Energy tech exporters wait for break in Ex-Im Bank logjam

By George Cahlink | 01/13/2016 07:22 AM EST

The White House is aiming to break a political logjam over the Export-Import Bank of the United States that threatens to delay billions of dollars in loans and other financial guarantees for overseas nuclear plants and other energy production projects, but a senior senator will likely keep standing in the way.

On Monday, the administration announced the nomination of Mark McWatters to a four-year term on the bank’s board, which must approve any deal over $10 million. The five-member board currently lacks a quorum and cannot consider those larger deals until a third member joins. McWatters would be the third member.

But Senate Banking, Housing and Urban Affairs Chairman Richard Shelby (R-Ala.) said Monday that he is not in any rush to hold a confirmation hearing and advance the McWatters nomination to the Senate floor.


"I wouldn’t say anything is broken. We have to investigate all these [nominees], and it will take a while," said Shelby, who opposed the four-year authorization of the bank that Congress cleared late last year over deep conservative resistance.

The bank only reopened after House Democrats and Republicans joined forces to do an end run around GOP leaders and eventually have the bank reauthorization ride on a bipartisan highway bill.

Shelby’s opposition is the latest hurdle to the bank’s resuming full operations after being unable to approve any new project financing for five months last year after Congress let its charter lapse.

House Minority Whip Steny Hoyer (D-Md.) yesterday criticized what he considers a "hold" on the nomination by Shelby, saying the senator is ignoring the more than 300 House members and two-thirds of the Senate who support the bank.

Bank Chairman and President Fred Hochberg last month said it would take at least until mid-January for it to have loans and other financing applications ready for board members to approve. Hochberg said about 75 percent of all the bank’s estimated $20 billion in annual loans have a value of more than $10 million.

Carol Berrigan, senior director of supplier policy and programs at the Nuclear Energy Institute, said nuclear energy projects often require hundreds of millions and even billions of dollars in financing from the bank. But, she added, those deals also require months of review by bank staff — a process that can now go forward under the reauthorization — until they move on to the board.

"We are hopeful that the quorum at the bank will be restored by the time such deals need approval and encourage the administration and Congress to move the process forward," Berrigan said.

The Ex-Im Bank has approved 78 transactions and projects valued at $14.8 billion for the petroleum sector since 2001, while it has backed more than $5 billion in power generation projects and services over the same time frame.

Primary politics

Ohio Sen. Sherrod Brown, top Democrat on the Senate Banking panel, who spearheaded reauthorization efforts, said he does not understand why Shelby won’t act on McWatters immediately.

"Why would he not confirm him now? [McWatters is] a Republican, he was recommended by [Senate Majority Leader Mitch] McConnell and is supported by the banking chairman in the House," said Brown, who repeatedly has made the case that the bank creates tens of thousands of U.S. jobs at firms that export goods and services abroad.

Indeed, the administration’s picking McWatters — who serves on the board of the National Credit Union Administration and has worked for House Financial Services Chairman Jeb Hensarling (R-Texas), another Ex-Im Bank opponent — is meant to encourage a quick confirmation.

Moreover, Patricia Loui, a Democrat nominated for a second term on the board this spring, withdrew her noncontroversial renomination this week to help pave the way for McWatters.

Shelby has suggested he may not move any nominees under his jurisdiction until the administration first nominates an overdue pick for a Federal Reserve Bank post. He also hinted at another reason for his tactics this week, saying he might not have much time to review the nominee before his March primary.

Shelby, who is running for a seventh term this fall and is in line to lead the Appropriations Committee, faces three lesser-known conservatives in the primary. With nearly $20 million raised, Shelby is well-positioned for re-election, but limiting the Ex-Im Bank’s reach would help him solidify support with conservatives.

Shelby has parried conservatives in opposing the renewal of the Ex-Im Bank, repeatedly describing it as an example of corporate welfare and saying its leaders are not willing to make needed changes. He has deflected questions about whether blocking the nominee is a backdoor attempt to keep the bank from issuing its largest loans.

One business lobbyist, who worked with trade groups to get the Ex-Im Bank reauthorization passed, predicted Shelby would eventually relent and move the nomination after March 1 — the date of the GOP primary in Alabama.