When Congress punted its decision on renewing the charter of the Export-Import (Ex-Im) Bank of the United States until next June, it would have made sense for the Bank’s supporters in government and Big Business to breathe a sigh of relief. It might have been wise for them to make a strategic retreat from the issue, taking advantage of the temporary lull to strategize about how best to defend their favorite trough of crony capitalism when the debate heats up again next year.
This idea must not have occurred to Timothy Keating, Senior Vice President at Boeing. The Hill reported that Keating, speaking in the Boeing factory town of Everett, Washington, recently railed against Congress for having the audacity to even question the worth of the Ex-Im Bank, which happens to cost American taxpayers some $200 million per year under fair-value accounting rules. Keating dismissed the Bank’s critics as “mostly far-right political consultants, think tanks and congressmen” acting in a “fit of ideological road rage,” to appease those he later characterized as “their most rabid supporters.”
Such vitriol is not entirely unexpected, however, considering it comes from a senior executive at one of the Ex-Im Bank’s own “most rabid supporters.” Boeing has argued vociferously for the renewal of the Bank’s charter, though it seems fair to ask exactly who is supporting whom. In Washington, D.C., Ex-Im is known as “Boeing’s Bank,” and that’s only partly sarcasm. Boeing received around $8 billion in taxpayer-backed Ex-Im financing last year – the most of any single corporation by far – mostly to fund sales of their aircraft to foreign airlines, many of which are state-owned and/or subsidized. In fact, in September Reuters reported that one airline, Emirates acknowledged that they didn’t need the Ex-Im Bank, “Emirates, Dubai's flagship airline, would not have trouble buying planes from Boeing Co (BA.N) even if the U.S. Congress fails to renew the U.S. Export-Import Bank's charter later this month, a senior company executive said on Friday.”
Receiving such favor from Ex-Im puts Boeing on a fairly exclusive list. Among their other top beneficiaries are such mega-corporations as Caterpillar and General Electric. In fact, 60 percent of the Bank’s total funding goes to just ten companies, none of whom appear likely to immediately rush to bankruptcy court were they to suddenly lose access to Ex-Im’s largesse.
That is what makes Timothy Keating’s impassioned – some might even say frenzied – comments especially curious. In his zeal to frame the debate over Ex-Im as a purely partisan issue, he appears to have gone into battle with only a half-full quiver of information. Specifically, he should have consulted his own company’s finance experts. Kostya Zolotusky, a managing director at Boeing Capitol Corporation, told The Wall Street Journal back in 2013 that even without Ex-Im, “he was confident the company could find alternative funding sources” for their international deals.
Outside analysis would appear to bear up Zolotusky’s conclusion as well. During the recent Ex-Im debate, Standard & Poor’s reported that Boeing’s credit would not be harmed by the Bank’s expiration, nor would their ability to meet their 2014 and 2015 aircraft delivery schedule.
Boeing’s Mr. Keating, perhaps buoyed by the hometown crowd in Everett, has summarily attacked any concerned American who dares to criticize the Export-Import Bank. He has specifically castigated any of the peoples’ elected representatives in Congress – which range from the House Majority Leader to one of the House’s most outspoken liberals – who do the same. And all for the sake of a few billion dollars in government handouts which, according to both internal and external analyses, Boeing does not even need.
If Boeing really wants to save their favorite fund for corporate welfare, they might need to rethink their public relations playbook. At the very least, it may be time to put Senior Vice President Keating on the bench.