Bank Run

Tea Party Republicans want to shutter the Export-Import Bank. Would American companies suffer if the government didn't lend an occasional helping hand?

When FirmGreen Inc., a small California energy firm, wasn't able to secure private financing it needed for a major expansion three years ago, company executives reached out to the federal government's Export-Import Bank for help. The bank came through, giving a Brazilian company $48 million in loans so it could buy FirmGreen technology to convert gas from one of the country's largest landfills into natural gas.

The company has been vying for a similar contract in the Philippines, but it wasn't so lucky this time around. The culprit? Growing uncertainty about whether the bank will survive a concerted effort by Republicans to kill an entity that they believe improperly picks winners and losers and funnels taxpayer money to companies in China and Russia.

The future of the Export-Import Bank has become the latest issue to divide the Republican Party, with Tea Party-backed lawmakers proposing to allow its authorization to expire at the end of September and traditional GOP supporters in the business community lobbying for it to stay open. Letting the bank's charter lapse, supporters say, would make it harder for American companies to sell their products overseas, give other nations a competitive advantage over the United States, and jeopardize hundreds of thousands of American jobs.

No matter, say powerful Republican critics like incoming House Majority Leader Kevin McCarthy (R-Calif.), who shocked Republicans from the party's pro-business wing Sunday when he told Fox News that he would support letting the bank expire. "I think Ex-Im Bank is one that government does not have to be involved in," he said. "The private sector can do it."

House Financial Services Committee Chairman Jeb Hensarling (R-Texas), another leading bank critic, says he's also concerned that the bank could inadvertently harm American national security. "The taxpayer money goes overseas to China and Russia -- nations that openly challenge our economic and security interests," he said at a hearing over the bank's future Wednesday.

If Hensarling and his allies get their way, the United States would become the only major economy that doesn't bolster trade with government-backed loans. Created during the Great Depression by Franklin D. Roosevelt, the Export-Import Bank helps finance the export of American goods, either by lending directly to foreign companies to buy goods or services from U.S. businesses or by insuring the deal for the U.S. company. The bank authorized $27.3 billion worth of loans that made $37.4 billion worth of exports possible and supported 250,000 U.S. jobs in 2013, according to the bank and the U.S. Chamber of Commerce.

Bank President Fred Hochberg said the institution has made money since it was reauthorized in 2012 and returned nearly $2 billion to the U.S. Treasury. He also argued that the agency helps U.S. companies remain globally competitive.

"Every industrialized country has its own version of Ex-Im, and each is tasked with supporting the domestic exports of their respective nations," Hochberg testified before the House Financial Services Committee Wednesday.

Boeing, the United States' largest exporter and the bank's biggest beneficiary, said letting the bank's charter lapse would make it harder to sell its airplanes abroad. John Kvasnosky, a spokesman for the firm, said in a statement that the bank's demise would mean "Boeing will be placed at a competitive disadvantage to Airbus and other airplane manufacturers, all of whom have government export credit agencies to support customer financing."

Delta Air Lines CEO Richard Anderson, by contrast, backed critics' charges that the bank was indeed subverting the free market by picking winners and losers. Anderson told the House panel Wednesday that when the bank helps Boeing sell planes to foreign airlines, some of which are state-owned, Delta loses out. "We have to compete against deeply subsidized government airlines that are in turn deeply subsidized by our government," Anderson said.

The bank's survival seems increasingly unlikely given the power of its GOP critics, but it does have some Republican support on Capitol Hill. On Monday, for instance, 41 House Republicans sent their leaders a letter urging them to reauthorize the bank. On Tuesday, Senate Majority Leader Harry Reid of Nevada and Minority Leader Mitch McConnell of Kentucky said they wanted the Senate to debate a reauthorization bill. Although McConnell has pointedly declined to predict its fate or say whether he supports reauthorization, Sen. Chuck Schumer (D-N.Y.) said at a breakfast hosted by the Wall Street Journal Wednesday that he believes the Senate can pass the bill and then use a conference committee to try to save it.

