Trump Pick for ‘Bank of Boeing’ Faces Rare Corporate Backlash

  • In Congress, nominee Scott Garrett opposed Export-Import Bank
  • White House may bring in New Jersey Republican for a meeting

Scott Garrett.

Photographer: Albin Lohr-Jones/Bloomberg

It’s not looking good for Scott Garrett, the former GOP congressman tapped by President Donald Trump to run the controversial Export-Import Bank.

Lobbyist groups for the country’s biggest companies, such as Boeing Co. and General Electric Co., are working to torpedo Garrett’s nomination, a rarity for a Republican nominee, and GOP lawmakers are withholding support or floating alternatives. Their main complaint: during his seven terms in Congress, Garrett called for the Ex-Im Bank to shut down.

“You don’t put people in charge of something they want to destroy,” said Jay Timmons, president of the National Manufacturers Association.

White House advisers have discussed bringing Garrett in to meet with Trump, according to people familiar with the matter. It’s not clear what they would discuss, the people said. 

The nomination of Garrett, a founding member of the Tea Party-aligned Freedom Caucus, has become another example of the divisions that are paralyzing the GOP on Capitol Hill. Titans of industry and the Republicans who enjoy their financial support say the bank creates U.S. jobs by funding overseas deals. Small-government champions, such as Garrett, argue that it’s a symbol of corporate welfare, lending money to companies that don’t need taxpayer help. As chairman, Garrett would have the power to indirectly approve or block deals.

Garrett did not immediately respond to a request for comment.

Friday Before Easter

Created during the Great Depression, the Ex-Im Bank helps foreign companies buy U.S. products when private banks won’t provide financing. Some of the agency’s biggest beneficiaries include manufacturing and aerospace companies such as Boeing and General Electric as well as big banks, like JPMorgan Chase & Co., that help finance deals. In 2014, its last fully operational year, the bank backed $27.5 billion in exports and sent $674 million in profits to the U.S. Treasury.

Garrett’s nomination has been curious from the start. The administration announced the choice on the Friday before Easter, when most of Capitol Hill was deserted. Spencer Bachus, a Republican from Alabama and the former chairman of the House Financial Services Committee, was nominated to fill one of three additional vacancies on the board.

In another unexpected move, the Trump administration in June announced that Anthony Scaramucci, a hedge fund manager well known in Wall Street circles, would serve as the bank’s chief strategist. Scaramucci’s role doesn’t require Senate confirmation and comes after he was considered for bigger positions.

‘Eminently Qualified’

“Scott Garrett is eminently qualified to lead the Ex-Im Bank,” White House spokeswoman Natalie Strom said in an email. “The President stands behind his nomination and is looking forward to his confirmation.”

No one was more surprised at his nomination than Garrett, according to people familiar with his thinking. After losing his northern New Jersey seat to a Democratic newcomer in November, Garrett had been considered for different jobs in the new administration. In meetings with Trump’s advisers, including at least one at Trump Tower in New York, discussion included possible posts at the Securities and Exchange Commission and the Federal Housing Finance Agency, the regulator of mortgage-finance giants Fannie Mae and Freddie Mac, according to the person. The Ex-Im Bank was never at the top of the list.

“It’s disappointing,” said Senator Heidi Heitkamp, a North Dakota Democrat and a bank supporter. By nominating Garrett, “the White House has injected controversy, and that’s very regrettable.”

It doesn’t help that Garrett’s relationship with some companies is already frosty. He allegedly made anti-gay remarks when he was in Congress that prompted some corporate donors to pull their support during the 2016 campaign.

Contradictory Views

Trump’s views on the bank have been contradictory. As part of his populist pitch to voters on the campaign trail, he reviled it as “featherbedding.” Since assuming office, however, he’s pledged to keep the bank open.

Senate Banking Committee Chairman Mike Crapo said he doesn’t want to schedule Garrett’s confirmation until the administration names a Democratic board member. Senate Minority Leader Chuck Schumer sent the Democrats’ recommendations to the White House in March, according to a person familiar with the matter.

In the meantime, groups including the U.S. Chamber of Commerce and the National Manufacturers Association are touting Bachus for the top job instead.

South Carolina Republican Senator Lindsey Graham has said he wants Trump to pick someone else. Other lawmakers appear reluctant to commit to Garrett.

“I’m going to reserve my decision until I’ve had a chance to sit down with him,” said Tim Scott, a Republican from South Carolina, where Boeing and General Electric have operations. “I hope that he’s a reform-minded person as opposed to someone who is just looking to dissolve the Ex-Im bank.”

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