is over in communities where the Delta variant has taken hold.

Since back-to-school, I’ve spent weeks filling in for principals, supervising children, checking children’s temperatures and providing them masks, directing traffic in the parking lot, picking up garbage, wiping down cafeteria tables — all of which are required to run safe schools in these times.

I’ve talked to other heads of schools that can say the same thing or something similar since the start of this school year. The same culprit continues to affect us all — COVID-19. However, normally we have a village to manage these tasks. Now, we don’t.

Staffing shortages are severe and there are no substitutes to be had.

Further aggravating the situation, are public health rules that require paid school staff who test negative for COVID-19 but remain unvaccinated to stay home for 10 days at a time when they are exposed to someone who tests positive.

It leaves the rest of us — including the students — without a teacher, cafeteria worker, or janitorial staff. We have to throw on five or six hats in order to ensure that our students are educated.

Necessary? Yes. Sustainable? No.

Gov. Gavin Newsom took a good first step when he required school employees to be vaccinated, but he left a gaping loophole. He allowed school staff to ‘test out’ of being vaccinated by committing to take a COVID test twice a week.  Then he put the burden on schools to become COVID testing centers overnight for the employees who refuse to get vaccinated.

The result is that these staff who refuse vaccination have to be benched for two weeks every time they get exposed to someone who tests positive for COVID-19. Imagine, if you will, being a part of a 40-person team and every week there are 10 people who are forced to quarantine for two weeks, leaving 30 team members to do the work of 40 during that first week.

That’s one person doing their job and the additional work of three coworkers. These types of staffing outages are debilitating schools across the state. There are news reports of schools having to shut down classrooms for lack of staff.

Some major school systems with the political clout have taken matters into their own hands. Los Angeles Unified, for example, has closed the loophole and is requiring all school employees to be vaccinated.  The state of California should do the same.

California has over 6 million students who can’t afford for us to agree to anything less than 100% vaccination for school employees.

Yes, the policy could force out educators who refuse to get vaccinated but, they won’t be working anyway if they get exposed to a positive case.  Essentially, the unvaccinated have become hard to employ in a school setting.  They can go out at any time and take down our schools with them.

We can’t risk that.

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Pass the Freedom to Vote Act: Time Running Out to Protect Right to Vote in 2022 and Beyond

Ideally, voting rights should be a nonpartisan issue. Congress repeatedly passed extensions of the Voting Rights Act that were signed by Republican presidents. But right-wing politicians and judges have spent years trying to undermine the Voting Rights Act in the name of “states’ rights” or “state sovereignty.”

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US Bill of Rights and Flag with spot lighting

Republican-controlled state legislatures have imposed new voting restrictions. They are getting ready to create more safe congressional seats for Republicans through abusive partisan redistricting. They are undermining faith in elections with false claims about election fraud and demands for fake “audits.”

The good news is that there is new momentum in Congress and a new bill to protect our democracy. We need to get it passed.

The new Freedom to Vote Act would protect the right to vote, end unfair partisan gerrymandering, and shine a light on the flood of dark money that allows billionaires to buy our elections in secret. It includes key sections of the earlier For the People Act, which passed the U.S. House of Representatives but was blocked in the Senate by Republican filibusters.

The Freedom to Vote act also addresses one of the worst things about some of the new voter suppression laws: provisions that give state officials the power to override voters and overturn election results.

There are other good things in the bill. It would make Election Day a federal holiday. Every state would have automatic voter registration, early voting and drop box accessibility. These would be major advances in making voting more accessible to everyone.

Voting rights advocates are rallying support for the Freedom to Vote Act. One of the sponsors, Democratic Sen. Joe Machin of West Virginia, worked hard to come up with a bill that he could support. He still hopes to get some Republican senators to join him.

That is an uphill battle. Republican Senate Minority Leader Mitch McConnell has signaled that no Republican senators will support this compromise. And he will use the Senate’s filibuster rules to prevent the Senate from passing election protections that are supported by huge majorities of the American people—something he has already done with the For the People Act.

Ideally, voting rights should be a nonpartisan issue. Congress repeatedly passed extensions of the Voting Rights Act that were signed by Republican presidents. But right-wing politicians and judges have spent years trying to undermine the Voting Rights Act in the name of “states’ rights” or “state sovereignty.”

With help from right-wing justices on the Supreme Court, states have imposed all kinds of new voting restrictions in recent years.

The number of new restrictive voting laws jumped massively after former President Donald Trump was defeated in last year’s presidential election. Grassroots organizing helped drive strong turnout among Black voters in key states, and Republicans have decided to respond by making it harder for people to register and vote.

That makes it clear that the new voter suppression rules have nothing to do with “election integrity” and everything to do with maintaining power at all costs.

The Constitution very clearly gives the federal government the right to step in when states undermine democracy with restrictive and discriminatory voting rules. That’s what Congress did more than 50 years ago when it passed the Voting Rights Act.

President Joe Biden and Democratic leaders in the U.S. Senate must do whatever it takes to pass the Freedom to Vote Act. With democracy and voting rights at stake, we cannot let Jim Crow-era filibuster rules in the U.S. Senate have the final word.

Ben Jealous serves as president of People For the American Way.

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