Bloomberg News

Boeing Taps D.C. Lobbyist in Export-Import Bank Renewal Push

March 20, 2012

Boeing Co. (BA) tapped two of Washington’s highest-paid lobbying firms to help overcome opposition from carriers such as Delta Air Lines Inc. (DAL) and Tea Party lawmakers in its push to reauthorize and expand the Export-Import Bank (EIBZ).

Boeing, the biggest U.S. plane manufacturer, retained Akin Gump Strauss Hauer & Feld (1117L) and the Podesta Group, according to Senate disclosure filings. They were the second- and third- highest-earning lobbying firms in Washington last year, according to nonpartisan Center for Responsive Politics.

The campaign to renew the bank, whose charter expires May 31, has united the Obama administration with opponents on other issues such as the U.S. Chamber of Commerce and Republican Senators Lindsey Graham and Richard Shelby, who say it plays an important role in boosting exports. They’re opposed by U.S. airlines that say they’re hurt when the government helps foreign rivals buy planes, and by the Club for Growth and Heritage Foundation, which say the bank meddles in private enterprise.

“We see eye-to-eye with those groups on a lot of issues, but there are times when we don’t,” Christopher Wenk, senior director for international policy at the Washington-based Chamber, the largest U.S. business lobbying group, said in an interview. “There is strong bipartisan support on the Hill for the Export-Import Bank, including Republicans and conservative Republicans. The urgency is the here and now to get this done.”

Democratic Bill Fails

Democratic efforts to reauthorize the bank stalled today in the Senate, as lawmakers failed to advance a proposal by Democratic Senators Tim Johnson of South Dakota and Maria Cantwell of Washington. Graham and Shelby, who joined Democrats to co-sponsor the measure, voted in opposition at the urging of Senate Minority Leader Mitch McConnell, a Kentucky Republican.

The senators proposed amending a bill rolling back Securities and Exchange Commission rules. Their measure would reauthorize the bank for four years and increase its lending limit by 40 percent to $140 billion, from $100 billion that it’s projected to reach as soon as this month. The lender provides loans, loan guarantees and insurance to foreign companies to buy U.S.-made products.

“Not reauthorizing the bank places American companies at a serious disadvantage against their foreign competitors,” bank President Fred Hochberg said. “We are already hearing that some customers of U.S. exporters are considering switching their purchases to foreign companies due to the uncertain availability of future Ex-Im Bank financing.” 

‘Stay Competitive’

Renewing the bank “will help thousands of American businesses and achieve everyone’s goal here of ensuring American businesses can stay competitive,” Amy Brundage, a spokeswoman for the Obama administration, said in a March 14 e-mail.

Senator Jim DeMint, a South Carolina Republican and founder of the Senate Tea Party caucus, has said the lender gives foreign airlines an edge over American carriers in buying new aircraft.

“Government subsidies promote neither U.S. exports nor effective economic development,” DeMint said yesterday in a posting on his blog. “When the government shifts labor and capital from the economy through taxation and then gives it to specific private companies in the form of export or foreign direct investment subsidies, it does so at the expense of the economy as a whole.”

Paxon, Podesta

Akin Gump earned $37.9 million lobbying last year, behind only the combined Patton Boggs LLP (1211L) and Breaux Lott Leadership Group, which grossed $48.3 million, according to the Center for Responsive Politics. Akin Gump’s Boeing team includes Bill Paxon, a former Republican congressman from New York. The Podesta Group was third with $27.1 million, according to the center. Podesta’s Boeing team included Chairman Tony Podesta, a top Democratic fundraiser.

Boeing’s ties to the Obama administration include Commerce Secretary John Bryson and former White House Chief of Staff Bill Daley, who have both served as Boeing directors.

Delta and Airlines for America, the Washington-based trade association for the largest U.S. airlines, have both tapped Elmendorf Ryan, one of whose principals is Jimmy Ryan, a former adviser to Senate Majority Leader Harry Reid, to lobby, according to Senate records. Delta is pushing for greater transparency in the bank’s decisions and a stricter analysis of impact in its decisions, which DeMint said is also a priority for him.

‘Treated Fairly’

“In reauthorizing it, we would like to see some of those reforms,” Trebor Banstetter, a spokesman for Delta, said in an interview. “Our main concern is that our employees be treated fairly in this process.”

Banstetter declined to discuss Delta’s lobbying relationships, citing company policy. Tim Neale, a Boeing spokesman, also wouldn’t comment on Boeing’s lobbying.

“This isn’t an issue for a handful of companies, this is from across the business community,” Neale said. “It’s a very important competitive issue for all of us.”

The Club for Growth has urged Congress not to reauthorize the bank, calling its actions “market-distorting subsidies that pick winners and losers in the private sector.”

‘Shut It Down’

“Market forces should dictate trade flows, not bureaucrats and politicians,” Andrew Roth, vice president for government affairs at the Washington-based Club for Growth, said in a March 14 e-mail. “Not only should members of Congress reject this expansion of authority, but they should reject the bank’s charter and shut it down for good.”

House Majority Leader Eric Cantor, a Virginia Republican, wants the bank to be reauthorized on its own, without being an amendment to the SEC bill, and is working on preparing that legislation for a vote by the end of the month, Laena Fallon, a spokeswoman, said in a March 14 e-mail.

The Export-Import Bank in November was sued by the Air Transport Association of America Inc., now called Airlines for America, which sought to halt the bank’s deal for $3.4 billion in loan guarantees for aircraft financing to Air India.

The trade association filed the lawsuit in federal court in Washington, saying the bank didn’t seek public comments or consider the impact on the U.S. airline industry before approving $1.3 billion in loan guarantees and $2.1 billion in preliminary commitments to support the sale of 30 Boeing planes to Air India.

Financing Aircraft

U.S. District Judge James Boasberg in January rejected a request by the association to temporarily block the guarantees from proceeding while their legal challenge is being considered.

According to the lawsuit, the bank’s loan portfolio is “overwhelmingly devoted” to financing the purchase of airplanes for export. In fiscal year 2010, air transportation loans accounted for 47 percent of the bank’s $75.2 billion in total outstanding loans, according to the lawsuit.

“As is the case with any subsidy, taxpayer-backed loans result in market distortion and crony capitalism,” Heritage Action for America, a nonprofit lobbying affiliate of the Heritage Foundation, which says it promotes conservative political policies, said in a March 12 website posting.

The amendment is No. 1836. The business capital bill is H.R. 3606.

To contact the reporters on this story: Eric Martin in Washington at emartin21@bloomberg.net; Bennett Roth in Washington at broth14@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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