Leadership for EXIM - Just the Facts

Nearly a year after Inauguration Day, the Biden Administration has not placed any confirmed political appointees to the board of the Export-Import Bank (“EXIM”). Such has been EXIM’s melodrama - a distinct departure from the longer history of the New Deal agency created to serve bipartisan economic interests. Sadly, it’s very much in line with EXIM’s reality that for nearly a decade has been beset by the alternative facts of anti-EXIM rhetoric and - more broadly - the abject political fiction now on display in Washington. What EXIM, its leadership, and all of us need are the facts.

EXIM’s current challenge comes from Sen. Marco Rubio (R-FL), who has fabricated the most unlikely of controversies to place a hold on Chair nominee Reta Jo Lewis of Georgia because of her status as a Strategic Advisor to the U.S.-China Heartland Association, a distinctly moderate trade group with a focus on – as the name suggests – the U.S. Heartland. As part of the ongoing “macho-ization of Mr. Rubio” the senator has been on an anti-China kick that led to a unsupported and (as it turned out after a 75-18 Senate approval) lonely crusade against Nicholas Burns as Ambassador to China and to opposition of Chair-nominee Lewis. A disregard for facts is not surprising from a senator who once tweeted a photo of Rep. Elijah Cummings in tribute of Rep. John Lewis. This time, Sen. Rubio’s loose relationship with the truth is slowing down the placement of a someone with over two decades of relevant international experience who would be the first African-American woman to serve as EXIM Chair and a slate of highly qualified nominees to lead a critical agency of vital importance to U.S. exports and jobs.

Downhill Slide

It is sad to consider how far things have slid from a time just two decades ago when we thought things at EXIM and in Washington were tough.

After the 2000 election was not settled until December 2000, the Bush Administration needed until March 2001 to appoint John Robson Chair. Chairman Harmon stayed on until June 2001 when Robson was confirmed, but tragically, Robson passed away in March 2002. EXIM maintained leadership under Acting Chair Eduardo Aguirre, who had overcome confirmation delays that seemed long at the time to become Vice Chair in December 2001 so he could steer EXIM through reauthorization. Philip Merrill became Chair in December 2002, but didn’t stay on as Chair in Bush’s second term. After a nomination of then Vice-Chair April Foley that didn’t happen, Merrill’s senior advisor and Executive Vice President James Lambright became Acting Chair in 2005 and Chair in July 2006. EXIM was again reauthorized in December 2006.

So, through a contested election, the death of one Chair, two interim Chairs and a prolonged process to replace one Chair with his former advisor, EXIM Bank maintained political leadership and was re-authorized twice.

That period seems placid compared to EXIM’s recent history highlighted by a lapse in authorization in 2015 and a lack of a Board quorum that prevented EXIM from authorizing deals over $10 million from July 2015, through the last 18 months of the Obama Administration and the first 27 months of the Trump Administration, until May 2019. That’s 45 months without full Board authority, just three fewer than a full Presidential term.

Current Problems

EXIM hasn’t had a confirmed Chair since January 2021 due to many factors, most recently because of Sen. Rubio. Fortunately, EXIM’s 2019 authorization mitigates problems that arose when EXIM lacked a full board by allowing the bank to maintain authority through ex officio members. With James Cruse as Acting Chair in February and James Burrows as of July, EXIM has maintained full authority. The glass is half full.

That said and notwithstanding the experience and commitment of the current Board, the lack of political leadership undermines EXIM’s credibility and may hamstring Administration efforts to implement export goals, including those related to promoting sustainable energy solutions to reduce greenhouse gas emissions. Under the Administration’s International Climate Finance Plan, EXIM is targeted “to identify steps through which the United States can promote ending international financing of carbon intensive fossil fuel-based energy while . . . advancing sustainable development and a green recovery”. The plan reflects the administration's desire to double, by 2024, US annual public climate finance to developing countries. EXIM is also particularly critical to U.S. interests because of the ongoing implementation of the China and Transformational Exports Program (CTEP) approved in late 2020.

