Export-Import Bank: A Lender In A Blender
Feb 02, 2018 09:56AM
By Emily Stevenson
By John Jeter
The Export-Import Bank gets called many things: a corporate-welfare financier, a cog in the crony-capitalist machine, another federal agency weighing down a bloated bureaucracy; and, on the flipside, a job-creator that returns billions to the U.S. Treasury, while helping dozens of South Carolina exporters. One thing Ex-Im Bank doesn’t get much of: media-ready comments from Palmetto State political leadership or from at least some companies that use the currently hobbled agency.
“You’re not going to find many who will talk about it,” says Ted Pitts, president and CEO of the South Carolina Chamber of Commerce. “Just because it’s so politicized, they want to stay out of the fray.”
Sure enough, efforts to reach out to local Ex-Im customers dead-ended, with emails and phone calls unreturned. This publication sought comments from several companies, including a Lowcountry manufacturer that used Ex-Im’s services to the tune of nearly $5,300 on slightly more than $6,000 worth of exports, as well as from an Upstate multinational corporation that turned to the Bank for help with exports topping $25 million. None responded.
Seems few were willing to discuss the wholly owned federal corporation, which was chartered in 1934. While it doesn’t compete with private-sector lenders, the export-credit agency provides loan guarantees and financing options for U.S. importers and exporters. The Bank helped 55 South Carolina exporters—34 of those small businesses and 13 of them minority- or women-owned—whose total export values reach $4 billion, its website says.
One of only a couple of respondents: Sen. Tim Scott, who serves on the Banking Committee.
Last December, the South Carolina Republican helped torpedo President Trump’s Bank-chief nominee, former New Jersey Rep. Scott Garrett. In 2015, Garrett said the independent organization “embodies the corruption of the free enterprise system,” providing “taxpayer-funded welfare for megacorporations.” The Senate panel rejected the nomination.
Scott’s spokesperson, Michele Exner, had only this to say in an emailed statement: “My belief is that we need to both reform the Export-Import Bank and ensure it continues to function as an important tool for American businesses large and small.”
Another email added: “While in need of reform, Ex-Im Bank has proven to be an important economic driver for the nation, and that is why Sen. Scott has made it a priority to ensure the right person is nominated to head the Bank. He wants to make sure the agency benefits taxpayers and continues to support manufacturing jobs right here at home.”
Asked about specific reforms, Scott’s office provided no additional comment.
Meanwhile, spokespeople for Gov. Henry MacMaster and Sen. Lindsay Graham didn’t return calls or emails. However, in July 2017, Graham told Bloomberg TV: “I want to get the Bank up and running more than anybody else. I want to get the Administration to give us a better nominee, but the Ex-Im Bank is a lifeline for Boeing, G.E., and a lot of small companies in South Carolina.”
It’s not as if the Ex-Im Bank isn’t open for business. It’s just that, as one of 96 export-credit agencies operating worldwide, the U.S. lender can’t flex its potential because a quorum of three board members is required to approve deals larger than $10 million.
That, according to a January 2018 article in Global Trade Magazine, “meant the Bank was only able to operate its short- and medium-term programs in 2016 and has resulted in more than $30 billion of potential transactions being stuck in the Bank’s pipeline.”
Those transactions could add as many as 200,000 jobs, the article said, adding that the Bank “since 2008 has supported over 1.4 million private-sector U.S. jobs, including 52,000 in fiscal year 2016.”
As for South Carolina, Pitts was quoted in a McClatchy wire story, published January of this year, as saying: “We’ve got about 17,000 workers in the state who could be impacted if Ex-Im were not to be fully operational in the near future.”
Pitts also pointed out that during a five-month-long closure in 2015, a multinational corporation in South Carolina was forced to turn to a French credit agency to finance a multimillion export, costing 400 jobs that would have been created in Greenville.
“The reasons it’s been so politicized?” Pitts tells this South Carolina magazine. “There’s no specific answer. Conservatives have looked for programs to shut down, to shrink down, and saw Ex-Im as one of the entities to try to downsize.
“For whatever reason, they see this as a victory they can obtain, but I don’t think they thought it through with the benefits it can provide American workers.”