The Ex-Im Bank battle is personal for these small business owners

Rep. Jeb Hensarling and Sen. Patty Murray, supercommittee co-chairmen. (AP )
Rep. Jeb Hensarling (R-Tex.) has been one of the most vocal critics of the Export Import Bank. (AP )

The concrete admixtures manufacturer Fritz-Pak Corp. — which has between 15 and 20 employees, depending on the season — doesn't often find itself in the spotlight. 

But in recent weeks, the Mesquite, Texas-based company has been flooded with calls and letters from Boeing Co., General Electric Co., the U.S. Chamber of Commerce, and Rep. Maxine Waters (D-Calif.), all wanting the same thing: a positive story about the company's experience with the U.S. Export-Import Bank.  

These solicitations are part of an aggressive campaign launched by the bank's supporters scrambling to save it from extinction.

(How a once-obscure agency is dividing the GOP over ‘corporate welfare’)

The bank, an 80-year-old federal export credit agency which aims to aid U.S. businesses by providing financing to foreign buyers of American goods and services, has the support of most Democrats, some Republicans and many large corporations. 

But some conservative groups have mounted a growing campaign to shut down the bank by allowing its charter to expire in September, saying the agency engages in cronyism and doles out corporate welfare to multibillion dollar companies at home and abroad.

In the midst of this debate, Ex-Im-backed small businesses, particularly in the congressional district represented by one of the agency's most prominent opponents, have found themselves caught in the middle of a political crossfire.

"We've got a target on our back from both sides," Fritz-Pak vice president David Ojeda said. "People want to use us as an example for how things are being done right and how things are being done wrong."

That target is particularly large in Texas, home to more than 1,300 companies that have benefited from Im-Ex Bank export financing since 2007, by far the most in the nation. It's even larger in the Texas 5th congressional district, home to House Financial Services Committee chairman Rep. Jeb Hensarling (R-Texas), who has been a vocal critic of the bank. Since 2007, the bank has authorized $45 million in financing for deals involving businesses in Hensarling's district, including Ojeda's company.

Fritz-Pak has received the Ex-Im Bank's backing in more than $800,000 of export sales since 2007. Fearing that the bank's closure would hurt its competitiveness in foreign markets, Ojeda's company followed in the footsteps of the large corporations, appealing to Hensarling's office and providing a letter to the bank's defenders expressing support for its reauthorization.

But other small businesses in Hensarling's district are singing a different tune. "Hensarling has also heard from many small business owners in his district who tell him they do not want the Export-Import Bank reauthorized because it puts them at an unfair competitive disadvantage with those few companies that receive the Bank's help," according to a committee spokesperson. 

In a House Financial Services Committee hearing Wednesday, Hensarling read aloud from a letter written by one of his constituents, Hal Richards of Terrell, Texas. "As a small business owner who exports, I think it's outrageous that my own government puts my business and other small businesses at a competitive disadvantage through the Export-Import Bank. How is that fair?" Richards wrote, according to Hensarling.

Richards, managing owner of the heater manufacturer Catalytic Heater Co., said in a phone interview Friday that his 18-employee company exports abroad but has not attempted to conduct any deals involving the Ex-Im Bank. "I think [the Ex-Im Bank is] something that's outlived its usefulness, and it's something that could be done in the private sector," Richards said.

In fiscal year 2013, nearly 90 percent of Ex-Im Bank's deals involved small businesses. But 80 percent of the financing the bank allocated went to large companies like Boeing.

In fiscal year 2013, Boeing benefited from $8.3 billion in backing from the bank — about 30 percent of the bank's total financial assistance provided that year, according to a report by the Mercatus Center at George Mason University. GE, another top beneficiary, was aided by $2.6 billion in backing that same fiscal year, about 10 percent of the bank's total financial assistance, according to the same report.




With much to lose if the bank's charter is not reauthorized, both Boeing and GE have actively solicited stories from Ex-Im-backed small business owners, company spokespeople said.

GE officials called companies across the country on behalf of a pro-bank project run in partnership with the Coalition for Employment through Exports, a nonprofit advocacy group for exporters, that sought to collect testimonials from Ex-Im-backed exporters, according to a GE spokesperson, who declined to be named. The U.S. Chamber of Commerce has also mounted a campaign to drum up support for the bank's reauthorization, said spokeswoman Sally-Shannon Birkel.

The Democratic staff of the House Financial Services Committee, led by Waters, has been another particularly active defender of the bank. Since 2007, the bank has authorized more than $266 million in financing in deals involving businesses in Waters's home district, nearly six times the total financing that has aided Hensarling's district.

According to a committee staffer, Waters has sent out 1,500 letters to small businesses across the country and plans to mail out 1,000 more in the next few weeks. 

On Tuesday, her staff posted dozens of letters online from U.S. companies and business community members, explicitly highlighting letters from businesses in Texas and California, the two states with the largest number of Ex-Im Bank-backed exporters. 

California is also home to the new House Majority Leader Kevin McCarthy (R-Calif.), who said last weekend that he supports shuttering the bank. Since 2007, the bank has authorized $60 million in financial assistance in deals involving exporters in McCarthy's home district.

Fritz-Pak is not the only small business in Hensarling's district lobbying to save the bank. The Dallas-based frequency converter manufacturer Unitron Lp., which has about 100 employees, has benefited from the bank's backing in $1.2 million of export sales since 2007. The company plans to contact Hensarling's office to express support for the bank's reauthorization, said Robert Saxon, the company's controller.

"Our stance on it is that if it is not renewed, we would have to find another method to insure those receivables that may be more expensive," Saxon said. "We might not be able to make those sales."

But not everyone in the Texas 5th district is taking sides. The Garland-based computer peripheral manufacturer Itac Systems Inc. has benefited from at least hundreds of thousands of dollars of bank-backing during the past seven years, but does not intend to intervene in the debate over the bank's future.

"We're such a small fish, I don't think we would be hurt [by the bank's closure]," company president Joanne Ross said.

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