EXIM is not alone in experiencing a slowdown in filling key positions. Similar to the Trump Administration, Biden has consistently lagged the number of confirmed appointments of prior administrations. According to the Brookings Institute (see chart), compared to Bush and Obama respectively, Biden has filled just 40% and 50% of positions.

EXIM is not even the most high-profile appointee that Senator Rubio has targeted on his “China kick”. In November, Sen. Rubio placed a hold on the appointment of Nicholas Burns as China Ambassador because his career is “defined by the failure to understand the threat posed by the Chinese Communist Party” Sen. Rubio either ignored or didn’t understand Burns’ writings and his October Senate testimony that China posed “the greatest threat to the security of our country and the democratic world". Most Senators didn’t follow Sen. Rubio. Even Sen. Cruz (R-TX) wouldn’t block his confirmation. After a deal between Sen. Cruz and Majority Leader Schumer (D-NY), to unblock a slate of appointments, Ambassador Burns was confirmed by a 75-18 vote.

No One There

Sen. Rubio again seems very much on his own. Chair-nominee Lewis was reported out of committee with the support of most members with only Republicans Sen. Toomey of Pennsylvania, Hagerty of Tennessee and Lummis of Wyoming recording nay votes” on the 24-member committee.

Sen. Rubio’s opposition to Lewis lacks support demonstrates a pattern Sen. Rubio’s dramatically put on display in a 2016 Presidential bid that went down in flames after Gov. Chris Christie (D-NJ) pointed how Sen. Rubio’s robotic repetition of the same catch phrases demonstrated a lack of substance – moving one columnist to write “there appears to be no one there”.

Sen. Rubio has asserted that Lewis is “a strategic advisor for the U.S.-China Heartland Association, which is a conduit for the Chinese Communist Party’s (CCP) United Front Work Department (UFWD), which aims to influence key Americans at the subnational level and ultimately undermine America’s national interests.” Indeed, there is a United Front that seeks to co-opt and neutralize sources of potential opposition to the policies and authority of the Chinese Communist Party (CCP) and Reta Jo Lewis is a Strategic Advisor to U.S.-China Heartland Association (“USHCA”), and both groups exist and do relate to China in some way.

But the facts end there.

There no connection between the groups and no substance to any concerns. USHCA is a bipartisan organization committed to building stronger ties between USHCA Region (20 U.S. states located between the Great Lakes and the Gulf) and the People’s Republic of China. USHCA’s central theme highlighted on is website is to “invest in the U.S. to compete with China”. The Strategic Advisors at USHCA are overwhelmingly moderates from Middle America, including moderate Democrats Gov. Ronnie Musgrove and Mississippi, Gov. Brad Henry of Oklahoma and Republicans Gov. Matt Blunt of Missouri and Gov. Ed Schafer of North Dakota, a former Secretary of Agriculture under President George W. Bush.

Time to Fix Things

As with Ambassador Burns, the hold on Chair-Nominee Lewis will end as will the logjam on the full EXIM Board, but it can’t be soon enough. These needless delays must end. Reform is needed to end the slow pace of confirmations to lower the number of confirmed positions and reduce the frequency and impact of holds so a few Senators can’t hold up with work of critical agencies like EXIM.

There is too much at stake. In addition to Lewis, Judith Pryor, a former EXIM Bank and Development Finance Corporation Board member with experience at the Development Finance Cor awaits confirmation as Vice-Chair and Owen Herrnstadt, Chief of Staff for the International Association of Machinists (IAM), awaits confirmation as Director. All three have significant experience. Having them wait for confirmation is too much to ask and risks losing them. Still awaiting action are the areas of focus identified by Lewis in her Senate testimony – “transformational export areas, renewable energy, energy efficiency, and energy storage exports, strategic competition with China, and increasing support for historically under-served businesses”. China isn’t fiddling around and it’s time for the U.S. Senate to stop.