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 Working together, they mobilized executives from more than 650
companies to descend on Washington in a two-day "fly-in". In over
400 meetings they warned lawmakers that thousands of American jobs
would be lost if Congress failed to reauthorize the agency, which
helps foreign firms buy U.S. exports.
The goal was to refute conservative critics who charge that EXIM
provides "corporate welfare" to elite multinationals.
Eight months later, that objective still has not been met. EXIM's
charter expired on June 30, stunning the Washington business
establishment. The bank has stopped providing new financial
assistance to U.S. companies and efforts by moderate Republicans and
Democrats to revive it face uncertain prospects.
A dogged and well-organized campaign against EXIM by conservative
groups allied with billionaire industrialists Charles and David Koch
has starkly highlighted new limits on the power of traditional
corporate lobbying.
Exploiting a lack of knowledge about the obscure trade finance
agency, the right-wing groups succeeded in elevating EXIM to the
national stage and turning thousands of conservative voters against
it.
 In doing so, they rode a rising tide of resentment at
business-as-usual in Washington, the same force that is driving
House Speaker John Boehner from office and propelling outsider
Republican presidential candidates Donald Trump and Ben Carson.
The EXIM story holds lessons for the Washington power center known
as K Street, where many advocacy firms are based. If the trend
continues, Congress will become less receptive to the work they do
for companies or industries seeking specific changes to legislation.
"These are members (of Congress) who are being guided by deeply held
beliefs," said Paul Sracic, professor of political science at
Youngstown State University in Ohio. "It's only going to be worse
for K Street."
TARGETED CAMPAIGN
Just two days after the EXIM fly-in, Republican candidates for
president stood before wealthy conservative donors at The Breakers
luxury resort in Palm Beach, Florida and said the 81-year-old trade
bank should be closed for good.
The declarations by Jeb Bush, Marco Rubio, Ted Cruz, Rand Paul, and
then candidate Scott Walker at the Club for Growth winter meeting
were part of a game-changing strategy that targeted key conservative
leaders, flipping them one-by-one.
"We intentionally asked them about this, to test where they stood on
crony capitalism," said Doug Sachtleben, spokesman for the
conservative club, which wants EXIM closed.
The group followed up with television ads in many home districts of
past Republican EXIM supporters, telling voters to urge them to
change their minds about the bank, describing it as "a petri dish of
corruption and graft."
Koch Industries, with businesses ranging from oil refining to carpet
fibers, is 84 percent owned by the Koch brothers, who together are
fifth on Forbes magazine's Richest People in America list. Koch
companies have accessed about $2.4 million in loan guarantees in the
past two years, including the Georgia-Pacific paper unit and energy
and petrochemical equipment subsidiaries, according to EXIM's
website.
"We oppose all forms of corporate welfare – including all forms of
subsidies, such as cash payments, loan guarantees, anti-competitive
regulations, restrictions on trade, mandates, import tariffs, and
tax breaks – even if they currently benefit us," said Ken Spain, a
spokesman for Koch Industries.
Americans for Prosperity, a group founded and still supported by the
Koch brothers, unleashed its volunteer network and phone banks on
the EXIM issue, patching over 33,000 voter calls through to
lawmakers' offices since March.
Among those who turned against the bank were Representative Bill
Flores of Texas, who is now running for House Speaker, and former
Texas governor Rick Perry, less than a year after he urged renewal
of its charter to aid Texas exporters.
With Boehner's top two deputies also opposed to EXIM, Republican
House Financial Services Committee Chairman Jeb Hensarling seized an
opening to block renewal legislation.
A staunch EXIM opponent, Hensarling said he is "gratified, if not
amazed" that EXIM is still closed in the face of a massive corporate
lobbying effort to save it. He attributed part of this to the steady
replacement of older Republican moderates in the House with younger,
more conservative members who believe in free enterprise, but not
necessarily big business.
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"A huge percentage of our conference has been here for two terms or
less. They're not wedded to the old way of doing things," Hensarling
told Reuters.
EVER HEAR OF EXIM?
The conservative groups spent time telling voters about the bank's
operations, touting high-profile loan fraud investigations at the
institution. They said U.S. taxpayers would be "on the hook" for
billions of dollars in loans made to China and Russia. And they
played up the bank's heavy support for aircraft maker Boeing, whose
overseas customers got more than $8 billion of the $20.5 billion in
new EXIM loan authorizations in fiscal 2014. Excluded from that
message was that the bank routinely earns a taxpayer surplus, $675
million last year, has a low default rate and aids thousands of
small firms.
"If you misrepresent what it is, then it's easy. It's tough to
compete against that," said one business lobbyist seeking an EXIM
revival, speaking on condition of anonymity.
Another long-time Washington lobbyist said Boeing overestimated
Boehner's ability to overrule the conservatives and put EXIM to a
vote. Boehner, a longtime EXIM supporter, announced his resignation
last month after struggling with repeated right-wing rebellions, but
with no clear successor he may stay on longer.
General Electric (GE) Vice Chairman John Rice acknowledged that
conservative groups wield outsized power over Congress. The company
has begun to move some manufacturing jobs out of the United States
so it can access other countries' export financing support.
"Let's face it, you've got a system in the United States now where a
significant majority of the members of Congress can support
something and it won't move forward because of the perspective of a
few and the money behind that perspective. And I think that's a big
problem," he told Reuters.
 The House will finally get a chance to test the level of EXIM
support on Oct. 26 due to a rare procedural maneuver to overrule
Hensarling and Republican leaders. But the effort faces challenges
in the Senate, where Majority Leader Mitch McConnell opposes EXIM
and wants the issue laid to rest.
EXIM might get some help in House-Senate negotiations over a
transportation funding bill. But some of the negotiators may be EXIM
opponents, such as House Ways and Means Committee Chairman Paul
Ryan, who is under pressure to replace Boehner as speaker.
One powerful tool wielded by the conservative groups is a threat to
support more conservative challengers in primary elections next year
against sitting Republican lawmakers.
The Koch brothers-backed Americans for Prosperity (AFP) is already
poring over the list of the 42 Republicans who signed the House
"discharge petition" to force the Oct. 26 House vote.
"We're talking about our options to hold them accountable," said AFP
spokesman Levi Russell.
The U.S. Chamber of Commerce, a business lobbying group that
supports EXIM, has begun to fight back on the same terms used by the
anti-EXIM side, funding pragmatic, pro-business candidates. It spent
some $35 million in the 2014 election cycle with some success in
defeating Tea Party candidates. It has started its 2016 effort six
months earlier.
"The Chamber works to elect pro-business candidates who have the
courage to govern when they get to Washington," said Chamber
spokeswoman Blair Latoff Holmes.
First-term Republican Representative Bradley Byrne, who benefited
from $185,000 in Chamber funding in his 2013 special election in
Alabama, said the pro-EXIM campaign would have been stronger if
smaller companies had been more prominent.
"The campaign has not been very effective. I think the results speak
for themselves," he said.
(Additional reporting by Andrea Shalal and Patrick Rucker. Editing
by Kevin Drawbaugh and Stuart Grudgings)
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