WASHINGTON — The White House announced April 14 that President Donald Trump had nominated to the board of the Export-Import Bank two former members of Congress, one of them a staunch critic of the bank’s lending practices.
The nominees, if confirmed by the Senate, would restore a quorum to the board and allow it to resume approving deals valued at more than $10 million, including those for commercial satellites and launches.
In a statement issued late April 14, the White House announced that President Trump was nominating Scott Garrett, a former Republican congressman from New Jersey, to be president of the bank for a four-year term lasting until January 2021. He also nominated Spencer T. Bachus III, a former Republican congressman from Alabama, to fill another vacancy on the board until January 2019.
Garrett, who served six terms in the House of Representatives before losing reelection in 2016, was known as a critic of the bank while in Congress, dubbing its practices “crony capitalism.” “The proposal before us is the resurrection of a bank that embodies the corruption of the free enterprise system,” he said in a speech on the House floor in October 2015, opposing a bill to reauthorize the bank after its authorization lapsed that July.
Bachus, by contrast, was a supporter of Ex-Im during his 11 terms in the House, including two years as chairman of the House Financial Services Committee, where he shepherded the passage of an earlier reauthorization bill in 2012. He retired from the House after the 2014 elections.
While the Ex-Im Bank was reauthorized in late 2015, a lack of a quorum on the board prevents the bank from approving deals valued at more than $10 million. Currently three of the board’s five seats are vacant. It’s not known when, or if, the president plans to nominate an individual to fill the third vacancy.
The nominations reflect a change in positions by the president regarding the Ex-Im Bank. During the campaign, Trump suggested the bank was no longer necessary. In February, President Trump made no mention of bank during a speech at a Boeing aircraft factory in South Carolina, despite suggestions he would discuss the bank’s future there. A day later, the New York Times reported that the bank was one of nine agencies being considered for closure by the White House Office of Management and Budget.
However, in an interview with the Wall Street Journal April 12, Trump said he now supported the bank and would seek to fill vacancies on the board. He noted that the bank helped small businesses as well as large ones, and that companies in other countries are aided by similar export credit agencies.
The Aerospace Industries Association, which has supported Ex-Im for its role in financing both aircraft and space deals, welcomed the nominations. It said in an April 15 statement that, because of the lapsed authorization and the lack of a quorum needed for larger deals, financing for satellite and launch deals dropped from nearly $1 billion in 2014 to $4 million in 2015.
“Ex-Im Bank support is critical for U.S. exporters in the aerospace and defense industry – both large companies and their small and medium suppliers,” the organization said in its statement. “With a level playing field, we can compete and win based on the quality of our products and services rather than financing.”
Commercial satellite manufacturers also reiterated their support for the bank in recent weeks. “It’s still critically needed,” Mark Spiwak, president of Boeing Satellite Systems International, said of Ex-Im at the Satellite 2017 conference in March. “We’ve lost several competitions and haven’t been a part of competitions because of the inability of customers to get Ex-Im. Customers that we have signed up recently have said we’ve found a way, but we still need Ex-Im.”
The nominations announced April 14 require Senate confirmation. The vacancies on the current board exist in part because the Senate failed to take up nominations made by the Obama administration in its last two years in office.