The Export-Import Bank recently announced its 2015 advisory committee members and — wait for it — a lot of them represent firms that have extensive dealings with the bank.
In a press release last week, Ex-Im said that the 17-member committee, which “advises Ex-Im Bank on its policies and programs,” would feature 11 new members and six returning members representing business, labor and government interests.
Several of those members are either currently affiliated with companies that have received Ex-Im financing, or have had extensive dealings with such companies in the past, and for some opponents, this revelation constitutes additional evidence that the bank engages in “crony capitalism.”
Defenders, on the other hand, say such accusations are baseless, and stem from a misunderstanding of the advisory committee’s true purpose. (RELATED: Export-Import Bank Accused of Conflicts of Interest)
The Ex-Im Advisory Committee was created by Congress in 1983 to “advise the bank on its programs… and submit… its own comments to the Congress on the extent to which the bank is meeting its mandate to provide competitive financing to expand United States exports.”
The law also states that, “members shall be broadly representative of environment, production, commerce, finance, agriculture, labor, services, state government, and the textile industry,” suggesting that the association of advisory committee members with Ex-Im beneficiaries is a feature, rather than a failing, of the organization.
According to Ex-Im President and Chairman Fred Hochberg, “Their experience and diverse perspectives will be vital as we are always working to improve the ways in which we do business in order to better support middle class U.S. job growth through exports.”
Critics counter that the absence of illegality does not necessarily mean the absence of impropriety. If anything, they contend, it shows that corporate welfare is institutionalized within Ex-Im. (RELATED: Conservatives Split on Export-Import Bank)
For instance, former Washington Gov. Christine Gregoire, who will return as chairwoman of the Committee, has a history of supporting the interests of Boeing, which has been the foremost beneficiary of Ex-Im financing in recent years.
In 2013, The News-Tribune reports that during her final year in office, Gregoire intervened to block stricter water pollution rules that were supported by Indian tribes and the state’s Department of Ecology, but attracted opposition from the aerospace industry. Interestingly, her decision came just one day after meeting with Jim Albaugh, Boeing’s executive vice president.
Previously, Gregoire had signed a letter urging President Barack Obama to side with Boeing over a European competitor in awarding a $35 billion aerial tanker contract. (RELATED: Some Beneficiaries of Export-Import Bank Oppose Re-Authorization)
Other Committee members also appear likely to support Boeing, including Owen Herrnstadt, who directs the main union that engages in bargaining with Boeing and represents millions of its workers, and Caroline Freund, a senior fellow at the Peterson Institute for International Economics.
In 2012, Freund co-authored a study for the World Bank arguing that, “The emphasis on small and medium enterprises [is] misguided,” and suggesting that export assistance should instead focus on the top 1 percent of exporters, or “export superstars.”
“Large firms define exports,” Freund wrote, pointing out that, “the top 5 percent of firms accounts for almost 80 percent of exports on average and the top 10 percent accounts for almost 90 percent.”
Then again, Freund and other pro-Boeing Committee members may face pushback from their colleagues, several of whom represent small- and medium-sized companies that have benefitted from Ex-Im financing in the past.
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