Bank supporters were dealt another blow Monday when the Wall Street Journal reported that four officials are being investigated over allegations of misconduct, including accepting gifts and cash in exchange for government financing.

Still, business groups haven't given up the fight to save the bank. Christopher Wenk, the Chamber of Commerce's senior director for international policy, said the pro-business advocacy group was calling on state and local chapters to contact their member of Congress when the lawmakers are home during the July Fourth and August recesses, especially in key districts.

"In a perfect world, we wouldn't need an export-import bank, but if you look at what the rest of the world is doing to support their exporters it would be asinine for the U.S. to unilaterally disarm," Wenk said. "September 30 is 27 legislative days from right now, so there's a real urgency about this."




Why aren't Twitter, Facebook, and YouTube doing more to keep ISIS from spreading hatred and violence on social media?

Shortly after fighters with the Islamic State of Iraq and al-Sham (ISIS) seized Iraq's second-largest city of Mosul earlier this month, the group's Twitter feed was suddenly suspended by the company. For ISIS, which has come to depend upon social media as a propaganda outlet and a recruitment tool, a useless Twitter account could have been a significant strategic setback. But within the past few days, the jihadist group has come back online with a new account that Twitter hasn't touched, leaving ISIS to spread images of its conquest of broad swaths of Iraq with impunity, analysts say.

Twitter's uneven success -- some say unwillingness -- in battling ISIS underscores the difficulties social media companies are having in stopping jihadist groups from glorifying their exploits and spreading their ideology via the Internet. Despite attempts by the Iraqi government to block access to popular social media services and enforce an Internet service blackout in provinces held by ISIS, the group has been able to tweet invective, post videos of mass killings to YouTube, and spread messages to followers on Facebook, analysts say. And there's little the companies can do to stop them.

Facebook, YouTube, and Twitter are ISIS and other extremists' platforms of choice and the most widely used social media systems in the world. But none of those companies proactively monitor their users' accounts for terrorist propaganda that might violate their terms of service, including the very photos, videos, and rhetoric ISIS is posting, company representatives said. To do so is practically impossible, they say, because there's simply too much information to review. Facebook users post 300 million new photographs every day. On YouTube, users upload 100 new hours of video every hour. And on a typical day, people send more than 500 million tweets, an average of 5,700 per second.

"It's absolutely Whac-A-Mole," said David Belson, editor of the State of the Internet Report, published by web services company Akamai Technologies, which monitors Internet access around the world and has followed social media companies' attempts to rid their platforms of terrorist propaganda.

To get the social media companies to remove material or suspend accounts, users have to flag specific content that may violate the companies' rules on what's permissible to post. For ISIS, that means content that violates Facebook, YouTube, and Twitter's prohibitions against the actual depiction of violence or making physical threats against others -- and there's plenty of it. The group has posted gruesome videos of mass killings and images of ISIS fighters overrunning Iraqi military positions and commandeering equipment. It has also used social media to encourage attacks on targets in the West.

Spokespersons at Facebook, YouTube, and Twitter all said that videos, photos, or messages showing ISIS attacks or glorifying them violate company standards and have been removed after being flagged by other users. But the companies don't keep track of how often that's happening, which makes it effectively impossible to gauge how well their efforts to combat jihadist rhetoric -- such as they are -- actually are working.

"If you promote ISIS or their activity, we will take down that content," said an employee at one social media company who asked not to be identified when discussing the particular steps it takes to block the terrorist group. The employee emphasized that debating ISIS's actions or engaging in a conversation about the legitimacy of its goals wouldn't automatically trigger a response by the company. "Lots of people are making comments about ISIS, and some are arguing that the group is making valid points. That's an opinion," the employee said, and not necessarily an endorsement of ISIS's actions. "But if you say that you support ISIS and what they're doing, or that you hope they can recruit more followers, we will take down that content."

