Ex-Im opponents adopt new tactic in battle over bank

Conservatives have identified a new line of attack  to use against the Export-Import Bank in the event that the embattled institution wins reauthorization in Congress this summer.

The bank’s critics plan to block President Obama from filling vacancies on Ex-Im’s board of directors, a strategy that if successful would significantly weaken the bank’s operations.

{mosads}Opponents of Ex-Im, which helps facilitate financing for U.S. companies with projects in foreign markets, view the strategy as a way to essentially shutter the bank should their efforts to block reauthorization fall short.

Tea Party groups have argued that the bank, which saw its charter expire last week, picks winners and losers by financing some businesses and not others.

“Any efforts to revive this corrupt and expired bank would be step backwards for hardworking taxpayers,” said James Davis, spokesman for the group Freedom Partners. “Ex-Im is already supposed to be working on its plan for an orderly wind-down. Their board is a perfect place to start.”

A source close to Freedom Partners went further, saying the group “will oppose any nomination to Ex-Im’s board.”

Ex-Im supporters, including business groups, Obama, some Republicans and virtually all Democrats, are pressing legislation to reauthorize the bank.

But according to Ex-Im’s charter, three seats on the five-member board must be filled in order for it to approve transactions exceeding $10 million. Come July 20, there will be three members on the board, but that number could drop to two soon after.

Obama reappointed Patricia Loui, whose term is set to expire, to the board on March 10. Ex-Im’s charter gives Congress six months to confirm a nomination, which means the Senate must confirm Loui before Sept. 10 or the bank won’t be able to finance projects of more than  $10 million.

About 84.1 percent of Ex-Im financing went to deals exceeding $10 million between 2007 and 2014, according to Veronique de Rugy, an Ex-Im critic who researches the bank as a senior research fellow at George Mason University’s Mercatus Center.

De Rugy said that “blocking these nominations would be an effective way to cripple the Ex-Im Bank.”

Already, conservative critics are signaling opposition to any action to fill seats on the board, particularly at a time when Ex-Im is, at least for the time being, without a charter.

“Moving nominees for an expired agency is politically untenable,” added Dan Holler, a spokesman for Heritage Action, which also opposes the bank. “The bank’s charter has expired, and there is absolutely no reason for the Senate to process these nominations.”

The business community, meanwhile, has rallied Democrats and centrist Republicans behind the 81-year- old bank. Some expect that lawmakers will attach an amendment to the transportation funding bill later this month that would extend the bank’s charter.

“Proponents of Ex-Im, which includes majorities in the House and Senate, are well aware of the secondary issue of board vacancies and are prepared to handle the issue at the appropriate time,” said one source working to reauthorize the bank.

Another source working to reauthorize the bank said that the tactic seems “pretty desperate from opponents who know they are ultimately going to lose this misguided fight.”

The source noted that the Senate showed overwhelming support for the bank last month, when 65 lawmakers voted to support it.

Officials for Senate Majority Leader Mitch McConnell (R-Ky.) and the White House declined comment. A spokesman for Senate Banking Committee Chairman Richard Shelby (R-Ala.), whose panel would have to approve the nominees, couldn’t immediately be reached for comment.

Sen. Heidi Heitkamp (D-N.D.), who has emerged as a top supporter of the bank in the upper chamber, said it was important to fill the seats.

“We need to have the open positions on the board filled,” said Heitkamp. “But for the board to function, we first have to reauthorize the Export-Import Bank so it can actually do its job. … That’s what I’m first pushing Senate leadership to do.”