Delta signals new push for Ex-Im reforms

Delta Airlines plans to again be a central player in the debate over the Export-Import Bank, CEO Richard Anderson said Tuesday.

 

The government-run Ex-Im Bank’s charter expires in September. House conservatives argue the bank provides corporate welfare and are leading a charge to have it disbanded. 

 

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) wants the charter to be allowed to expire, and at this point Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are deferring to him.

 

{mosads}Delta and its in-house lobbyist, Andrea Fischer Newman, were deeply involved in the reauthorization of the bank in 2012. Newman has close ties to Cantor, and the 2012 bill, which Cantor and House Minority Whip Steny Hoyer (D-Md.) negotiated, contained some reforms to the bank that Delta had sought.

“We have played a significant role opposing it. And it’s not so much the reauthorization, it’s the bank needs to be reformed,” Anderson said. “There’s no transparency around what it does with the taxpayer’s money in the United States, and it creates a huge subsidy for state-owned competitors of carriers in the United States.”

The Ex-Im Bank aims to increase U.S. exports by providing low-cost financing to foreign customers of U.S. companies. 

 

It is a major player in the wide-body aircraft sector because it enhances the ability of foreign airlines to buy Boeing aircraft.

 

Delta has said this assistance is hurting its business. Anderson said that foreign airlines are continuing to get interest rates on loans through the Export-Import Bank at 300 basis points lower than Delta can obtain privately.  

 

“That’s just not right,” Anderson said Tuesday.

 

The CEO said Delta believes Ex-Im has a role to play in helping developing countries without robust private sector financing. 

 

He said that “it shouldn’t be providing financing in any instance” where there are adequate private-sector alternatives. Anderson said that transparency provisions in the 2012 bill are not being followed and the loan rates are still below market.  

On Tuesday, Newman wrote to Ex-Im Bank President Fred Hochberg to blast the bank for claiming that one of its loan guarantees supported 400 jobs in a Delta division that services aircraft owned by Brazilian airline GOL.

The claim runs counter Delta’s argument that Ex-Im financing is costing U.S. jobs. 

“Despite highlighting the bank’s misleading statements directly for you, we recently learned that Ex-Im has continued to promote these false and misleading statements, including making false statements in communications with Members of Congress,” Newman wrote. 

The Bank’s original press release on the loan guarantee highlighted Paulo Kakinoff, chief executive officer of GOL saying “the availability of Ex-Im Bank’s financing was the key to our choosing this U.S. provider for these services and is strengthening the partnership between our two companies.”

Newman said “not a single job” was added and “not a single job would have been lost” without the GOL transaction supported by Ex-Im.

The Export-Import Bank said Tuesday that it is sticking to its 400 jobs supported estimate. 

“The Bank stands behind the accuracy of its press release and communications to members of Congress,” said Matt Bevens, an Ex-Im Bank spokesman.

— This story was last updated at 6:30 p.m.