Not everyone wants them to. A senior intelligence official said that ISIS is "very active on social media," and that U.S. intelligence analysts "rely very heavily on what the group is posting" to provide insights about its plans and potential next steps. A second U.S. official said that while the intelligence agencies rely on many streams of intelligence, social media was an important one for assessing ISIS's "motivations and their actions." For U.S. intelligence agencies now trying to track ISIS's next move in Iraq, in advance of possible airstrikes, the group's violent tweets and videos may be too useful to shut down.

Still, the social media companies say they are trying to do just that. Inside Facebook, YouTube, and Twitter's offices, teams of analysts -- which can include linguists -- review every piece of content flagged by users as potentially violating the rules. It doesn't matter if a video, photo, or tweet is flagged once or a hundred times -- each one gets reviewed. Representatives for Facebook and YouTube said the employees who review potentially violent content work in 24-hour shifts. "We have a team of professional investigators both here in the U.S. and abroad who enforce these rules," a Facebook spokesman said. "Where hateful content is posted and reported, Facebook removes it and disables accounts of those responsible."

Facebook, YouTube, and Twitter now keep track of so-called "repeat offenders," or users who post offensive content from multiple accounts, including new ones they set up quickly after being kicked off. YouTube will also "terminate any account registered by a member of a designated Foreign Terrorist Organization and used in an official capacity to further its interests," said a company spokesperson. (ISIS is one such organization, as defined by the State Department.) But the company doesn't disclose who those users are. All three companies said they wouldn't comment on individual users whose accounts were suspended or who were flagged for posting violent content.

Governments do ask social media companies to remove some content, and in some cases they demand it. Facebook, for instance, has blocked access in Germany to material that denies the existence of the Holocaust, which is a federal crime there. Every six months, Twitter, YouTube, and Facebook disclose the number of times that governments request or require that information be removed. But the companies say they don't keep track of whether the offending material was linked to a terrorist group. In any event, it appears that most of government requests are to remove material considered defamatory to that country's political figures or elected officials.

Terrorists and extremists have been crowing about their exploits and recruiting on social media for years, and social media companies have been battling them for just as long, with limited success. In December 2012, Facebook suspended the account of Umar Media, the Pakistani Taliban's media arm, because it violated the company's rules against promoting terrorism, but a new account was back up within two weeks. The following month, Twitter suspended al-Shabab's account after the group posted a video threatening to kill two Kenyan hostages, violating Twitter's prohibition on violent threats. That did nothing to dent al-Shabab's relentless use of the platform; seven months later, the group was live-tweeting its rampage in the Westgate Mall in Nairobi.

The Westgate shooting was a rare instance in which a social media company actively hunted for a terrorist group's accounts and suspended them. Largely assisted by an independent terrorism analyst, J. M. Berger, Twitter suspended account after account used by al-Shabab to tweet about the mayhem in the mall. And those efforts were apparently successful: After several accounts were suspended, al-Shabab seemed to relent and didn't return to gloat about the shootings.

"After Westgate, Twitter decimated al-Shabab's online networks, including suspending a lot of low-profile accounts that didn't make headlines," Berger said. But in Iraq, with ISIS, the company hasn't been nearly as aggressive. "Twitter remains the most difficult place to get knocked offline, although it has become somewhat more aggressive in recent months," Berger said. "Facebook has been very robust for some time in trying to deal with jihadi content, and they appear to be proactive in going after terrorist accounts. YouTube has a robust reporting system [among its users] which works OK, some of the time."

But the odds are stacked against the companies. The sheer volume of posts and the ease of opening a new account virtually guarantee that ISIS and its ilk can mount their campaigns without obstruction. And absent pressure from the United States to crack down on ISIS's tweets and Facebook updates about its attacks in Iraq, it's hard to imagine the company doing much more than it is now to stop the jihadist group.

"I'm not sure exactly where companies should draw the line, but I think it should be tighter than it is now," Berger said. "We have situations where foreign fighters are encouraging lone wolf attacks in the West, Twitter feeds are being used to herald insurgent attacks and intimidate populations, and images of violence are so widespread that they depress even me, and I have developed a pretty strong stomach for this stuff."