Exclusive: Export-Import Bank admits errors in small biz data

Thu Nov 13, 2014 4:50pm EST
 
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By Howard Schneider and Krista Hughes

WASHINGTON (Reuters) - The U.S. Export-Import Bank has mischaracterized potentially hundreds of large companies and units of multinational conglomerates as small businesses, a flaw in its record keeping that could undermine the export lender's survival strategy.

A Reuters analysis showed companies owned by billionaires such as Warren Buffet and Mexico's Carlos Slim, as well by Japanese and European conglomerates, were listed as small businesses and Ex-Im acknowledged errors in its data in response to those findings.

Bank officials and supporters have used the Ex-Im's support for American small business as a first line of defense against a campaign by conservatives to shut it down as an exponent of "crony capitalism."

The bank won a nine-month extension of its mandate in September and faces a bruising battle over the next seven months to secure its future.

Critics reacted quickly.

“Rarely does Ex-Im miss a (public relations) opportunity to claim that it primarily helps small business, but Ex-Im is again playing fast and loose with the facts," said Representative Jeb Hensarling, a Texas Republican who chairs the House Financial Services Committee. "The bulk of Ex-Im’s help indisputably goes to large corporations that can finance their own operations without putting it on the taxpayer balance sheet.”

A comparison of some 6,000 businesses characterized by Ex-Im as "small" with information supplied by corporate data collector Dun & Bradstreet, which Ex-Im also uses to vet applicants, and other sources turns up some 200 companies that appear to be mislabeled and many more whose classification is uncertain.   Continued...

 
Chairman and President of the Export-Import Bank Fred Hochberg pauses during the second day of the Reuters Aerospace and Defense Summit in Washington, September 10, 2014. REUTERS/Larry Downing